Hartford:

The Next InsurTech Capit

FEDERAL ADVISORY COMMITTEE ON INSURANCE MEETING

MAY 10, 2018
AGENDA

• Creating Hartford’s InsurTech Ecosystem

• The InsurTech Landscape & Drivers of Change

• How Insurance Is Embracing Innovation

• Partner Perspective: Why Hartford? Why Now?

• Next Steps: Growth & Ways to Get Involved

• Connecticut’s Regulatory Perspective on InsurTech
Creating Hartford’s

InsurTech Ecosystem

MICHELLE COTE, MANAGING DIRECTOR: CONNECTICUT CENTE

ENTREPRENEURSHIP & INNOVATIONUNIVERSITY OF CONNECTICUT SCHOOL OF BUSINESS
AWARDEE

THAMES RIVER

AWARDEE

HARTFORD/EAST

HARTFORD

AWARDEE

STAMFORD

AWARDEE

NEW HAVEN

Innovation

Places

Additional

Programs

FY 18: $

state fu

+ $3.7M 

match 

in‐ki

contribu

Planning Team: • Corporate Partners• City Leadership

• Key Implementation Partners

• Higher Education Representatives• Entrepreneurs

Innovation

in Industry

Physical

Place

Social

Capabilities

1 Emergent Conditions:

Strategic Opportunities/Challenges:

ADVANCINGINNOVATIONINCONNECTICUT:

2
CONNECTICUT’S STRENGTH IN INSURANCE

$44.6B

(19.5% Connecticut GDP)

ActuarialTalent in US emp

Con

& Re

#1

1,449 $33B 110 2

Source: 2017 Connecticut Insurance Market Brief (PWC) and Connecticut Insurance Department

InsuranceProfessionalsPer Capita #1 5

Insurance Companies

licensed to do business

in Connecticut

Annual Premiums

written by ConnecticutInsurance Companies

Insurance Companies

Headquartered in

Connecticut

Age

Adj

Prof
• Establish Hartford as a globa

of InsurTech activity

• Attract new technology start

• Create strong pipeline of tale• Increase innovation activity w

insurance companies

GOALS:

CURRENT PARTNERS:

InsurTech

Start Ups

Service Providers

Accelerator

Higher Ed

Partnerships

Distributors

Insurance

Companies Investors

Mentors

Events

Local

Government

Co‐Working

HARTFORD’S DEVELOPING INSURTECH ECOSYSTEM
PROGRAM LAUNCH: INSURTECH ACCELERATOR

Phase 1 Phase 2 

Shape: Build:  Business

ModelCanvas

 Intro Pitch Investor

Deck

 Minimum

ViableProduct

 Financial

Model

300+

applications

 Functioning Technology

 Relevance to Insurance

Value Chain

 $150,000 ‐ $500,000

working capital

 Operational Governance
SPRING 2018: 10 STARTUPS IN FIRST COHORT
The Evolving

InsurTech Landscape &

Market Drivers of Change

JILL FRANKLE, AVP STRATEGIC VENTURES, THE HARTFORD

BETH MAERZ, VP CUSTOMER EXPERIENCE AND INNOVATION, T
Profound Impact on Industry:

• Digital Engagement, Speed and 

Transparency

• Evolving Attitudes on Asset 

Ownership/Sharing

• Changing Models of Mobility

• New Solutions for Home 

Protection

• Emerging risks, i.e. Cyber

Emergen

to reimag

Distributio

Customer expectations are being shaped by 

their experiences in other industries.

Changing 

Consumer 

Expectations

Data and analytics is transforming

every aspect of our business.

New Data & 

Analytic

Methods

DRIVERS OF CHANGE IN INSURANCE
Global InsurTech Investments & Deals ($M)

OVER $9B INVESTED IN INSURTECH SINCE 2012
Source: CB Insights Q417 Insurance Tech Report. Total funding of $9B is slightly less than totals on prior slide. Differences due to timing of data pulled from CB Insights.

INVESTMENT TRENDS IN INSURTECH

$0.5B in 70 companies

6% by $

15% by cos.

$0.2B in 25 companies

2% by $

6% by cos.

$5.9B in 256 companies

65% by $

57% by cos.

$2.4B in 100 companies

27% by $

22% by cos.

In 2017, 

see a shif

front‐end d

back‐en

techn
Source: CB Insights Q417 Insurance Tech Report.

STARTUPS: PRODUCT & DISTRIBUTION
Source: CB Insights Q417 Insurance Tech Report.

STARTUPS: BUSINESS PROCESS ENHANCEMENT
Source: CB Insights Q417 Insurance Tech Report.

STARTUPS: DATA & ANALYTICS
Source: CB Insights Q417 Insurance Tech Report.

STARTUPS: CLAIMS MANAGEMENT
How Insurance is

Embracing Innovation

JILL FRANKLE, AVP STRATEGIC VENTURES, THE HARTFORD

BETH MAERZ, VP CUSTOMER EXPERIENCE AND INNOVATIO
TWO TYPES OF INNOVATION

As a result of these differences, a variety of approaches to innovati

• Shorter‐Term• Incremental Improvement

• Fix Broken Processes• Driven by Day‐to‐Day

Pressures

• Longer‐Term• New Business Models

• New Revenue Streams• Less Constrained by

Day‐to‐Day Pressures

Tactical Innovation Strategic Innovation
MULTI‐PRONGED APPROACH TO INNOVATION

Focus Areas

• Collaborate with startups

• Prototype and pilot future capabilities

• Incubate business models of the future

Innovation Lab

Develop Future‐State Capabilities & New Business Models

• Invest directly in start‐ups

• Form alliances with VCs and accelerators

• Deliver strategic insights

Core

Operations

Strategic

Initiatives

Horizon 1

(<18 mos)

