In December of 2020, Jordan Schaenzle (our Chicago Managing Partner) had the opportunity to sit down and talk with Rob Galbraith, the Most Interesting Man in Insurance. Rob is the author of the insurance industry bestseller “The End Of Insurance As We Know It” and has worked in the insurance space for over twenty years.
Over the next few weeks, we will share some of his insights, which we hope can help other insurance firms adapt to this changing landscape.
One interesting topic of discussion was, “When innovating, should insurance carriers bulk up their internal tech team or partner with a software development firm?” Below is a full summary of Rob’s advice.
Innovation has long been a focus within the insurance space. Nowadays, competitive pressures are forcing large, legacy carriers to rethink how they innovate. They are tackling this challenge in several ways:
- creating a specialized internal technology team
- setting up a venture capitalist arm of their organization focused on investing in insurtech startups
- partnering with a large custom software firm for ongoing projects
While these tactics can bring forth a host of innovations, each usually has a large price tag. So how do traditional, small-to-medium-sized carriers innovate?
The Internal Team – Hope vs. Reality
With internal tech teams, the hope is that they’ll understand the needs of the company and have experience within the insurance industry that a technology partner might not. Having an internal team also means that you have a group of people fully dedicated to maintaining your insurance products.
The reality might look a little different. Firms often use their internal resources to maintain the status quo and keep their legacy systems running. An internal tech team might have innovation as one of their many objectives in a given year. And, depending on the size of the team, they might be responsible for maintaining and innovating across the entire organization from underwriting to claims to loss prevention.
When the scope of innovation is large and the capacity of the team is small, it becomes challenging for internal developers to maintain key relationships with department stakeholders. These relationships are pivotal to understanding pain points within the organization and how software could potentially alleviate them.
“Hiring” an internal development team can also be a challenge when legacy systems are involved. Oftentimes, if a carrier has an internal tech team, they are likely dedicated to maintaining the legacy systems that keep the company running. Finding a developer that has the drive to innovate but is willing to dedicate their time towards maintaining those systems can be challenging.
What does this mean for your insurance firm?
Follow this blog or our social media to be alerted about our next post, which will detail the pros and cons of partnering with a software development company.
Check out more from our interview with Rob Galbraith in the coming weeks to learn more about the future of the insurance industry and get hands-on tips for your firm.
If you’d like to learn more about how Atomic can help you reach your goals, chat with one of our managing partners.