As InsurTech continues to grow from concept to infancy in the U.S. P&C market, there are various areas of change management and transformation that have to addressed by distributors, carriers and new entrants. No area is as important and poorly understood as managing to the regulatory environment. Viewed as a “snoozer” consideration steeped in insurance’s dipped-in-cement past, InsurTechs overlook the importance of regulatory considerations at their great peril.
Rather than ignore the regulators, try to circumvent them, or hope they will adjust to you, the objective should be to accelerate regulatory adoption of your InsurTech offering for the marketplace
The key considerations are:
1. Regulatory Engagement
a. Engage the regulators early to build solid communication.
b. Many regulators respond positively to being brought early into the development process, this is particularly important regarding; coverages, building unique rate plans, introducing new pricing models.
c. Do not forget lead time, early engagement by the regulators will enable you to manage your offing launch date with greater certainty.
2. Clearly define your offering
a. What is the ask for the regulators to approve?
b. Come to the regulators for feedback on a very specific issue
c. It must be defined and quantified so that they can assess the impact on the market.
3. Articulate what changes that impact your insureds?
a. You have to be clear as to the impact on the Insureds:
i. Decreased price
ii. Increased Coverage and/or Service
iii. Enhanced ease of doing business
iv. Are there trade-offs for the Insured if they purchase your product
> For example, paperless
> Do you establish them as a paperless client for all documents, invoices and supplemental content unless they expressly opt-in for a paper option?
4. Demonstrate that you are adding benefits to the Insured as well as to the health of the insurance market of the targeted state
a. The new offering, capability or feature must demonstrate that it adds to the well-being of healthy insurance market for that state.
Remember, regulators are key stakeholders in your market. If engaged effectively by your team, you will have increased your opportunity to succeed with your offering. If you choose to avoid, ignore or marginalize your key regulators, you may inflict undue complexities, delays or costs to launching your offerings into the market.