Ty Sagalow is the Co-Founder and Chief Insurance Officer of Assurely, an insurtech that delivers insurance for changing industries and innovative companies. Ty was interviewed by Michael Fiedel, a Managing Director at InsurTech Ohio and Co-Founder at PolicyFly, Inc.
Ty, can you educate our community about your history and influence in the insurance industry, specifically within insurance technology?
“I've been working in the insurance industry for about 40 years, starting in the traditional insurance market at American International Group (AIG). I was with AIG for about 25 years in a variety of roles: chief underwriting officer, chief operating officer, general counsel and chief innovation officer. The insurtech bug hit right at the beginning of 2015, when I was recruited by two guys who wanted to create a company with the funky name of Lemonade. I was employee number three of Lemonade, the founding Chief Insurance Officer and the founding CEO of Lemonade Insurance Company. I had a wonderful time, even wrote a little book called The Making of Lemonade. After Lemonade, I was looking for my next experience in insurtech and created Assurely with David Carpentier.”
How has the rapid growth of technology in our society changed the overall customer experience?
“There's a tremendous gap between the technological advances that our society has made and insurance, which has never been the most innovative industry. For someone who has made a living and a career at being an innovator in the industry, it's sort of a bizarre career choice. A long time ago, I decided that if you want to have a lot of fun, choose a place where nobody else has gone. So, because of the large amount of technological advancements that were needed in the insurance industry, I decided to become an insurance innovator and was eventually called the Godfather of Insurtech.
Technology created companies like Uber and Lyft which resulted in the rethinking of the traditional taxi cab. The insurance industry had no idea what to do with that. You either get commercial insurance or personal auto insurance. It took years to figure out what type of license to give an Uber driver. In our personal life, we now expect everything to be the Amazon experience, right? You expect to be able to go on Amazon and buy something instantaneously. Customer expectations, and not just consumers but businesses as well, have significantly changed and will continue to change as a result of advances in technology. Customers don’t necessarily need a frictionless experience, but they expect it. They also expect all the other items around trust, safety, confidence, etc that are basic emotions that insurance clients have (and deserve) from the insurance industry, yet historically, rarely get.
At Assurely, we call providing this customer experience the E-Z Pass method. You're going down the road, and all you want is to get to where you’re going. You understand that the road and the highway have bumps and potholes that have to be maintained. You’re okay with paying for the maintenance of the roads, but you don't want to be stopped, roll down your window, give somebody at the toll-booth money, receive change and a receipt.
It's really a pain, and that's the way it was with toll-booths. It interrupted your journey, but eventually, an easy pay pass was created. It went through many different iterations until we have the E-Z Pass of today, which allows you to simply continue your journey. The E-Z Pass is overhead. It takes your money in order to maintain the tolls and the roads. That's okay with you because it doesn't interrupt your journey. It's just part of your commercial experience, and that's what insurance should do. It should give you all those basic emotions like trust, safety, and confidence as you go through the world without interrupting your experience.”
If we think about continuous technological growth on the horizon, can you speak to the solutions that the insurance industry must adopt to meet the needs of consumers within its own space?
“It's actually one of the reasons why we created Assurely and one of the reasons why my partner, David Carpentier, and I decided to get together. In the industry, the notion of the E-Z Pass method is now starting to be referred to as 'embedded insurance’. Today, embedded insurance is at least a $3 trillion market opportunity, which we should be careful not to confuse with the insurance industry’s traditional affinity marketing model, which was just a name given for brokers marketing to specific membership groups in traditional ways. Embedded insurance is very different in that it becomes a seamless part of the existing customer commercial economic transaction, hence my EZ-Pass analogy.
How do you embed insurance into commercial transactions? Easy. Folks are just going about their usual day; folks could be individuals or companies, with risk. They don't mind the idea of having insurance. They understand it, and they know they need it. They just don't want to be interrupted by it. When we embed insurance or as we call it, Insurance-as-a-service, into the technology highways of today’s business, it does not interrupt, it allows folks to carry on with their day and get proper protection, similar to a car going through the E-Z Pass lane. If technology is the real estate and the new highways of commerce, then providing insurance-as-a-service is the EZ-pass. This solution is already getting positive feedback throughout the industry, and when you combine this customer experience with data and responsible underwriting, you have the next model or generation of insurance.”
On the one hand there has been a great deal of talk about insurance-as-a-service or embedded insurance disrupting the industry. On the other hand, how do you think this innovation will undoubtedly benefit the industry as a whole?
“Disruption is a word that we don’t love using at Assurely. If there are “disruptors” in the industry, it’s the clients and customers, and that is exactly how it should be. We, as industry suppliers, are tasked with understanding, anticipating and adapting to their needs and helping the other key stakeholders evolve to meet the market's changing needs.
In the same way, folks talk about innovation as being disruptive, but I don't like to think about it that way. Innovation is actually about creation, not disruption or destruction. It’s evolutionary. Take travel insurance for an example. Today, travel insurance is a lot different than it was in the past. Remember when you went to your travel agent, and you got a ticket? Who does that anymore? A travel agent could think of themselves as being disrupted, but that's not the right way to think of it. A whole new travel industry was created by the way of the internet.
Now, that's true of insurance and innovation as well. If you look at the creation of the new way of having insurance, it’s really a method of adapting to a new way of doing business. It's adapting to the needs and meeting the changing customer experience in ways that have never been done before.
For example, our first product at Assurely is called TigerMark, a specifically designed insurance program for companies raising capital via crowdfunding. Our method is going directly to crowdfunding portals and saying to companies raising capital on the portals, ‘Look, you're using these crowdfunding portals to raise money. We're going to embed ourselves into these portals, so you can just go about your business raising money. If you want insurance, we're there, and we can protect you.’ That is the EZ-Pass method in action.”
In 10 years, where do you think the insurtech industry will be in terms of how citizens interact with insurance?
“So, this is probably the most common question I get. What will they call insurtech in five or ten years? Insurance. That’s it. Insurance. There won't be anything else. It will simply be called insurance. If we go back to the E-Z Pass, for example, that's how folks will expect insurance to work. Will that disrupt the life of the insurance broker? Of course not. There will always be a place for the insurance broker. It will just be created into something else.
For example; I recently signed an MGA (Managing General Agent) agreement with a new insurance carrier and with a fascinating new partner, Unboxed. They created an app for sneaker collectors, aka “sneakerheads”, providing services for them to manage their sneaker collection, including, but not limited to, insurance. So, you go on the Unboxed app and upload your sneaker collection. They offer a number of services for you, and insurance is automatically included. No fuss, no stress and no insurance application. Your collection is automatically insured. That’s what the future of insurance is going to be about.”