Carmen Cotei is a Professor of Finance and Chair of the Economics, Finance, and Insurance Department at the University of Hartford’s Barney School of Business. She teaches Mergers and Acquisitions, Financial Markets and Institutions as well as Corporate Finance courses.
Ken Goldstein is a former global Cyber Security Product Manager at legacy Chubb Group of Insurance Companies. He is currently a Clinical Instructor at the University of Hartford’s Barney School of Business and teaches innovative InsurTech and Cybersecurity curriculum. Professor Goldstein and Dr. Cotei would like to thank Dawn LeBlanc, Managing Director of Hartford InsurTech Hub, and Leland Holcomb, former Head of Scouting and Investor Relations at Hartford InsurTech Hub, for their helpful insights and support in connection with this article.
This is Part 1 of 3. Part 2 will be available on the blog tomorrow.
“There’s no shortage of technology providers eager to partner with insurance businesses.”
An international healthcare leader collaborates with an innovative technology startup to expand its suite of mental wellness services during the Covid-19 pandemic. An AI platform that is used to assess company data is selected by a provider of white-labeled insurance agencies for customer insights. A company offering an insurance and analytics platform for mobility, the on-demand economy, and commercial auto insurance selects the insurance capital of the world to call home. What do these companies have in common? They were all part of a pipeline of startup talent accelerated for success locally in Hartford, CT!
This article will provide an overview of the role of accelerators in the performance of InsurTech startups. It commences with a primer about the definition, purposes, and importance of InsurTech, including high-level applications within the context of insurance company operations. It then transitions into the topic of accelerator programs as a potential avenue for startup success. Along these lines, the article examines why Connecticut, especially Hartford, is an ideal location for accelerator programs. As a part of the discussion, a legacy accelerator is analyzed in detail, including its background and overall selection methodology. Lastly, the article concludes with an analysis of sample data from the legacy accelerator program along with startup success stories during its three-years in existence.
The pace for InsurTech growth is thriving. Notwithstanding the Covid-19 pandemic, 2020 generated the highest amount of deal making activity as compared to any other calendar year. Furthermore, 2021 is off to an exceptionally “hot start!”
In order to maximize success at an early stage, startups often look to accelerator programs for support. This can range from education and mentoring to enhanced financing and collaborative opportunities with industry insiders.
With insurance in mind, Connecticut continues to provide an ideal location for accelerator programs, including the “the insurance capital of the world,” Hartford, CT. In fact, accelerator programs in Hartford are part of a robust ecosystem to support next-generation, early-stage companies – startups looking to breakout from the pack!
This article begins with an overview of InsurTech, including its definition, purposes, and importance within the context of insurance company operations. This foundational understanding will allow us to segue more deeply into methods for supporting startups, including via accelerator programs.
Next, the article transitions into the topic of accelerators as a potential avenue for startup success. Accelerators place startups into a better position to thrive in terms of education, collaboration, financing, and more. As a part of our discussion, we examine why Connecticut, especially Hartford, is an ideal location for startups to consider.
Thereafter, we analyze a legacy accelerator in detail, including its background and overall selection methodology for participation. This includes the “secret sauce” associated with selection, ranging from simplicity and understandability of the technology at issue to management team characteristics, areas of innovation, and more.
Lastly, the article concludes with an examination of sample cohort data from the legacy accelerator along with startup success stories during its three-year run. This shines the light on the importance of accelerator influence and local ecosystems opening up avenues for timely exploration.
InsurTech, in its simplest form, combines the terms “insurance” and “technology.” As a subset of FinTech, it includes startup companies that leverage technology to provide cost savings and efficiency associated with the insurance value chain. While there are a variety of examples reinforcing the benefits of InsurTech, some of the more important concepts include artificial intelligence, big data underwriting, and the use of internet-connected-devices.
Within the context of insurance, InsurTech applications might be better appreciated by briefly assessing key components of insurance company operations. For example, actuaries are in a prime position to benefit from “new and interesting sources of data” to solve a variety of strategic business issues. On the underwriting side, telematics is being more consistently used to evaluate customer risk and price insurance coverage. With regard to claims handling, chatbots and virtual assistants have the ability to manage less complex inquiries from customers and claimants, freeing up examiners to handle more intricate issues. From a regulatory and compliance perspective, “AI-based insurance automation solutions ensure the accuracy of data and maintain a complete log of [insurer] actions.” Finally, InsurTech startups are actively approaching reinsurers for catastrophe protection as they navigate into different areas of risk transfer.
