8 NOVEMBER 2020Tom WardenIN MY OPINIONBy Andrew Lerner, Managing Partner, IA Capital GroupHow to Engage with Insurtech StartupsInsurtech startups have emerged as a main driver of innovation in insurance technology. Insurance companies of all sizes need to engage with insurtechs to explore partnerships and keep abreast of technological trends.Who Should EngageAt the 15 insurance companies that invest with us, at least one person is typically designated to build relationships with startups as a major part of their job description. The seniority of the designated person is not particularly significant. At small insurers, this person is often the CIO or CFO, or one of their direct reports. At mid-size insurers, the designated person is typically the head of corporate development or chief strategic officer. At large insurers, multiple people will have the role, as each division may have their own corporate development officer. Large insurers may also have internal strategic venture capital units, which typically have the closest ties to the insurtech community. Strategic venture capital is less about the handful of investments that are actually completed, and more about benefiting from exposure to the thousands of startups across the insurtech ecosystem. An investment in a strategically interesting startup can create alignment, enhance visibility into emerging technology and trends, and allow for upside potential. On the other hand, having both a commercial relationship with and an investment in a startup can create potential conflicts of interest.Make the ConnectionStartups range in size from pre-revenue companies securing their first seed financing to more mature corporations on their fifth (Series E) or later institutional funding round. While my firm focuses its investment activities on Series A, B, and C
< Page 7 | Page 9 >