Hartford Business Journal

www.HartfordBusiness.com • November 27, 2017 • Hartford Business Journal 15 Technology forces insurance regulators to innovate, too As insurance companies increasingly look to new technologies to change the way they price risk, interact with customers and develop new products, the industry is also grabbing the attention of regulators. During the sixth annual Insurance Market Summit in downtown Hartford earlier this month, Insurance Commis- sioner Katharine Wade addressed a room packed full of insurance executives, acknowledging that while InsurTech is changing the game for the industry and consumers, it's also "definitely changing the game for regulators," as well. "Regulators fully recognize the desire for new technologies to drive innovation in insurance products and improve the marketplace, but those products have to be fairly and accurately priced and they have to be suitable for consumers' needs," Wade told the crowd at the Connecticut Convention Center, adding that there must be proper coverage and privacy safeguards put in place. "Technology is revolutionizing the industry through the use of big data, pre- dictive analytics, on-demand insurance, mobile platforms, autonomous vehicles, and drones just to name a few," she said. "It's become a real balancing act for regu- lators. We don't want to stifle innovation but we're often dealing with technology startups that are new … and often not as familiar with the insurance sector and how a regulated industry operates." Wade said her department is in regu- lar dialogue with insurers looking at new technology offerings. She also said the National Association of Insurance Com- missioners (NAIC) has formed an innova- tion and technology taskforce looking for ways to better review more complex underwriting and rating models. NAIC also wants "a dialogue between regula- tors and innovators," she said. "We're ready and willing to have prod- ucts tested (in Connecticut), to provide a regulatory sandbox … subject to the ap- propriate consumer safeguards," she said. — Matt Pilon At-Bay, whose technology allows it to price insurance coverages based on up-to-the- minute risk assessments, rather than rely- ing on historical actuarial data. Other recent InsurTech developments among local insurers, according to the PwC report, include: • The Hartford's adoption of a new risk management information system, TREO, that uses data and analytics to help its largest property and casualty commer- cial customers and risk managers better identify cost drivers. • Aetna launched an initiative with Apple to make the Apple Watch available to Aetna employees and, eventually, large employers to help workers and custom- ers better track their health and, hope- fully, reduce their need for medical care. • Cigna has a new program, One Guide, that combines predictive analytics, a mobile app and personal guides to en- courage customers to make healthier lifestyle choices. Doubling down Interestingly, Hartford's efforts to tap into the InsurTech ecosystem has spawned two separate promotional efforts. VanderLinden's work in the Hartford InsurTech Hub accelerator was preceded by grassroots efforts by Stacey Brown, who founded a separate organization, InsurTech Hartford, to create InsurTech events, edu- cational seminars and "meet-ups" in the city. He launched a website in February and held his first event in April. Several hundred people have attended at least one event since then and InsurTech Hartford has thousands of followers, some overlapping, between its website, meetup and LinkedIn groups, and Twitter followers, he said. He views his organization as a platform to advance the insurance industry through new innovations and talent cultivation. Brown has taken it upon himself to be InsurTech's day-in-day-out rep- resentative in Hart- ford, working to build connections, culture, events and momentum year- round, complement- ing VanderLinden's planned profes- sional accelerator programs each year. The two are not competitors, but col- laborators, they say. "At least in conversation, we're all support- ive of each other, we're collaborating, we're talking, we're trying to figure out how to make Hartford the InsurTech capital of the world — and I think there's a ton of room in the space for more people to come in, and get involved and get engaged," said Brown. whose day job is digital transformation manager at insurer XL Catlin downtown. Among those who have attended one of Brown's events is Mike Kalen, the former president of U.S. individual life operations at The Harford and former CEO of its Harf- ord Life Europe operations. Kalen is now principal of The Sequoia Group in West Hartford, which advises private equity firms, InsurTech startups and insurance companies on how to accelerate the pace of innovation in the industry. Kalen, who is currently advising six InsurTech startups — three in Connecticut and three outside the state — said the new accelerator and InsurTech Hartford are fueling critical mass in the industry. "All of a sudden, there's a step change in the amount of attention that this community will start to get, it'll bring in investors, it'll bring in innovators, it'll bring in jobs and it'll ultimately bring in companies that are going to take root here and accelerate the pace of change in the insurance indus - try," Kalen said. Shared goals Brown said In- surTech is booming globally because technology is begin- ning to disrupt the insurance industry the way it has other in- dustries, spawning significant startup activ- ity in places like Europe and San Francisco. It made no sense to him to see area insurers flying else- where to meet with InsurTech startups, viewing Hartford as ideal for such ven- tures, especially as the state struggles to retain and grow business. It's also about de- veloping InsurTech talent, not only to grow new compa- nies, but feed talent to insurers as they adapt to industry changes and give them incentive to be in Hartford, Brown said. New York-based founder and CEO of Upward Hartford, Shana Schlossberg, said Brown and VanderLinden each has a differ- ent role in promoting InsurTech locally. VanderLinden will come to Hartford for a few months each year, but Brown unites companies and talent year-round, orga- nizing events at Upward Hartford, said Schlossberg, who's also working to promote InsurTech among sectors she wants to in- cubate at Upward Hartford. The InsurTech Accelerator is taking 70 seats in Upward Hartford for five months next year. Schlossberg said she, Brown and Vander- Linden are like-minded, working toward a similar objective and willing to help the other to build an InsurTech ecosystem for the greater good. Three people are great, but "we need a hundred of them," Schlossberg said. Connecticut Insurance Commissioner Katharine Wade. PHOTO | HBJ FILE Insurers feel pressure to innovate In a recent survey conducted by PwC, insurance executives were asked: "What are the most relevant technologies for your business that you plan to invest in within the next 12 months?" Here's how they responded: Source: Insurance CEOs participating in PWC's Global FixTech Survey 2017. 84% 58% 34% 33% 33% 22% 12% 11% 8% Data analytics Mobile Robotics process automation (RPA) Artificial intelligence (AI) Cyber- security Distributed ledger technologies (e.g., "bloackchain") Biometrics and identity management Internet of Things (IoT) Public cloud infrastructure Sabine VanderLinden, CEO of InsurTech business for London-based Startupbootcamp, will be running the new insurance-technology accelerator in downtown Hartford. She's shown in the photos above talking to startup companies including (right photo) some in Hartford. Sabine VanderLinden, CEO of InsurTech business for Startupbootcamp. PHOTO | CONTRIBUTED PHOTO | CONTRIBUTED PHOTO | CONTRIBUTED

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