Jeremy Deitch is the General Counsel and Head of Compliance at Boost Insurance, a digital insurance platform that enables companies across all segments to build, embed and manage digital insurance products and deliver them through a fully embedded experience within their own front-end environments. Jeremy was interviewed by Michael Fiedel, a Managing Director at InsurTech Ohio and Partner at PolicyFly, Inc.
Jeremy, what do you find are the biggest challenges in the insurtech space?
“I think the main challenge faced by any technology-forward company in a highly regulated industry is creating and maintaining the vital translation layers between stakeholders - both internal and external - that foster innovation and regulatory approval.
The first translation layer is internal, between the business/insurance on one side of the company and the tech on the other. Each side speaks in a very different language - whether it’s insurance lingo or code - and if a company cannot establish a translation layer for the two sides to collaborate, innovation dies on the vine. At Boost, we cultivate ongoing education between the two sides, so each learns the other’s language, to the extent possible, and equally important, learns each other’s perspectives in problem solving.
The second translation layer is external, with the insurtech on one side and the regulatory bodies on the other. If insurtechs aren't able to communicate effectively the “what” and “why” behind their utilization of new tech and innovative data sets, it’s impossible to create a meeting of the minds with regulators. Without that, we limit our ability to collaborate and allow for the best possible product, both from a business standpoint as well as from a consumer-protection standpoint. At Boost, we take every opportunity to interact and exchange ideas with regulators, with the same goal in mind as our internal exchange, to make sure we can speak the same language and that our respective perspectives are fully understood.”
How consistent is feedback from regulatory voices?
“In the United States regulatory body, you have 51 different jurisdictions, and therefore, you have 51 different countries of regulation. There are some states that are more engaged in proactive or reactive feedback than others. The goal, not only of Boost but the emerging leadership from the insurtech space as a whole, is to create more consistency amongst the states. It's not just on an individual product basis. Boost always looks to that feedback, not only for one specific product to get it to market, but for the next product in the pipeline, to try and continue the evolution of speed to market for innovation to actually thrive.”
Do you feel like regulators are as interested or even motivated to learn from insurtechs?
“There is no question that the interest and motivation exists in the top offices of state regulators. The key is to make that excitement and motivation known to the individuals that actually review the filings on the day-to-day. We, the insurtech community, have to proactively educate not just the commissioners, but also each regulator we are able to interact with about the application of technological advancements and how they now fit within the complex, multi-faceted regulatory schemes put into place many, many years ago. We’re asking that these regulations be applied to technology that was impossible to contemplate when they were enacted. The only way that individual regulators can possibly reconcile these seemingly countervailing ideas and use the proper lens when analyzing a product for approval is if they are educated by the insurtech community about their importance, so the entire regulatory body exhibits the drive and motivation we see from the commissioners to learn about these new technologies.
I also think insurtechs need to change their perspective on regulators. Those on the regulatory side are driven by protecting the end consumer, not stifling innovation. Ultimately, the insurtech community is also motivated by satisfying the end-consumer. We must be cognizant of what the regulators are trying to do, and that is not to be adversarial to the insurtech revolution. In reality, they are the key component to innovation in this space. They have seen it all, and they have the consumer’s best interests at heart. In reframing their role, we hope to bring them to the table to collaboratively discuss what is and isn't working so that, together, we can modernize the insurance industry from a product and tech-innovation perspective.”
How do you culturally see this relationship between startups and regulators? And what are some of the ways in which you're trying to improve communication between these parties?
“We’re at an inflection point. We need to reach out to regulators to have the conversation on AI, big data and programmatic underwriting, so we can educate each other. How does digitally embedded insurance work, and how can it be utilized to bring insurance to those that maybe have not seen it before? The answers must come from both startups and the regulators.
Our motivation is to shrink that insurance gap - the gap between what insurance consumers need and what they can get - to make insurance products more accessible and easy to use to protect everyone. Boost is extremely fortunate to work closely with a group of cutting edge, industry-leading insurtechs from the P&C, life and health spaces. What we've done is come together and try to unify our voice, so it's not just the individual pings of self-centered initiatives. Instead, let's look at it this, collectively, as the leaders of the insurtech space. How do we proactively reach out and educate? Which commissioners can we collaborate with, so we can begin at the top and make sure they understand this is an act of collaboration, bringing the best possible products to each state's individual consumer.”
What unique perspectives does having a legal background bring to the insurtech space?
“I’m a lawyer that's practiced in the insurance space and has moved over to the front lines of the insurtech revolution. Insurance is one of the most innovation-starved industries that you could possibly find. I always try to look at every legal decision through a lens of innovation. How do we apply a regulation to technological advancements that we're trying to utilize where that regulation is silent on the subject? I think regulatory and technological advancement have too often been thought of as a juxtaposition. There’s an opportunity however to drive organic creativity that feeds both of these necessary forces in the industry, and we’re building that from various perspectives at Boost.”
There's a lot of misconception that the insurtech movement is all about technology. What do you believe innovation really means, especially within the insurance industry?
“You have to look at innovation in different ways. Boost empowers any company to offer digital P&C insurance products to their customers through a fully embedded experience. Our customers are leading technology companies and startups, and they want to offer white-label insurance products tailored to their user's needs. Boost is tech forward and innovation driven, but Boost’s “innovation” is not limited to its technology, it pervades all aspects of its business, including our insurance products.
For example, our start-up management liability product is predicated upon the fact that all startups need management liability insurance, but typically don’t have access to it. Most are deemed ineligible and denied coverage outright under legacy underwriting guidelines or are forced to pay exorbitant rates. We asked, what is making the insurance companies uncomfortable, and how can we innovate in this space? We ended up developing a proprietary algorithm to make a more intelligent risk assessment and built our product from the ground up. Our product offers the most comprehensive coverage at the best price for startups.
Now, we're serving a class of startup consumers that were previously priced out of the risk, and opening up opportunities for insurers that could enter this type of market. Now that startups are able to obtain the necessary insurance coverage to raise funds on a venture capital side, they're able to use those funds to create new products and innovate on products well beyond insurance. We try to not allow ourselves to be pigeonholed into just the tech aspect versus the overarching strategies that define innovation.”
Do you have a parting thought on how to better engage regulators as part of the insurtech community instead of an external influence acting upon it?
“There is an internal shift within the community of insurtechs to not just look at ourselves as individual companies operating on an island; we're trying to look at the community as a whole and pave the way to be inclusive of all perspectives in the industry. At least among the insurtechs themselves, there’s a sense of comradery that I am really encouraged to see.
It's been enjoyable seeing that unison within our community because that outreach is not just coming from the startups, it's actually coming from the regulators too. That gets lost in the message as they're seen as the bad guys who are overly conservative and cautious. I'd be lying if I said that I never felt that way at times, but we have to change that perception because it's not the reality. Regulators are just looking at this from a different lens. It's an important aspect from our side to make it known that the state regulatory bodies are in this for the right reasons. We all just have to work toward a unified message.”