The evolution of insurtech, with Caribou Honig (podcast)


The evolution of insurtech, with Caribou Honig


The primary wave of insurtech start-ups are at some extent of proving that their merchandise really work—and demonstrating good economics for themselves and their stakeholders.
Not all insurtechs will survive—in accordance with Caribou, “most of them will die out.”

Traits to look at embrace the connection between expertise, price curves and the drivers of transformation; APIs; embedded insurance coverage; and channel partnerships as a method to introduce new classes and merchandise.

Season two of the Accenture Insurance coverage Influencers podcast

Welcome again to season two of the podcast. This season, we’ll be taking a deep dive into insurtech. Each two weeks, we publish an interview with an insurtech founder, VC or thought chief with the intention of studying: How are these trade vanguards harnessing change and utilizing it to create a extra dynamic future for themselves?

Final week we kicked off the season with a have a look at Trov. Founder and serial entrepreneur Scott Walchek shared what he’s realized in regards to the insurtech world; why Trov has pivoted from its on-demand direct-to-consumer software; and why the corporate is now specializing in autonomous automobiles and financial institution partnerships.

The evolution of insurtech, with Caribou Honig

Insurtech gamers will likely be aware of Caribou Honig because the fedora-wearing chairman and co-founder of InsureTech Join (ITC), in addition to the chairman of HR Remodel. Not too long ago, he spoke to us about all issues insurtech, from rising tendencies to a philosophical have a look at the social implications of insurtech. Actually, we had a lot to speak about that we’ll be publishing a number of episodes with Caribou all through the season.

On this first episode, he seems on the present state of insurtech—and offers us a teaser for what to anticipate at ITC2019, happening September 23–25 in Las Vegas.

The next transcript has been edited for size and readability.

Welcome again to season two of the podcast. I’m Eagranie Yuh, and in the present day I’m talking with Caribou Honig, the co-founder and chairman of InsureTech Join, and chairman of HR Remodel. I’m actually wanting ahead to our dialog. We could get began?

I’d be delighted.

You spent ten years at Capital One, a company recognized for its data-driven focus; and from there you co-founded QED Buyers, a enterprise capital agency targeted on data-driven firms. Provided that background, what are you seeing within the insurance coverage trade proper now?

I feel there’s a bunch of attention-grabbing tendencies. Some, I get extra obsessive about than others.

Parametric insurance coverage, the place the payouts are triggered by some goal third-party knowledge feed, for some kind of incident. I like that rather a lot. It’s nonetheless ramping up and it might be my nice white whale that by no means actually takes off to its fullest the best way I feel it ought to.
APIs. I’ve actually been obsessed these days with APIs and the API-ification of the insurance coverage stack. I feel that’s obtained huge implications for insurance coverage, whether or not insurtech or incumbents.
Price curves. I’ve not too long ago began occupied with your entire technology-driven change in insurance coverage as a query of price curves. And I concern that begins to get actually, actually nerdy, much more than my standard nerdy degree. However I’m simply beginning to consider effectively, every part on the market, from a expertise perspective from the data age, whether or not it’s processing energy, whether or not it’s extra utilized issues like cloud storage, or the price of a given quantity of performance of a smartphone. Getting a satellite tv for pc picture, the price of that’s taking place; the price of sequencing the genome is falling dramatically. Loads of price of labor can begin to get changed by software program or machine intelligence. A perspective of wanting on the expertise tendencies impacting insurance coverage as a set of price curves is perhaps an attention-grabbing language to have a look at.

And I perceive you’ve collected a library of APIs.

So I’ve obtained a facet mission referred to as It looks as if there needs to be a catalog of all of the APIs associated to insurance coverage collected in a single location, in order that in case you are creating an API and also you need to let the world learn about it, you simply let the world learn about it by way of Or should you’re attempting to construct one thing and also you need to discover what APIs exist already, you possibly can simply faucet into, so that you don’t must rebuild it, you simply go to at least one place,, and you discover it.

And unusually it didn’t appear to exist, however appeared like it could be helpful. And so I’m in a course of with a few of us I do know to attempt to create it. So proper now we’re in a tough beta, and over the course of the following couple months, I’m hoping that it’s going to turn into actually fairly useful and begin to be helpful for individuals.

