Insurance has long been considered a somewhat old-fashioned industry that has been historically reticent to embrace and adopt new technologies. However, as new insurtech solutions have entered the marketplace, gained traction and revolutionized the way insurance companies do business, it’s become increasingly essential for insurers – even old school ones – to get more aggressive with investing in and exploring new technologies.
Today, aggressive and innovative insurtech solutions can be a competitive advantage for an insurance company by helping them better price claims. They can be a differentiator in the marketplace by enabling them to offer a better customer experience. And they can even make them more proactive – enabling them to identify and mitigate problems before filing a claim is even necessary.
With insurtech playing such a pivotal role in the industry, some companies are even spinning up their own tech incubators to help identify new and innovative solutions early, and help to bring them to market. One of the insurance companies getting into the insurtech incubator space is Lloyd’s of London, which recently began its search for insurtech talent for its Lloyd’s Lab program.
To learn more about Lloyd’s Lab, the role of innovative technologies in insurance and why now is the perfect time for an extremely respected insurer with more than 300 years of history to invest in emerging insurtech solutions, we sat down with Trevor Maynard, Lloyd’s Head of Innovation. Here is what he had to say:
Insurance Tech Insider (ITI): What is Lloyd’s Lab? What will it enable startups to do? What will it give aspiring insurtech companies? Why should startup companies want to participate?
Trevor Maynard: The Lloyd’s Lab will enable new concepts, ideas and products to be tested over 10 weeks in a fast-track, fast-fail environment for entrepreneurs and insurtech startups with the support and active involvement of Lloyd’s market participants and external mentors.
Successful applicants will be given an opportunity to work closely with Lloyd’s market experts to shape innovative and impactful solutions, with access to a state of the art working space at Lloyd’s landmark offices in London, potential funding and the chance to develop products, platforms and processes that will help transform Lloyd’s into an increasingly technology-driven market.
The value to startups in participating in the Lloyd’s Lab, largely centers on the unrivaled access to the expertise, insights and guidance of the specialists in the Lloyd’s markets. This level of access is unprecedented in Lloyd’s 330 year history, and it’s exciting to see what collaboration between the market and creative talent entering the Lab will yield in terms of the technological solutions that can bring about a step change in the market’s digital future.
ITI: Why is now the right time for Lloyd’s Lab? What trends are we seeing in the insurance industry that are driving the need for advanced, innovative insurtech solutions today?
Trevor Maynard: Why now? If you look at the pace of innovation and change around us, it’s clear that those who aren’t thinking about innovation and new ways of doing things will be left behind. We’ve been in business over 300 years, and we look forward to 300 more, so there’s no question that now is the time to be having conversations about how we disrupt ourselves.
Following the creation of the Innovation team at Lloyd’s, the Lloyd’s Lab represents a significant next step in driving a cohesive yet nimble approach to idea generation and implementation for the benefit of the Lloyd’s market. The Lloyd’s Lab will focus predominantly on designing technology-driven solutions to meet the unique and rapidly changing needs of the Lloyd’s market and our customers.
There are a host of advanced technological solutions involving data analytics and artificial intelligence that enable a better understanding and predictability of risk. By creating the Lloyd’s Lab, designed to bring in creative talent from around the world, we can ensure the market continues to innovate as the world moves into an increasingly digital, data-driven future.
ITI: According to a press release that the company issued about Lloyd’s Lab, you’re looking for companies with innovative solutions in the areas of customer experience, relationship building, data-driven underwriting and smart insurance product creation. Why are these the areas that were selected as the initial themes and focus areas? How do you anticipate new insurtech solutions improving these particular areas of the insurance business?
Trevor Maynard: Our intent is to capture any innovations that could make a powerful difference to the way we do business and our bottom line. We’re looking for solutions that can create true commercial value for the Lloyd’s market, and it’s with input from the market in collaboration with The Boston Consulting Group that these themes were identified.
In addition to the themes, we also have a wildcard category – which is a start-up’s chance to show us something we didn’t even know we needed. We don’t know what we don’t know, and we do want to stay open to out-of-the-box ideas.
It’s difficult to anticipate precisely how the solutions created in the lab will improve various areas of our business, but we’re encouraged by the wealth of creative global talent and excited to see what the first cohort produces.
ITI: How do you envision insurtech solutions changing the insurance industry and insurance customer journey and customer experience in the coming decade? How will it shape and evolve how policy holders view and interact with their insurance companies? How will it transform the relationship between them?
Trevor Maynard: Given the pace of change today, it’s difficult to predict what the day-to-day for insurers and policyholders will look like in ten years. Not only are the perils impacting our customers evolving, but the way we distribute insurance, the methods of pricing, the means of claiming, there are so many facets of our business that will undoubtedly become increasingly digital.
So how will that evolve policyholders’ interactions with insurers? The relationship will go stronger with technology because not only will insurers be able to provide better products and services, but policyholders will be able to deliver the precise data needed to create bespoke solutions that effectively meet their needs.
ITI: Why create Lloyd’s Lab? Is it due to a lack of funding opportunities for insurtech companies in the traditional Venture Capital and Private Equity markets, or are there other reasons why the company wants to invest in these solutions?
Trevor Maynard: Why create a lab is a valid question. Put simply, we see tremendous value in collaboration. Our aim with the lab is to find partners who want to help solve the challenges the Lloyd’s market and our customers are facing. We specified themes that matter to us, opened up the opportunity to those interested in developing solutions, and created a space that will set those selected up for success in a space that encourages collaboration and partnership with the Lloyd’s market.
The potential when bringing together the expertise and trust in Lloyd’s with the creative and nimble thinking in startups and early and growth stage companies is massive. In order to tap into that massive potential, we’ve created the Lloyd’s Lab.
ITI: Can Lloyd’s business as a leading insurance marketplace help position participating startups for future success?
Trevor Maynard: Thinking about the commercial angle, we’re helping position the startups we engage for success because we’re potentially their future customers! Not in all cases – but in many we will consider investing in or licensing the products or solutions put forward.
More broadly, we feel confident that working together, Lloyd’s and the startups joining forces in the Lloyd’s Lab, will be well-positioned to create solutions that will have a positive impact on the Lloyd’s market and potentially the broader insurance industry.
ITI: What is the timeline for the Lloyd’s Lab program? When are applications due? How long does the program run?
Trevor Maynard: Interested entrepreneurs and startups can apply here until July 22. Applications will be reviewed from this date, and we’ll let applicants know if they have been shortlisted within three weeks.
On September 3, shortlisted applicants will present their idea to Lloyd’s senior leadership and market representatives for the chance to win a place in the Lab’s first cohort. Following the pitch day, the fast-track, fast-fail program will start on October 8, with 10 weeks of intensive collaboration between startups, market experts and external mentors.
The culmination of the Lloyd’s Lab will be a demo day on December 12 where Lab participants will show us what their startup has achieved and present a proposal for future engagement with the Lloyd’s market.