A16Z Podcast

It’s my latest favorite. See here.

I work in the insurance business but I find tech news much more interesting and useful to me professionally than insurance news. The reason for this is that the best business minds on the planet are in ‘Silicon Valley’ and they are pushing out the frontier on business innovation as well as technology innovation.

So I don’t learn about insurance from tech people (insurance isn’t changing much) but I do get to think about where disruption might hit insurance companies. A16Z’s latest podcast touches on what the arc of technological change looks like. Uber is a transport company, for example, AirBnB is a travel company.

The key question is what is the technological core of your industry? That is where tech startups will be looking for traction and radical innovation there might completely change your business.

Insurance is composed of two key business processes: risk management and fraud detection. Risk management (pricing, measuring diversification, capital allocation) is all tech. Fraud detection (underwriting and claims management) is close to zero tech. When I think about what changes are likely to hit our business, risk management is where the incremental change is already happening and will continue to grind away. Startups might try their hand at this but incumbents are all over it already.

It’s in fraud and moral hazard detection that the potential for real disruption exists.

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