At InsureTech Join, you’ve opened up your previous keynotes by among the huge trade tendencies. Final yr [2018], you talked a few Cambrian explosion in insurtechs. Are you able to speak somewhat bit about that?

Yeah, I’m at all times blissful to. Now, I’ll begin for folk who aren’t aspiring biologists. It’s a reminder that the Cambrian explosion was like 500, 550 million years in the past. And it’s actually the place complicated organisms began to emerge and kind of went from heaps and much and many single-celled animals to, “Oh look, there’s a fancy trilobite swilling throughout. Isn’t that attention-grabbing.” However actually, many alternative types of life have been tried out at that second and that gave rise to a complete lot of attention-grabbing profitable types of life thereafter.

I feel the Cambrian explosion we’re seeing in insurtech began about three or 4 years in the past, not 500 million years in the past. However actually, I see this explosion of attention-grabbing new concepts and new sorts of firms and enterprise fashions and merchandise and knowledge all rising seemingly out of the nice primordial soup of insurance coverage.

That’s actually attention-grabbing as a result of it’s actually onerous, even should you’re a VC, to foretell which one, or which physique sort, of start-up goes to succeed. However it’s somewhat simpler to have the ability to make the declare that a few of them are going to succeed and that’s what it appears like. I’ll not know whether or not it’s going to be mammals or Tyrannosaurus Rex that emerges out of the Cambrian explosion, however it positive appears like one thing on a few legs might be going to have a fairly good consequence.

Proper. And as we’re recording this, Lemonade not too long ago introduced a bid for IPO with an estimated $2 billion valuation. I don’t essentially need to get into the specifics of that, however fairly to speak about completely different routes for these insurtechs, so IPOs, M&A, MGAs that tackle extra of the dangers themselves. What are these doable for these little or medium-sized firms? What are the choices?

You recognize, I’ll begin by saying, “…and most of them will die out,” which is a vital backdrop.

A part of it may be the enterprise capital math that’s in my head, proper? Success for this Cambrian explosion doesn’t imply 9 out of ten of those start-ups must succeed. It means two or three out of ten must do fairly effectively, no less than make their traders some cash. Possibly one in ten do actually, rather well, give their traders a 10x or 30x consequence. And which means, by the best way, that more cash will then come into the sector and be recycled and it’ll proceed to have its proliferation of latest firms, new start-ups popping out of it.

However that also suggests a 3rd will fail, and a 3rd will sort of capitulate and simply turn into bolted on to another firm that has a working enterprise mannequin, and that’s nice.

I feel that of those which are going to be eventual winners… Look there’s two varieties, there’s a elementary break up.

There’s the B2B firms, those which are attempting to promote into insurance coverage incumbents. They’re enterprise-facing start-ups, they’re attempting to assist the incumbents turn into higher, quicker, extra environment friendly, extra customer-friendly, no matter.
After which there’s the customer-facing start-ups. Consider Lemonade, as a well-described customer-facing start-up. They’re not attempting to promote into Allianz; if something, it’s the opposite manner round.

The shopper-facing ones like a Lemonade or Metromile, they’re attempting to get the insurance coverage incumbents into their provide chain, whereas the B2B ones try to turn into a part of the availability chain of the present insurance coverage giants. Each are reputable methods to go to market after all, however they’ve completely different execs and cons.

When it comes to exits, IPOs are fantastic. They’re, initially, they’re a financing occasion. They don’t seem to be the vacation spot. And that’s why nice entrepreneurs don’t get wrapped up round, “hey, my objective is to IPO.” In case your objective is to IPO, that makes for a a lot much less attention-grabbing firm. In case your objective is to construct an ideal firm and which will find yourself turning into a part of another firm, or it might find yourself being standalone, might keep non-public for a few years––these are all nice.

I feel the hot button is how are these firms constructing essentially good economics for themselves and for his or her stakeholders. That second half is equally vital. An awesome firm—a sustainable firm—isn’t going to simply construct nice profitability for itself, it’ll be constructing an ideal worth proposition for its prospects, whether or not enterprises or customers. And it will likely be actually nice for its personal provide chain. In case you are a customer-facing, new insurtech start-up and also you’re working with a reinsurer, a part of your job in constructing it right into a sustainable enterprise is ensuring that reinsurers get good returns too. In addition to ensuring that these prospects are getting an ideal insurance coverage product.