This post will be continued on the PLUS Blog tomorrow.
 Elana Ashanti Jefferson, 11 InsurTechs to watch in 2021, PROPERTY CASUALTY 360 (January 27, 2021), 11 InsurTechs to watch in 2021 | PropertyCasualty360.
 Alex Wilhelm, InsurTech Startups are leveraging rapid growth to raise big money, TECHCRUNCH (April 20, 2021), Insurtech startups are leveraging rapid growth to raise big money | TechCrunch.
 Victor Chatenay, Global insurtech funding reached $7.12 billion across 377 deals, the most in any year to date, BUSINESS INSIDER (February 1, 2021), Global insurtech funding reached record high in 2020 (businessinsider.com).
 Marshall Hargrave, InsurTech, INVESTOPEDIA (August 20, 2019), https://www.investopedia.com/terms/i/insurtech.asp.
 NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS, INSURTECH, https://content.naic.org/cipr_topics/topic_insurtech.htm (noting that “InsurTech … is a subset of FinTech, or financial technology).
 Gilad Shai, “InsurTech and the Promise of Property Value Hedging Technology,” in The InsurTech Book: The Insurance Technology Handbook For Investors, Entrepreneurs and FinTech Visionaries, edited by Sabine L. B. VanderLinden, Shan M. Millie and Nicole Anderson (Wiley, 2018), 280.
 Ramnath Balasubramanian, Ari Libarikian, and Doug McElhaney, Patrick Szakiel, Insurance 2030 – The Impact of AI on the Future of Insurance, MCKINSEY & COMPANY (March 12, 2021), Insurance 2030–The impact of AI on the future of insurance | McKinsey (AI will support an insurance shift from “detect and repair” to “predict and prevent”); See also What Is InsurTech? Terms, Benefits, and Definition, LEARNING HUB (December 17, 2018), https://learn.g2.com/insurtech (highlighting the ability to use machine learning to process massive amounts of information to reinforce improvements in efficiency and effectiveness).
 NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS, BIG DATA, Big Data (naic.org) (noting that big data can support insurance company operations, including underwriting, rating, marketing, and claims settlement practices); Learning Hub, supra note 12 (suggesting that analytic tools, such as wearables, can mine and assess vast amounts of data for highly personalized insurance rates).
 EMBROKER, HOW THE INTERNET OF THINGS IS AFFECTING THE COMMERCIAL INSURANCE INDUSTRY, How IoT is Affecting the Insurance Industry – Embroker (suggesting that the commercial insurance industry stands to benefit greatly from IoT); Learning Hub, supra note 12 (emphasizing internet-connected technology that supports customizable insurance policies, including for micro-events).
 Ed Plowman, Action on InsurTech, THE ACTUARY (July 8, 2020), Action on insurtech | The Actuary; Anthony R. O’Donnell, Q&A: The Future of Actuaries in the InsurTech Era, INSURNACE INNOVATION REPORTER (November 15, 2019), Q&A: The Future of Actuaries in the InsurTech Era | Insurance Innovation Reporter (iireporter.com) (noting that “[a]ctuaries love data, and … see emerging opportunities to analyze [it] in ways [they] could only have dreamed of in the past.”).
 NAIC, TELEMATICS/USAGE-BASED INSURANCE, Telematics/Usage-Based Insurance (naic.org) (“Usage-based insurance … is a type of auto insurance that tracks mileage and driving behaviors); Gregory DL Morris, 4 Key Telematics Themes That Should Bridge the Gap Between Brokers, Carriers, and Insureds, RISK & INSURANCE (December 23, 2020), 4 Key Telematics Themes That Should Bridge the Gap Between Brokers, Carriers and Insureds : Risk & Insurance (riskandinsurance.com).
 Ashish Upadhyay, Transforming Claims Management Through InsurTech, MEDIUM (May 20, 2020), https://medium.com/justez/using-insurtech-to-improve-claims-management-b95a6615b3e.
 WORKFUSION, TOP USE CASES FOR AUTOMATION IN THE INSURANCE INDUSTRY, Top Use Cases for Automation in the Insurance Industry | WorkFusion.
 ARTEMIS, INSURTECH, INSURANCE TECHNOLOGY IN REINSURANCE AND INSURANCE-LINKED SECURITIES (ILS), Insurtech – Insurance technology fintech in reinsurance & ILS news – Artemis.bm.