InsurTech Coalition launched to lend “specific voice” on regulatory matters

Members of the newly launched InsurTech Coalition have been working together loosely for “quite some time”, but following a recent push from regulators the group decided to formalise the union and create a unique trade body with “a specific voice” for insurtechs.

Outlining the group’s key objectives in an interview with The Insurer, regulatory executives from Branch, ClearCover and Boost also noted that InsurTech Coalition has secured involvement from commercial lines firms which have yet to step forward publicly.

Jennifer Crutchfield, ClearCover’s VP of regulatory affairs, described the coalition as “a very diverse group” spanning personal and commercial P&C lines along with life and health, with the group aiming to address misconceptions regarding how insurtechs leverage technology.

She added that there remain opportunities to improve “speed of market” areas for insurtechs, such as more quickly getting licensed, filings approved and model reviews.

“Insurtechs have unique pain points around [those topics] because getting things [up and running] from scratch is a lot harder than a program that's been [in place] for four years,” she said.

“What we have been focused on so far is reasonable regulation in regards to technology, speed to market, and reasonable regulations to allow for the flourishing of competition,” Crutchfield said, noting the group has already been meeting informally for a number of years.

Grant Phillips, managing director of government affairs at Branch, said the group is eager to collaborate with regulators.

“A lot of these new technologies – AI included – are very complex and we have subject matter experts that work at our companies, and we can help [regulators] understand and learn as these technologies come out how they can be used to provide that transparency that I think regulators and consumers are looking for,” Phillips explained.

“We're there to work together with them when crafting different regulations or policies, or whatever it may be,” he added.

Group aiming to bring insurtechs’ use of tech “into the light”

The ClearCover, Branch and Boost executives said the group hasn’t yet laid out a specific policy list or agenda, highlighting the diversity of its membership, and cited a range of different policy issues that have gradations of relevance to individual member companies.

“The [main] topic that we are here [to advocate for is] to move technology into the light where it's viewed as a tool for doing good, for helping consumers understand their policy, helping to make insurance more available [and] more affordable,” Phillips said.

Crutchfield said the group’s initial focus was on commenting on the AI Bulletin recently adopted by the National Association of Insurance Commissioners (NAIC).

The ClearCover executive said the trade group is looking for “reasonable regulation” around AI, saying that consumers and consumer advocates also share the same goal.

“We’re uniformly aligned there, which is a nice first step, which is not always the case with these things,” she said, adding that the implementation of the tenets outlined in the bulletin would remain a focus for the group.

“We do obviously focus on the use of AI in insurance, which is something that a lot of our members – not all – are passionate about, and ways that we can use it both for the companies’ and the consumers’ benefit,” she continued.

Among the hot-button topics the InsurTech Coalition would be expected to work with regulators on would be variables used in pricing, but Crutchfield said it wasn’t a “top-five” policy issue for the group.

“There's a lot of variability in what would go into each company's particular [pricing], so we don't really touch it as much as maybe individual companies might,” she said.

“It's easy to focus on one or the other, but a lot of times when you're able to use AI to bring down overhead costs, that's really where there's a consumer benefit [or even] help with accelerated underwriting,” she commented.

Proactive engagement with NAIC H committee

The group has been proactive in engaging with the NAIC’s Innovation, Cybersecurity and Technology committee – also known as the H committee – while its insurtech members also have memberships to some legacy trade groups.

Crutchfield emphasised that the group’s member companies “have a great relationship” with existing industry trade bodies and that the interests of the InsurTech Coalition and the existing associations largely overlap.

To that point, the ClearCover executive said the reason for the group’s launch reflects the fact that certain topics are more relevant to insurtechs than incumbent industry players.

“Changes in different regulations and statutes will just hit differently depending on the size that you are,” she said, outlining natural differences between insurtechs and incumbents.

She also said that “collectively” insurtechs make up a much bigger portion of the industry than they do operating independently.

As an example, Phillips said there was generally strong alignment between the InsurTech Coalition and other industry trade bodies specifically on the feedback to the NAIC’s AI Bulletin.

“Some of these trades have over a thousand companies, and so to get things moving quickly can be challenging,” Phillips said.

“This provides us an opportunity to, on issues our membership cares about a lot, move quite quickly and quite effectively in a way that will give us hopefully a little bit better access and a little bit better timing when it comes to some of these issues,” Phillips explained.

He added that InsurTech Coalition “would absolutely love” to collaborate with existing industry trade bodies. “The more voices the better,” he said.

Broad mix of commercial lines, personal lines involvement

The trio was asked about the cohesiveness of the group’s agenda, given the diversity of its membership, and also whether there was any competitive tension among a cohort of firms working ambitiously to become established industry players.

Crutchfield described the InsurTech Coalition as a “support group” where even firms that compete with one another find common ground to help each other, saying the issues the group are focused on are broadly applicable to many of their businesses.

“Obviously we would never want to touch on anything that would raise concerns about antitrust,” she said, adding that the group is “very consumer focused”.

“When you have that in mind [and] making technology helpful and how to help the insurance companies … we haven't dealt with any issue yet [where there’s been] adverse opinions or commercial tension,” she explained.

Phillips said the group’s main message is they are “here to grow and we want to foster responsible innovation and technology use”.

“We understand that it's really important in today's market to be agile and quick on your feet and we aim to work together to make sure that we are collectively supporting the regulators in any of these matters,” he explained.

Crutchfield added that she didn’t think there were “any restrictions” on where the group could be effective, saying that it plans to collaborate with existing trade groups where insurtechs are also members.

Lindsey LaFond, Boost’s VP and deputy general counsel, said the InsurTech Coalition will be able to “take a more narrow approach” to issues facing insurtechs.

“The point [being] is that a tech-enabled insurance carrier is not something that's inherently bad, and I think that's kind of the stigma that there is right now where when you say the word insurtech or tech-focused insurance company, you're kind of looked down a little bit compared to if you just say you’re an insurance carrier,” Crutchfield explained.

Boost’s LaFond echoed those comments, saying the group aims to be a “resource” for regulators and to show how insurtechs use of technology isn’t as “scary as some folks might think.

“We [now] more formally made our presence known, so that we can make sure that we have a specific voice” on topics critical to insurtechs, LaFond explained.

The Boost executive added that a big initiative for the group in the year ahead is expanding the group’s membership and getting more insurtechs involved.

“We are really open to any type of insurtech company,” she said.