It’s curious as a result of at your 2017 keynote, on the finish of your touch upon Cambrian explosion, you stated, “with few exits to this point.” So what I’m listening to is that you simply do count on various exits to return, a 3rd of the trade.

I do. I’ve turn into very optimistic, really, within the final 12 months. In the event you’d requested me 12 months and a day in the past, I might’ve stated, “I feel that this insurtech factor goes to show to be beneficial. However there’s an actual state of affairs in my thoughts that I fear about the place it doesn’t.”

At this level the issues I’ve seen, I really feel like sure, there’s clearly some beneficial firms being created, in each the B2B and the customer-facing facet of issues. Possibly not at all times the buzziest firms, however I do suppose that there are fairly a couple of firms which are constructing actual, sustainable economics, and are pursuing methods that can, over time, ship scale and are thus creating actual financial worth, both as a standalone in the long run, or one thing that’s beneficial within the palms of another person.

We’re now, name it three years because the Cambrian explosion started and the primary wave of recent insurtechs began getting early-stage funding. Now could be simply in regards to the time the place you’d count on them to start out demonstrating the actually attention-grabbing economics, as a result of first you’ve obtained to get the funds, then you definitely’ve obtained to start out constructing out the product, then you definitely’ve obtained to construct out partnerships. And in insurance coverage, even with the comparatively good willingness of the insurance coverage worth chain, the insurance coverage incumbents, to really experiment and have interaction with the start-ups, lighting up a brand new product really does take fairly a very long time in insurance coverage––for a lot of good causes. It’s complicated. There’s regulatory hurdles. There’s actual threat that you might want to handle right here.

However now’s in regards to the time when the primary wave of start-ups needs to be on the level of proving that what they’ve been constructing really works. And so the following 12 to 24 months; I’ll say, if that first wave of insurtechs doesn’t begin to have some clear winners relating to fundamentals, then there’s a actual downside.

However I’m really fairly optimistic from the bits and items I’ve seen and triangulated into, that there’s no less than a superb fraction which are constructing one thing actual and attention-grabbing.


Cool. Nicely it’ll be an attention-grabbing 12 to 24 months to see how that performs out. One other one in every of your harebrained schemes that appears to have taken off, InsureTech Join, kicks off September 2019. Forgive me, I don’t have the dates in entrance of me however…

September 23rd to 25th.

There you go. In Vegas?

Sure, on the MGM.

Final yr it had greater than greater than 5000 attendees. Is that proper?

That’s proper. In our first yr we had 1500, it went 3500. Final yr was 5500. Our greatest guess is it will likely be someplace round 7500 this yr.

Wow. I imply, that’s fairly spectacular for a harebrained scheme. What do you attribute to this great pickup in assist of ITC?

I prefer to say that in the midst of an individual’s profession they’ll in all probability have three or 4 actually good concepts. And this was definitely one in every of my three or 4 finest that I feel I’ll ever have. This actually was a case of constructing one thing for a spotlight group of 1. And as humorous as that sounds, that truly is a key to why it succeeded.

I wanted to go to this factor, so I discovered a fellow who’s now turn into an ideal enterprise companion with me, Jay Weintraub, to assist carry this notion to life. And we constructed it to be the sort of convention that I might need to go to with my enterprise capital hat on, assembly different traders, and assembly the entrepreneurs, and assembly the innovation executives throughout the trade.

I feel that helped with the execution of it rather a lot. Ensuring that it actually was very business-focused, very outcome-focused, a spot the place enterprise really can get completed. Actually I feel we benefited from our timing as effectively. We couldn’t actually discover anything on the market fairly prefer it. And it definitely coincides with the Cambrian explosion.

It’s actually meant to be very inclusive of all classes of insurance coverage, all elements of the worth chain for insurance coverage as effectively. And I feel that we really did a fairly good job, if I can pat myself on the again, round additionally making it expansive on the variety and inclusion; bringing within the new expertise. We had some scholarships, so to talk, for some college students to attend. We actually made positive that this isn’t your grandfather’s Oldsmobile.

