The Landscape of InsureTech: Navigating Product Management in Brokerages, MGAs, and Full-Fledged Insurance Companies

The InsureTech sector, a confluence of insurance and technology, has been growing rapidly. It’s transforming the way we perceive and interact with insurance, replacing traditional models with more efficient and customer-friendly alternatives. As a Technical Product Manager in this burgeoning field, understanding the nuances of your work environment is crucial. In this article, we’ll dive into the differences a Product Manager would face while building technology for three distinct types of entities: a tech-based insurance broker, an MGA (Managing General Agent), and a full-fledged insurance company.

A bit about my background: During my tenure at Ascot Group, I was intimately involved with product conception and buildouts in my role as a Product Owner and Project Manager. I worked on the formulating of operational flows between frontmiddle and back office, and then moved to the systems team to build out the technology to support that vision. I found fulfillment in the challenges that came with overseeing the launch of over 20 new products within three years. Our team’s efforts were rewarded as we witnessed these products collectively generate nearly $500M in premium by 2022. Our success was underpinned by diligent optimization practices.

Tech-Based Insurance Brokerages

Insurance brokers act as intermediaries between customers and insurance companies. They’re responsible for understanding customer needs and finding the best insurance policy to match. As a Product Manager in a tech-based insurance brokerage, your primary goal is to build a platform that simplifies this process.

Key aspects include:

1. User Interface (UI) and User Experience (UX): To keep customers engaged, the platform needs to be intuitive and user-friendly. The design should streamline the process of comparing and selecting insurance policies.
2. Integrations: The platform should seamlessly integrate with various insurance providers to fetch real-time data about different policies. The ability to implement APIs and manage third-party data is critical.
3. Data Analysis and AI: You’d need to invest in building robust data analytics capabilities. Predictive analytics and machine learning can help suggest the most suitable policies based on a customer’s profile and preferences.

Tech-based brokers have emerged as customer-centric platforms, leveraging technology to simplify the process of comparing and purchasing insurance policies. Their focus on user-friendly interfaces and seamless integrations with various insurance providers makes them an attractive choice for customers seeking a convenient and personalized experience. The rise of AI and data analytics has further empowered tech-based brokers, allowing them to offer tailored policy recommendations based on individual customer profiles and preferences.

Tech-Based Insurance MGAs

MGAs (Managing General Agents) not only sell insurance policies on behalf of an insurer but also handle claims and underwriting. As a Product Manager for an MGA, your focus expands to include additional layers of complexity.

Key aspects include:

1. Underwriting Automation: Streamlining the underwriting process is vital. You’d need to develop algorithms that can assess risk based on customer data and determine premium costs.
2. Claims Processing: An efficient claims processing system is another core focus area. It should allow customers to file claims easily and track their progress, while also facilitating fast and accurate claims verification and payment on the back end.
3. Regulatory Compliance: Compliance with various regulatory bodies becomes more prominent as you’d be handling sensitive customer data and financial transactions.

MGAs, in contrast to brokers, are taking on more responsibilities in the insurance value chain. They not only sell policies on behalf of insurers but also handle underwriting and claims processing. Technology plays a crucial role in streamlining these processes, such as automating underwriting and optimizing claims handling. This allows MGAs to manage risk more effectively and provide a higher level of service to customers.

Full-Fledged Insurance Companies

A full-fledged insurance company takes on the risk associated with the policies it sells. The role of a Product Manager in such an environment encompasses a broader range of responsibilities.

Key aspects include:

1. End-to-End Product Development: You’d be involved in the entire life cycle of an insurance product, from conceptualization to launch. This includes market research, product design, pricing, marketing, and distribution.
2. Risk Management: You’d need to build systems for risk assessment and management. These systems should help the company assess the viability of insuring potential clients and understand the potential exposure from various types of policies.
3. Digital Transformation: Since traditional insurance companies are often burdened with legacy systems, driving digital transformation could be a significant part of your role. This could involve modernizing core systems, migrating to the cloud, and leveraging technologies like AI, IoT, and blockchain.

Full-fledged insurance companies are leveraging technology to transform their core business processes and offer innovative products. These companies are investing in digital transformation initiatives, such as modernizing legacy systems, migrating to cloud-based infrastructure, and harnessing advanced technologies like AI, IoT, and blockchain. By embracing these technological advancements, insurance companies can improve risk assessment, enhance customer experiences, and develop new business models.

In Conclusion

The role of a Technical Product Manager in InsureTech varies based on the type of organization. While the end goal of all these entities is to provide insurance solutions, the path to get there can be quite different. Understanding these nuances helps tailor your strategies to the specific needs of the organization, thereby driving innovation and growth in the insurance sector. Remember, regardless of the environment, the customer should always be at the center of the product design and development process.

The market landscape between tech-based brokers, MGAs, and insurance companies is characterized by a dynamic interplay of competition and collaboration. Each player is leveraging technology to improve customer experiences, streamline processes, and uncover new market opportunities. As InsureTech continues to evolve, the lines between these entities may blur, resulting in further convergence and collaboration to better serve customers and drive innovation in the insurance sector.