The number one hesitation we get at Insurtech Gateway Australia when speaking with founders is their lack of insurance knowledge, which they often assume means that they won’t be able to succeed in the insurtech space. This couldn’t be farther from the truth! The insurance industry has large barriers to entry, however, the many successful insurtech founders are ones that come from a non-insurance background. These founders come to us with an idea that they believe in and the drive to solve a problem, and Gateway can provide them with the tools and resources necessary to navigate the heavily regulated and often confusing insurance industry.
Historically, insurance is an industry that hasn’t been easy for innovators to break into. The heavy regulations and a convoluted value chain, combined with an overall lack of public knowledge on how insurance works means many tech founders have steered clear of the industry. The barriers to entry were a deterrent and thus innovation moved to other industries.
The insurance industry needs innovation from the bright minds of today. The way the finance industry has been revolutionised, with positive ripple effects for all stakeholders involved, is something that the insurance industry can also benefit from. Insurtech as an industry alone is worth US$3.85Bn worldwide, showing it is a viable space to innovate and invest in. Many innovative insurtechs often didn’t start off with focusing on insurance only. For example, in the Insurtech Australia LIVE 2022 Conference, there were companies who were making Earth and its climate data accessible with the ability for insurers to better assess risk patterns, companies creating tech that lets farmers assess their environmental impacts in real time which increases agriculture insurance options for farmers in historically uninsurable areas, companies who aim to digitise the claims payment process etc. These new start-ups all aimed to solve specific customer pain points by using insurance to protect people and assets.
Many successful insurtech founders did not traditionally start with an insurance background. One local success story, Cover Genius, was originally founded by two individuals with a passion to change the travel insurance industry, however neither of the founders had an insurance background. Angus McDonald worked as a non-insurance executive in Yahoo, while Chris Bayley was a business development manager at Google (Insurance Business Australia). While neither had any specific technical insurance expertise or knowledge, they had an idea that aimed to solve a customer pain point that they were passionate about, and the ability to communicate this to investors and insurers.
Here at Gateway, >90% of our portfolio founders come from a non-insurance background. Their ability to think outside the box and work towards achieving and fulfilling customer needs is a compelling strength. For example, recently our portfolio company KOBA Insurance won the highly competitive FINNIES 2022 Excellence in Insurtech Award. KOBA’s founder, Andrew Wong, has a background in digital media and marketing, with KOBA being his first venture in the insurtech space. To complement his experience and strengthen the insurance knowledge in the team, he was able to hire-in and utilise Insurtech Gateway to access the right insurance expertise. This proves that with access to the right mentors and resources, founders can succeed under the Insurtech Gateway model without needing any preliminary insurance background.
Here are some tips from our founders to potential founders who are considering insurtech but have no idea where to start.
Tip for founders:
Solve the problem for the customer and get on top of compliance early!
Legal and commercial background but not directly in insurance.
Tip for founders:
Not being from an insurance background can be an advantage – it gives you a fresh perspective and allows you to challenge assumptions.
I worked in the legal industry – no insurance component.
Tip for founders:
You’ll be surprised how quickly you can upskill with the right network of supporters and mentors!
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If you are from a non-insurance background, and would like to launch an insurtech, we can support you with advice, connections and funding. Check out our incubator and venture fund or get in touch.