This isn’t essentially a traditional-looking convention by way of who’s there, however it’s senior by way of the individuals. And, perhaps what’s most outstanding, is individuals come to it with a mindset of exploration and innovation. And I feel context issues, as a result of I feel you possibly can have most of the identical individuals attending a unique occasion with out the identical context and so they wouldn’t be as eager to take new introductions and meet those who they haven’t met earlier than.

However I feel that we managed to set the context for the occasion in order that individuals are coming in actually fairly eager to stumble upon of us they might not already know and be open to new concepts as the inspiration of the convention for future enterprise offers, future partnerships popping out of it.

Because it will get greater, do you’re feeling prefer it sort of takes on a lifetime of its personal the place these issues will naturally occur? Or does ITC must information issues? Are you somewhat bit extra of a matchmaker because it will get greater?

Because it will get greater, it’s really more durable for us handy matchmake: “Oh Susie! Oh Bobby! You two ought to really speak. You’ve obtained one thing in widespread.” We really attempt to do this the place we are able to, however the greater it’s, the hand-picked connections simply don’t scale as effectively. We’ve got instruments that we offer, an app to let individuals matchmake and we’re really fairly considerate in regards to the frameworks we use there.

There’s really lots of, I name it social engineering, occurring as effectively in not simply the content material that’s on stage however in the entire design of the agenda. There’s lots of worth in serendipity. It’s one in every of my favourite phrases. And if we are able to engineer the situations for serendipity, the place two individuals who weren’t even in search of one another managed to take a seat down on the proper lunch desk and say, “Oh, what do you do?” “Oh, what do you do?” “Oh, effectively that’s attention-grabbing. We must always speak about that after the occasion.”

If we are able to engineer these situations for serendipity, and the context of the place individuals need to find out about what’s taking place and what the chances are, that truly will get our job completed, 90 p.c.

What can individuals count on from ITC in the event that they haven’t attended? What’s the final format? Is that this fits and ties or are we speaking denims and hoodies?

No matter makes you comfy. Now, the fits and ties, the tie half no less than is fairly uncommon. You see a couple of of them, that’s OK. And you recognize you see the denims. I like to speak about in all probability the commonest, which is what I might name “enterprise informal”: denims with a sports activities coat, for the lads no less than.

It’s meant to be exhausting, and I feel we succeed at that truly. In the event you present up on Monday and go to a few the pre-conference occasions, then we’ve obtained the kickoff, after which there’s often some dinners and issues like that. After which the principle program begins the following morning and goes until four:00 or 5:00. After which there’s dinners and drinks, and drinks and dinners, and assembly with individuals. After which extra of the identical the following day.

It’s really meant to be—not frenetic—however positively energetic and exhausting, as a result of everybody’s coming there suddenly. And should you’re going to take advantage of out of it, you need to jam the time in to satisfy with as many individuals as you possibly can and see the attention-grabbing content material you could and revel in the advantages of serendipity.

You actually do need to go in with a mindset of, “OK, I’m not going to be essentially hitting the slots in any respect. I’m not going to be ingesting an excessive amount of. That is going to be work, work, work, however I’m going to get extra completed in two and a half days than I’d have the ability to get completed in any other case in two and a half weeks.” That’s my hope anyway.

After which it’s additionally––my son is schools proper now and he’s a junior, rising senior at school––and as we’ve gone to the massive universities, all of them say that the identical line, “You can also make a giant faculty small, however you possibly can’t make a small faculty huge.” And there’s a bit of that for InsureTech Join. Our job in some ways is to assist everybody have the proper occasion for them. And that doesn’t imply it’s going to be the identical occasion. They might don’t have any overlap with another person on the occasion by way of what panels they see or what networking occasions they attend. And that’s nice, as a result of so long as you may make it related for everybody there, then that’s terrific.

I feel one of many key factors of Insuretech Join is that you simply appeal to a extremely world viewers. Why is that vital?

So it begins with, insurance coverage is a world trade and the insurtech motion is occurring globally. And so it could be a narrower dialog to make it simply in regards to the US.