Horizon 2

(18‐36 mos)

Business Unit

Initiatives

• Achieve short‐term performance goals• Seek better, faster, cheaper

• Test applications for new technology

Accelerators & Aca

Partnerships

Corporate Ventures

Access Emerging Trends, Technologies & Business Models

Business Units

Deliver Operating Plan & Optimize Existing Capabilities
Responding with New

Products and

Capabilities

New

Products

Developing an Outside‐

In Perspective Regulatory

Creating New Ways of

Working

Digital

Capabilities

Technology

Modernization

Partnerships

&

Universities

Startups/

Accelerators

New Talent

Human

Centered

Design

Agile,

Focused Teams New Skills

INNOVATION INSIDE THE INSURANCE INDUSTRY
Partner Perspective:

Why Hartford? Why Now

JILL FRANKLE, AVP STRATEGIC VENTURES, THE HARTFORD

BETH MAERZ, VP CUSTOMER EXPERIENCE AND INNOVATI
HARTFORD’S STRENGTHS & ASSETS

Industry Representation & Proximity

Access to Talent

Source: McKinsey. CT is ranked #1 for density of actuaries

25+ insurance companiesin and around Hartford

7% of current employees

in Insurance/FinancialServices

Local acces

increases iwithin part

Startups helps attracttomorrow’s workforce:Advanced Analytics, Data

Science, UX/UI

Local Colleges & Universitiesproduce young talent with

relevant skills

Existing, Wo

participatioculture
 Promotes Culture of

Innovation

 Face to Face, Focused

Interactions

 Speed of Experimentation

 Ecosystem Development

(New Talent & New Ideas)

Carrier Benefits

WHY AN ACCELERATOR WAS THE RIGHT FIT FOR HARTF

 Mentorship & Deve

 Close Collaboration 

Cases & Pilots

 Concentration of To

in Hartford, Boston

 Technical Talent

 Cost of Living/Setu

Startup Ben
AN INNOVATION ANCHOR: HARTFORD’S INSURTECH H

Source: Startupbootcamp.

Pilots Secured by Startups

Hours spent with Startups by local mentors

Startups Establishing Off

Registrants for D

21 4

300 659
Next Steps:

Plans for Growth &

Ways to Get Involved

MICHELLE COTE, MANAGING DIRECTOR: CONNECTICUT CENTE

ENTREPRENEURSHIP & INNOVATIONUNIVERSITY OF CONNECTICUT SCHOOL OF BUSINESS
REFLECTIONS ON YEAR 1

 Visible Spark for Economic

Growth in Hartford

 Robust Partner Engagement

 Internship Program Community Partnerships

 Engage more mem

community

 Higher Ed Workforce Associations

 Increase Pilot Activ Replicate “Buzz” Ye

Early Successes Opportunities for 
GROWTH & NEXT STEPS

 More Partners Broaden Participation

from Region and

Nation

 Coordinate with other

InsurTech Centers

 Host Regional and

National Events

East Coast Hub Specialization Follow 

 Develop Specialty

around Segments ofInsurTech:

 P&C Health Life, Annuity &

Retirement

 Attra

Capi

 Incre

Deve

 Exte

for P

Com
Connecticut’s Regulatory

Perspective on InsurTech

TIMOTHY CURRY, DEPUTY COMMISSIONER

CONNECTICUT INSURANCE DEPARTMENT
• Economical, more flexible and easier‐ to‐access InsurTech solutions can encour

and the less‐affluent consumers to make appropriate risk‐transfer decisions

CORE MISSION: CONSUMER PROCTECTION

Healthy, Competitive Insurance Markets are Essential to the Mission

• InsurTech innovations are revolutionizing certain markets and fundamentally c

how carriers and policyholders interact

• Regulators must be “at the table” or risk irrelevance

Innovation Can Reduce Society’s Uninsured & Under‐Insured Segments

Risk Mitigation Benefits

• Many InsurTech solutions focus on new and innovative ways to prevent loss; th

benefits carriers and policyholders
BALANCING INNOVATION AND REGULATORY STANDARD

Flexibility – Where Possible Holding Firm – Where NInnovations call for re‐examining older

protections in light of new realities:

Financial Strength:Market Conduct; Discrimination

• Reconciling 30‐day cancellation and

nonrenewal notice requirement for a product

with an entire policy period of 7 days

• Re‐examining statutes and regulations

requiring paper delivery of policy documents

• Waiving seasoning requirements for

innovative startup carriers wishing to enter a

state’s market

• Compliance with minimum sta

requirements for an entity per

offer insurance to the public

• Predictive models and/or mac

techniques must demonstrate underwriting and pricing meth

• “Big data” must bear a rationa

the intended subject matter abiased assumptions
SUPPORT FOR STARTUPS

Expertise, Openness, Outreach

“Office Hours” Initiative

• Commissioner Wade is a member of the Innovation and Technology Task Force 

Executive Committee, and of the Big Data Working Group

• CID staff have participated on a number of InsurTech‐related panels and attend

state and national conferences

• The Department has visited the Hartford InsurTech Hub on several occasions an

of Department staff attended the first Demo Day in April 2018

• CID is currently arranging to provide staff on an “office hours” basis to enhance 

to the InsurTech entrepreneurs in Hartford and encourage an open dialogue

• Purpose: to ensure InsurTech entrepreneurs can vet ideas for regulatory conce

as possible
THANK YOU

WWW.HARTFORDINSURTECHUB.COM