Nice writeup. Certainly scratches the surface a bit (and I think that was the intent). I've spent the bulk of my career in the industry, both in P&C and A&H, and there is a ton of opportunity. You correctly conclude that it's not because we're idiots, even though some days I'm kind of an idiot.
Again, tons of opportunity, with some barriers that aren't unique to the industry but maybe unique to what the tech community might encounter (and this is by no means an exhaustive list) -
1. Capital requirements: You need a dumptruck full of money to do much in this industry, at least if your intent is to write or reinsure business, but even to a lesser degree if you're working in ancillary services.
2. Regulatory environment: Assuming US operations, 50 states with 50 different sets of regs need to be okay with what you're doing. In addition, federal law comes into play in certain spaces (GLB, HIPAA, etc).
3. Distribution: The current model compensates every layer of the distribution model very well. It's not as easy as you might imagine to disrupt when entrenched interests are all making a ton of money AND are interdependent upon their neighbors in the value chain to continue to do that. You can't just hack a piece off because that bothers their neighbor, who in other circumstances might otherwise be a competitor, but has a shared interest. The relationships get complex.
None of this is fatal, but you must navigate it and play by many of the rules, particularly with #2. As Zenefits learned very publicly, the insurance industry and its regulators weren't going to let someone do what Uber did to the taxi industry - which was essentially to operate in the grey/black and just ignore the calls to stop. Insurance is a subset of financial services, and financial services is a powerful industry. For any startup, my advice is to build compliance and regulatory relations in from day 1. It's the least exciting thing you'll ever do, but is extremely important. Anyhow, I'm rambling. By no means do I want to discourage anyone from trying, I'm just trying to highlight some of the big things that are "different" in our space.
I'm particularly interested in the data piece because that's what I've done and built a career on in this industry, but it never struck me as sexy enough for YC. Appreciate the article.
Again, tons of opportunity, with some barriers that aren't unique to the industry but maybe unique to what the tech community might encounter (and this is by no means an exhaustive list) -
1. Capital requirements: You need a dumptruck full of money to do much in this industry, at least if your intent is to write or reinsure business, but even to a lesser degree if you're working in ancillary services.
2. Regulatory environment: Assuming US operations, 50 states with 50 different sets of regs need to be okay with what you're doing. In addition, federal law comes into play in certain spaces (GLB, HIPAA, etc).
3. Distribution: The current model compensates every layer of the distribution model very well. It's not as easy as you might imagine to disrupt when entrenched interests are all making a ton of money AND are interdependent upon their neighbors in the value chain to continue to do that. You can't just hack a piece off because that bothers their neighbor, who in other circumstances might otherwise be a competitor, but has a shared interest. The relationships get complex.
None of this is fatal, but you must navigate it and play by many of the rules, particularly with #2. As Zenefits learned very publicly, the insurance industry and its regulators weren't going to let someone do what Uber did to the taxi industry - which was essentially to operate in the grey/black and just ignore the calls to stop. Insurance is a subset of financial services, and financial services is a powerful industry. For any startup, my advice is to build compliance and regulatory relations in from day 1. It's the least exciting thing you'll ever do, but is extremely important. Anyhow, I'm rambling. By no means do I want to discourage anyone from trying, I'm just trying to highlight some of the big things that are "different" in our space.
I'm particularly interested in the data piece because that's what I've done and built a career on in this industry, but it never struck me as sexy enough for YC. Appreciate the article.