There’s lots of worth, after all, in regional conferences and there are some excellent regional conferences round insurance coverage and insurtech all over the world. However there’s additionally nice worth in having no less than one convention that does have a world scope of dialog.

And so there’s learnings you could get from understanding what’s occurring in several markets, and speaking to your counterparts in several markets. The aspirations of the start-ups and the ambitions of most of the incumbents don’t know geographic bounds.

I feel among the Chinese language tech titans, as an example, which have some actual performs in insurance coverage, they’re beginning to have a look at increasing into markets like Brazil. And one of many issues I really like is that we’ll have about, my guess is 100 individuals from Brazil this yr attending. So it’s a superb cause for individuals from China, in the event that they’re focused on what’s occurring in Brazil, to attend our occasion and be taught from it. I simply suppose it’s a way more strong set of conversations individuals can have.

You usually spotlight some huge insurance coverage tendencies as a part of your keynotes. I’ve seen you’ve gotten away from the predictions somewhat bit, however I’m curious: do you have got any teasers of what to anticipate for the 2019 keynote?

Nicely, I foreshadowed somewhat bit, this occupied with expertise primarily driving change by driving the price curves down, and the way that in some instances may be so nice, that it’s transformative or opens up the door for transformative enterprise fashions. I like that concept rather a lot.

I gained’t have the ability to assist myself however to maintain speaking in regards to the API-ification of the insurtech stack. And I’m getting progressively extra enthusiastic about genomics and the implications there.

What I really feel most assured about is that this notion of embedded insurance coverage. I’m attempting to determine one of the best not-funny joke to make about it. It’s just like the shift from B2B2C to B2B2C. Besides the distinction is the center B is “dealer” within the conventional insurance coverage mannequin. And the shift to the place the center B is only a enterprise that serves as a channel companion. Possibly it’s an OEM like a Porsche or somebody like that, or a Tesla; perhaps it’s a homebuilder like Lenore; perhaps it’s a genetics supplier like 23andMe; perhaps it’s Expedia.

I just like the notion of channel partnerships as being an increasing number of commonplace, each within the conventional classes of insurance coverage, but in addition as an preliminary entry level for brand spanking new classes, new merchandise, new sorts of insurance coverage.

I’m getting concerned in a single firm that’s creating an insurance coverage product, a life and particularly unintentional incapacity insurance coverage product, for individuals collaborating in high-risk sports activities, organized sports activities like some kind of canoeing journey or a triathlon, let’s say. And it’s an attention-grabbing new product. Not a traditional insurance coverage product, somewhat bit extra on-demand-ish.

However the go-to-market technique of embedding it into these occasion organizers makes a heck of lots of sense. I might simply think about this firm struggling to determine the right way to promote it direct-to-consumer and you recognize––it’s simply not a pure match along with your traditional nook retailer brick-and-mortar dealer, however embedding it with the proper channel companions makes all of the sense on this planet. So I feel one of many themes is that this B2B2C the place the center B is a channel companion, not a traditional dealer.

Nicely, we’ll sit up for seeing the keynotes after it launches. That was my dialog with Caribou Honig, co-founder and chairman of InsureTech Join and HR Remodel. Thanks very a lot for taking the time to talk to me Caribou.

It’s been an absolute pleasure.


On this episode of the Accenture Insurance coverage Influencers podcast, we talked about:

The evolution of the insurtech increase—and the necessity for the primary wave of start-ups to start out proving themselves as sustainable, worthwhile companies.
Shifting price curves, APIs, embedded insurance coverage and channel partnerships as tendencies to look at.
What to anticipate at InsureTech Join 2019, happening September 23-25 in Las Vegas.

For extra steering on self-driving vehicles:

We’ll be persevering with our dialog with Caribou Honig in a couple of weeks. However first, we’ll converse with Ruth Foxe Blader, a managing director on the funding staff at Anthemis, the place she invests in early-stage fintech and insurtech start-ups. She’ll speak about keys to success for managing change, and why Anthemis is targeted on digitally native monetary providers.

Catch that episode in two weeks—and within the interim, you possibly can meet up with earlier episodes of the podcast.

What to do subsequent:

Contact us should you’d prefer to be a visitor on the Insurance coverage Influencers podcast.


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