A new hope: how to collaborate with startups in the insurance industry

Date: 17 September 2020
Author: Nikolaus Suehr, CEO & Co-Founder of KASKO

David and Goliath. Whilst a story from the Bible, is one of the oldest tales of little vs. large. The young and small David goes up against Goliath, with the ambition to take down the giant warrior. It’s not the only story where the underdog is pitted against a champion, and it certainly won’t be the last. But this mentality still rings true in the business world, where startups are often seen as competition to larger, established businesses – rather than being seen for what they should be. An ally.

We’re often positioned as a threat, the young company that has seen a new way of accomplishing something, that threatens the traditional mindset and what was. But if the COVID19 pandemic has taught business anything, it’s that innovation has never been more important. When you can’t create from within, you can collaborate with those already creating a suite of new products, services and using technology in groundbreaking ways, that will provide the speed and agility needed to not only survive, but thrive.

Startups really do provide a new hope to insurers. Collaboration is the answer. At KASKO, we know first hand just how much growth both parties can experience if they work together.

Where chemistry is key

Just like all good relationships, communications and clear expectations are key from the beginning. Misunderstandings, broken trust, and not being open will result in a negative experience for both – doing more damage. If this is your first experience working with a startup – or vice versa – you need to do everything you can to create an environment for success. If you don’t, you’ll be skeptical of other relationships in the future. This really is like dating at the beginning!

Problems can stem from the different cultures each business has. Corporates are process orientated, working on careful planning and decision-making that is for the long-term. It’s a slow process, not something that startups are used to, where often there are few processes in place and those that are, aren’t set in stone, allowing for faster decision making and an agility to adapt or pivot to new ideas. But together you can’t have one or the other, you need to be able to meet in the middle, learn from each other and adapt to avoid conflict – this is where transparency is crucial.

You also can’t start a relationship with the biggest project. Luke Skywalker didn’t master the force straight away! You have to start small, find a project that is small enough that both sides can learn to work together and see what might be possible. This means you can either double down and scale up a project if successful, or walk away and go separate ways without burning bridges. Startups embrace risks, larger businesses are risk averse, so think big, but start small and then scale fast, or pivot.

Insurance is an incredibly traditional and slow industry to adapt to change. We’ve spent many years now working alongside large incumbents on new products, services and processes that can be configured, tested and launched on our platform. We deliver the digital layer and our partners who have built their channels and products over decades, sell them. For some of the businesses we have been lucky enough to work with, we had to start very small, develop the relationship and trust, and then move on to more and ever larger engagements. We call it “land and expand” and I bet there is a quote by Sun Tzu about establishing a foothold first before expanding your forces.

Our own experience with KASKO and working with these partners, brings me to a crucial point for why collaboration needs to exist and how to get the most out of these partnerships.

Do not fear pivoting

We naturally fear change, because there is a risk of failure. That’s just part of the game when we look at partnering with someone, working on a new idea or business plan. You have to push past the fear. The same goes for when an idea that has been put into practice isn’t working, or part of your business that may have been a success in the past, no longer is.

You need to pivot. You need to do so quickly. We did it, originally we wanted to own our own products and channels, and go up against the large insurers. But while we started to get there, the speed of acquisition was too slow, so we decided not to work against them but with them. InsurTech-as-a-Service was born – we took the best parts of our business and applied them to a new market, building modern solutions, faster, for those who can’t (or simply don’t want to wait and overpay by 10x) but have the core insurance services and distribution touchpoints ready to be tapped into.

What you need to know before starting 

Startups will help a large business cut costs and add flexibility, bringing new ways of thinking and access to talent. You will learn a huge amount working with them – but only if you want to. If you do this to show that your business is ‘being innovative’ at a lip service level, you will miss out on a huge list of benefits and won’t establish a relationship of trust.

To start with, identify pilots or proof of concepts with a startup team, and establish the working rules of the relationship. What both sides want or need to succeed – and compromise! Focus on performance indicators, you can’t expect immediate results – treat this as a test, learn and iterate so we recommend focussing on leading indicators such as time and cost to market vs ROI, savings in opportunity costs vs cash out, number of partners vs number of policies, top line vs bottom line, low fixed costs vs low variable costs. Once you strike gold, you can optimise around more traditional performance indicators.

Set a clear goal – you both need to be on the same page. You all want to succeed, so don’t set anyone up to fail.

For startups, working with a much larger company is a fantastic learning opportunity. Being curious will help. You need to listen to your customer or partner, and gain new insights. But you also need patience – while you might be used to moving fast and breaking things, you also naturally carry far less risk. Be aware of what the risks are to your partner and aware of what they need and the assurances you can give by listening.

The opportunities if this is done well, are endless, for everyone involved. Together, a force awakens.

Nikolaus Suehr is the CEO and Co-Founder of KASKO. He has 10+ years of professional experience from strategy consulting, product management and sales. Prior to co-founding KASKO, he held Business Development and Consulting roles in insurance management companies like Funk Gruppe, OCC and Zeb. He was named the Best InsurTech Founder of 2019, and KASKO the Best Scaleup, by EXECinsurtech. His LinkedIn community has 10,000+ members and he hosts Entscheider LIVE,  his own live show for insurance leaders in the DACH region.


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