At the recent Global Insurance Symposium in Des Moines, Jeff Russell (CEO of Delta Dental of Iowa) shared a cautionary story while opening the Insurtech demo day pitch session.
Jeff recounted his company’s experience piloting technology from an Insurtech startup. Totally separate from the product itself, the partnership was not smooth sailing: despite executive and management sponsorship, the experience was challenging from the perspective of the startup.
Insurers are hesitant to change, and are plodding even when the will to do so exists.
Jeff challenged the room of industry executives: intent and expressed support are not sufficient. Established insurers must be flexible and put in the hard work to partner with early-stage companies which often lack the systems, protocols, and operating history they expect.
This message reminded me of Gain’s recent experience working with a carrier who wanted to become a pilot customer. Our contact was fantastic in so many respects: her early feedback was instrumental in our product design and development, and she was generous with her time and insightful in her advice. And now, she wanted to use our software as a pilot customer.
As part of our standard arrangement, the service was to be used free of charge, with no obligation whatsoever for purchase or payment. But, just as we were ready to move forward, we hit a snag. We got mired in IT review as the vendor risk team vetted our product and technology to ensure compliance with its policies. And, this process took a while – almost six months, in fact.
By this point, we had missed two quarterly filing opportunities. At least we figured, we were finally in position to get our software in place for the next reporting cycle.
That’s when we hit the next barrier – legal review. It turns out that even a free, no-strings-attached, software product to be used on a trial basis is subject to the same rigid process as every other contract. And, due to a bottleneck, this was going to preclude our use in time for the next filing.
Fortunately, at this juncture, help came along in the form of a senior executive who championed the pilot and expedited the agreement through this final stage. If not for this intervention, we would have been looking at a nine-month lag between a customer wanting to implement our product and actually being able to do so.
By way of context: in the world of insurance, adoption of a new technology in less than a year is likely faster than average. In the world of tech startups, however, this same timeframe is more like an eternity: too long of a sales cycle can be fatal.
So, back to Jeff Russell’s message – the stated desire to innovate has to be accompanied by a determination to operate differently when partnering with startups. This requires a different mindset, and certainly a differently level of expectations, compared to the status quo.