Insurtech: Finding New Opportunities in a Traditional Industry

Serent Capital recently hosted a fireside chat, moderated by Steve Marks, to discuss what’s working in the Insurtech industry in 2020. We sat down with Todd Sorrel and Milan Malkani, founders of ePayPolicy, a startup that’s transforming the way the independent insurance industry collects payments. Over the last few years, the digital revolution has come to the insurance industry, with technology-based solutions transforming traditional ways of doing business. We discussed the most important challenges facing Insurtech companies, with the goal of identifying the key steps that Insurtech startups can take to thrive in 2020 and beyond.

Our conversation focused on six key areas:

• The biggest challenges for companies in the Insurtech space
• Building connections and growing authority in the Insurtech space
• Lessons learned from growing a company during COVID
• Opportunities in the insurance industry
• Finding a true business partner to help you grow your company
• Advice for Insurtech entrepreneurs

The biggest challenges for Insurtech companies

•  Get to know your customers’ pain points. While bringing a fresh perspective is vital, Milan observes, everything starts with solving your customers’ most important problems. “Really get to understand the industry,” Milan advises. “Talk to your customers, understand their pain, test your assumptions, before you go suggesting the way you want them to do things. You’re not going to get people to automatically change behavior overnight just because you have this new cool whiz-bang widget. It just doesn’t work that way.
•  To learn what matters to your customers, ask them. Todd and Milan strongly advocate interviewing customers to learn more about their needs. Todd explains, “As you get to know people in the industry, it really comes down to asking open ended questions. Why do you do that this way? What, you know, how have you done it in the past? Have you looked at other alternatives or solutions? From that, you’ll pick up on their language. And if you’re able to speak their language and understand their world, you’re getting closer and closer to figuring out where you can provide a solution.”

Building connections in the insurance industry

• Influencer relationships are important. Todd highlighted how influencer marketing has grown, even in a niche like Insurtech. “We’ve met some folks that are very influential, and they have done their homework in this space and have been around a long time. Most of them have been agents that have moved into this influencer type of territory. They are friends of ours. We see them at trade shows and conferences, and we want to be where they are. Absolutely.”
• Partnerships with state associations are invaluable. “We work with over 30 state association partners,” Todd noted. “These are exclusive partnerships, where we go to a state like New York or California or Florida, which are huge for us. We get to meet their members. We get involved, we go to their shows, we help them with their ad campaigns, and we really get deep with our relationship to our partners.”
• Relationships with software vendors support product development. “We also have software system partnerships with about 10 management system partners,” Todd noted. “We really work hard to be integrated with those management systems, so that all the information and payment data from the payers themselves do write in effectively. And it just creates an awesome user experience. And that’s what it really comes down to.”

Lessons learned growing a business through COVID

• Sustaining a company culture remotely is challenging — but achievable. Milan and Todd agree on the importance that maintaining a strong culture among a distributed workforce. Todd says: “We’ve always put culture in front of strategy. This company is really connected to one another. And it also has this collaborative effect where everyone can reach into other departments and have a voice or impact. And that’s still hard.” Milan agrees: “It’s hard to manage the team, but Todd and I have learned we actually can manage a remote team, and everyone can perform.”
• Digital solutions are more in demand than ever. Demand for digital solutions like ePayPolicy’s electronic payments has skyrocketed during COVID. “We’ve also learned that our customers need us more now than ever,” Milan observes. “This is a very antiquated space. It has been running on paper checks for God knows how long. And it’s now more important than ever to get out in front of customers and let them know, hey, we’re here, there’s a solution for you, we can help you bridge this gap.”
• In the midst of a crisis, there are incredible opportunities. Milan highlighted the opportunities for growth during COVID. “This is a great time for us to go out and capture more customer base right when they need us the most and really feel like we’re servicing the industry in more ways than one today.” Todd agrees: “It’s been fast and furious to say the least around our office. I mean, every stone has been flipped over to see what can we do better? How can this process or system be either replaced or upgraded or tweaked to some degree to fit our growth?”

Opportunities in the insurance industry

•  Insurtech has lots of opportunities for digital solutions. “There’s all this simple low hanging fruit. Just nice problems to solve. And you don’t have to look that far to do it,” Milan explains. “My personal favorite solutions are the ones that just about everybody needs. I mean, we’re doing payments. Payments is kind of a simple thing, but it hasn’t been really tailored to the insurance industry. Email marketing is another example — it’s a very core thing; I think that’ll be phenomenal. I love all the basic things that people need day to day, that can really make an agency more efficient and help improve their customer experience.”
• More key takeaways:
  • 72% of insurers said they plan to increase their technology budget in 2020
  • Marketing automation is the most common problem insurers want to address with technology, with API integrations a close second

Finding a true business partner to help you grow your company

• Finding a partner who fits your company culture is key. “We’re pretty conservative, which you don’t typically see from entrepreneurs,” Milan observed. “They just want to go pedal to the metal; we want to grow a healthy company. We wanted a partner that could help us continue that growth in a very healthy manner — fiscally conservative but at the same time aggressive. In talking with the team at Serent, you care about the customers, you care about the partners, you care about long term growth, and you weren’t trying to get us to chase a quick buck. And that’s what was really important to us.”
• In a capital and business partner, collaboration is essential. “We see you as our peers and we get to talk to you as our peers,” Milan added. “And that’s really important to us. We want to go to you for advice, and run ideas by you and have you battle that back with us. And we have these nice healthy debates. That’s what you want in a partner.”
• A great partner can help accelerate growth. Serent played a key role in helping Todd and Milan grow a larger team at ePayPolicy. “One of the things that you guys pushed us to do was to say, hey, listen, like you don’t have to do it all yourselves,” Milan recalled. “You encouraged us to bring on more great talent so we could actually run faster. We accelerated the product roadmap, you built a board for us. And that’s been phenomenal and helped push the product in great ways.”

Advice for Insurtech leaders and entrepreneurs

• Develop a deep knowledge of the space. Understanding the Insurtech space is the key to success, Todd emphasizes. “Talk to people. Have real conversations about what’s working, what’s not. If you have an idea, get market validation. Don’t be afraid to knock on the door and walk in. Insurance agents are the most brilliant people on the planet. Just get out there and get to know people and know how it works.”
• Focus on strong customer relationships. In the insurance space, you’ll often find you’re connecting with family-run businesses. “You’ll run across agencies that are on the third generation, they’ve been passed down from aunts, uncles, grandparents, and whatever,” Milan observes. “You also understand that you’re going to be dealing with generational gaps. You could be talking to the dad who’s a little bit older and has different needs than when you’re talking to the son or daughter who’s maybe more tech-focused.”
• Be passionate about customer success. “Truly love your customer — really care about their success,” Milan advises. “If you always wear that lens, you’re going to always put yourself in their shoes and try to find things to help them. It also helps with relationship building. We’re a tech company, stuff breaks from time to time, and we make mistakes. But we just roll through that because our customers know we care about them and we resolve it really quickly.”

The insurance industry offers plenty of opportunities for digital transformation. By truly focusing on customer needs, founders can innovate the Insurtech space with creative solutions that help businesses better serve their customers. Here at Serent, we hope to equip Insurtech leaders with the strategies and resources to ensure their customers’ success — and have a transformative impact on the insurance industry.