The term was initially used to describe insurance technology disruptors, but should it be made redundant as the sector shifts to a collaborative position? 

By technology editor Clare Ruel

Ask ChatGPT what the term ‘insurtech’ means and it will spit out the following: “Insurtech, short for insurance technology, refers to the use of technology to innovate and improve various aspects of the technology used in insurance”.

Clare Ruel

Clare Ruel

The term – apparently – encompasses a wide range of technological advancements and digital solutions that aim to enhance the efficiency, customer experience and overall operations of insurance companies.

Born in 2010, insurtech is a subset of fintech and is used to describe new insurance technologies such as apps, artificial intelligence, machine learning, blockchain and automation that aim to improve the insurance value chain.

However, 13 years on, does the term still serve its purpose? Or have things moved on?

It seems like the industry is divided on it.

Back in February this year, at Insurance Times’ BrokerFest 2023 insurtech stream, Oxbow Partners senior manager George Hanks debated whether the term was now redundant while unveiling the first annual Insurance Times Insurtech 50 report.

While Hanks noted that both insurance and technology were “intertwined”, he said  addressing delegates “it feels like ‘insurtech’ is becoming slightly unhelpful as a term,” especially as the sector had shifted from presenting itself as a disruptor to becoming more of a collaborator.

Shifting purposes

In this month’s TechTalk, I explored the “maze” of problems that insurtechs experience when acquiring different types of licences

Researching this feature also brought another issue to the surface however – what do you call insurtechs that operate with a broking or insurance licence? Are they an insurtech broker? An insurer? Still an insurtech? 

Situations whereby a firm starts life as an insurtech and later obtains a broking licence have also baffled the industry.

Paul Stanley, chief executive of Insurtech 50 firm 360Globalnet told me “the term has been hijacked by players who want to enter the insurance market”.

He explained: “Everybody is trying to do something a little differently and it makes it confusing. Insurtech is short for insurance technology, it’s not short for insurance firm or an MGA. You are what you are – if you underwrite risk, you are an insurer.”

The difficulty here is that the term insurtech has sometimes been used interchangeably. For some, the term is used to refer to technology companies that are deploying their solutions into insurance, while others use it to describe companies from within the insurance sector that make technology a large part of their corporate identity.

Are we all insurtechs?

Meanwhile, Scott Holmes, sales director for UK and Ireland at Quantee, agreed that the term may have got “lost, or certainly [become] more vague” since its inception.

Holmes said: “Insurtech now broadly refers to the use of technology in the insurance industry and is synonymous with innovation in insurance technology particularly, rather than this being more focused on startups as it was in the past.

“Perhaps we are getting to the point though, where we are all insurtechs as it is almost impossible not to utilise technology for insurance.”

Stanley also noted that when Direct Line burst on to the scene back in 1985 launched by Sir Peter Wood, it was considered disruptive as it was designed to cut out the broker and instead sell directly to the customer using call centre technology.

This further blurs the lines because the insurer was the first UK insurance firm to use a piece of technology – the telephone as its main communication channel.

Holmes added: “It’s become detrimental to not innovate, so are we all insurtechs now?”

On the flip side, Ed Halsey, chief operating officer and cofounder of Hubb, said he stands “steadfast behind [the term insurtech’s] essence and potential”.

He continued: “Yet, the vagueness surrounding its labelling troubles me. Words, in their truest form, are bridges to mutual understanding – however, ‘insurtech’ currently stands on ambiguous grounds.

“When one word yields ten interpretations, it risks losing all meaning. Whether it signifies innovative software, tech-driven distribution or sheer innovation remains unclear. For the term to retain its weight, clarity is paramount.”

What’s in a name?

One point that Stanley emphasised was that the word ‘insurance’ cannot be present in the name of a company that is not a risk carrier due to regulatory measures, as this would be miscommunication to customers.

Stanley said: “You can’t get a company registered at Companies House with the term ‘insurance’ in it unless you are insurer.

“You can’t give the impression that you are underwriting insurance through the title you’ve got for your company.”

This is why, in some instances, companies may rebrand as their focus shifts. It is also why some insurtechs have adopted fun and memorable names that have nothing to do with insurance.

Lemonade, for example, opted for a more symbolic name, with its tagline being “when life gives you lemons, make lemonade”.

Insurtech 50 firm RightIndem’s name, on the other hand, is short for “right to indemnity”.

Personally, I have become quite fond of the term insurtech and hope it sticks around. I have covered insurtech at Insurance Times since I started here in July 2018 and also covered fintech at a different, prior publication.   

However, I am also all for innovation and if getting a licence helps insurtechs do that – I am here for it.