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InsurTech and understanding the culture fit

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Culture can determine InsurTech success or failure

When traditional players in the insurance industry start discussing how they might work with InsurTech companies, the conversation usually moves quickly to tangible elements: technology compatibility, financial projections, legal structures and terms and conditions. This is understandable—it’s what corporate development teams do well. But companies often neglect one factor that looms particularly large in determining success or failure: culture.

Understanding cultural fit is important when considering any transaction involving two distinct organizations. It’s particularly important when considering how a large carrier might work with an InsurTech company, whether as an acquisition, a joint business relationship or just as a service provider. The very factors that often make InsurTech appealing—agility, non-traditional thinking, tech-oriented staffing, and so on—may struggle when integrated with an incumbent provider. If employees don’t see the value in staying, much of the relationship’s appeal can quickly erode.

Once you make cultural fit a priority, you may start to see potential problem areas, even early in the due diligence stage. In some rare cases, you may find that there are issues that can’t be overcome. More often, you’ll be able to address them by clarifying your assumptions about what is important to your potential business partner, and why.


Key takeaways

Don’t ignore cultural differences. Legacy insurance companies and InsurTech startups often have very different ideas about cultural norms for behaviors such as risk tolerance and how decisions are made. These can be overcome, but only if you make it a priority to do so.

Integration management involves more than technology. Once you’ve made a decision to work with an InsurTech partner, the choices you make can influence behavior, and these may be directly linked to the project’s success. Reward the behaviors you want to encourage.

InsurTech companies often bring different demographics and cultural values to the party

Just because one team is more entrepreneurial than another doesn’t mean that they can’t work together. But if there’s any hope of bridging this cultural divide, it depends on real transparency: understanding who the highest value employees are in the new organization, determining what they want and designing an integration program accordingly. In popular culture, this is sometimes interpreted as “let’s add a foosball table and a coffee bar.” Amenities are nice (full disclosure: PwC has foosball tables and a coffee bar in our New York headquarters), but the underlying issue is anything but cosmetic. InsurTech companies often bring different demographics and cultural values to the party. How can you make this new kind of employee feel rewarded and valued as part of an incumbent provider?

You can start by making change management much more than an afterthought. All organizations have explicit and implicit employee norms. It’s natural that there will be adjustments needed on both sides when Big Insurance and Scrappy InsurTech meet. In fact, as the integration process begins, everyone will be watching to see which norms will survive on either side. The most effective combinations happen when management is clear on what key employees value, and then designs programs to reward behaviors it wants to encourage.

Getting the most from InsurTech

When insurance companies start exploring InsurTech, they often zoom in on the tech first, looking for new systems to revolutionize procedures such as claims processing. Leaders look beyond features and functionality. These are the key components that take an InsurTech plan from strategy to execution:

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Matt Adams

Insurance Practice Leader, PwC US

Ellen Walsh

Insurance Advisory Leader, PwC US

John Fosbenner

Insurance Assurance Leader, PwC US

Julie Goosman

Insurance Tax Leader, PwC US

Richard de Haan

Actuarial Leader, PwC US

Eric Trowbridge

Insurance Marketing Leader, PwC US

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