An insurance company is entirely a service company. It provides services based on a legal contract called an insurance policy. And the insurance company has the fiduciary responsibility to ONLY pay the claims, or parts of a claim, that meet the terms, conditions, and restrictions of the policy.
But an insurance company is NOT a technology company. An insurance company must comply with State insurance regulations dealing with capital requirements, reserve and surplus requirements, and investment requirements at a minimum.
An insurance company continually operates as an Operations Research situation: solving a problem (providing insurance cover in a manner that generates profitable premium) in the face of multiple constraints (regulatory requirements of each State it conducts business, regulatory requirements of the Federal Government when applicable; underwriting requirements of the insurance company; actuarial guidelines of the insurance company; claim philosophy and payment guidelines of the insurance company; investment requirements of the insurance company).
If an insurance company tries to manage itself as a technology company, it will, thankfully, financially fail. (Any VC or other investor or entrepreneurial manager of a startup insurance company – specifically a property/casualty insurance company or broker firm – who celebrates ‘hockey stick’ growth should be hit across the head and shoulders with a 2 X 4 repeatably.)
An insurance company is entirely about managing / mitigating risk to protect society, families, individuals, and businesses: technology is an enabler but technology doesn’t and can’t transform an insurance company into anything but what it is – an insurance company.
One problem is that I’m cursed with 40+ years of experience working for insurance companies, being a management consultant to insurance companies, and analyzing the insurance industry. I’ve seen many situations across the major lines of insurance and in many countries around the world.
People who believe the use of technology can transform insurance companies into technology companies are snake oil salespeople at best and spreading a virulent business cancer at worse.
Their vast levels of ignorance will put insurance customers’ assets and lives at risk.