4299 Altus Insurance Whitepaper FINAL SPREAD - Flipbook - Page 26
Chapter 4: Exploring the Technology
Landscape: Technology Themes and
Implementation (cont.)
“It’s the process, stupid”
On the face of it, the underwriting workbench appears
to respond to many underwriting problems but as
with all technology, it is only as good as the data it
feeds on and how well it can communicate across
the organisation. Without a carefully considered
and designed underwriting process, the workbench
solution can only deliver a fraction of its capabilities.
In fact, what is happening with the underwriting
workbench is a useful analogy to help explain the
transformation failure rate. It’s not the technology
that’s the issue, it’s the operational landscape that
the technology is being applied to. Or to paraphrase
a famous political slogan, “It’s the process, stupid”.
That insurers continue to wrestle with the
modernisation issue should, in a sense, be cause for
celebration. Not so long ago, the Insurtech community
was threatening to completely replace the incumbents
with cutting edge technology and a disruptive spirit,
but that future has failed to materialise at scale.
Take Lemonade. From its launch in 2015, it made its
intentions clear – it was going to turn the insurance
model on its head, and while it did introduce some
interesting innovations to the way policies are
structured and administered, it has never lived up to
its early hype.
It’s not the technology that’s the issue,
it’s the operational landscape that the
technology is being applied to. Or to
paraphrase a famous political slogan,
“It’s the process, stupid”.
Connections are the pathways to
modernisation
Technology and Insurtechs no longer trigger
existential dread within the insurance sector. In the
last four years they have positioned their products
and services as augmenting existing processes or
solving particular problems – particularly in claims
and underwriting – rather than being a replacement
for an entire industry.
The influence of Insurtechs may
not be the one they envisioned for
themselves, but it remains strong.
The influence of Insurtechs may not be the one they
envisioned for themselves, but it remains strong.
As they move further into their specialisms, they
will play an increasingly important role in the ability
of traditional insurers to modernise, so the choice
of partner becomes as important as the choice of
technology.
AI has become a key feature of many Insurtech
propositions in recent times, and the technology
is making signi昀椀cant inroads into many of the
core processes of insurance – from claims and
underwriting to customer service and fraud detection.
While it has grown rapidly (in force premiums were
up 22% at Q2 2024) to nearly USD $840m on the
back of streamlined application and underwriting
processes, Lemonade is still losing money year on
year. For the same period, it reported losses of USD
$57m, albeit an improvement on the USD $67m it
had lost by Q2 202312.
Lemonade appears to be one of the most innovative
and technologically advanced insurers in the world,
but nearly ten years on from its inception, it has yet
to turn a pro昀椀t. It is the perfect illustration of how it
takes more than a pure technology play to modernise
underwriting e昀昀ectively and pro昀椀tably.
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12
https://www.reinsurancene.ws/lemonade-posts-57-2m-net-loss-in-q2-results-ifp-increases-22-yoy/
