The Future of Insurance Podcast - Caribou Honig, Chairman & Co-Founder of ITC (Episode S1E01)

The Future of Insurance Podcast - Caribou Honig

Chairman & Co-Founder, InsureTech Connect

Season 1, Episode 01, April 27th, 2021

Guest Bio

Caribou Honig enjoys pursuing harebrained ideas and supporting the growth of new businesses. He is Chairman & Cofounder of InsureTech Connect as well as cofounder of the HR Transform conference focused on the impact of technology on the workplace. Caribou serves as an independent board director with several startups and a general partner at SemperVirens, a VC firm focused on Future of Work investments. He previously cofounded QED Investors, a boutique venture capital firm focused on data-driven companies. Caribou and his wife live in Richmond, Virginia with their two occasionally annoying dogs.

Highlights from the Show

In 2015, he had a need for a conference that brought together investors, entrepreneurs and providers, and didn’t see anything out there, so he decided to create it – this was the best idea he ever had
In 2016 at the first ITC, he stepped back and looked at all the conversations going on that would not have happened without ITC, and knew the impact of his idea was huge
Caribou made a series of predictions at the first ITC, some were right and some were wrong
- Wrong
  - Parametric – was off on the scale of how much this would take off, and it’s been more of a rounding error than something that would take over the industry, as he predicted
  - High Speed & Degree of Geographic Expansion – most InsurTech startup winners haven’t jumped borders as quickly as he thought they would (Lemonade is a rare exception), especially crossing oceans or continental borders
- Right
  - Explosion of Activity – there has been a lot of entry and creation in the space
  - Level of Interest & Willingness of Incumbents to Partner – has almost been surprising how incumbents have been open to being part of the supply chain for startups (e.g. by being the paper for a startup) and accepting startups as suppliers into the legacy space
  - API-ification of Insurnace – saw it in the FinTech world, and saw no reason why it wouldn’t be the same in the InsurTech world, and that’s playing out
    - Technology is really about removing friction from the system, and APIs can do this in a game changing way as a structural shift that can open up more market forces into an industry
Will Big Tech takeover Insurance? There are two kinds of Big Tech – Tencent, Amazon, Google, Tesla – and Big FinTech
- Big Tech’s movement into Insurance is slow, at best, at least a decade before it shows up to people
- Big FinTech is a clearer and more present danger to incumbent carriers
  - Credit Karma, now part of Intuit, has a formidable number of client relationships, and has built out some interesting and slick capabilities in auto insurance
  - Neo-banks like Revolut and Newbank, offering some insurance products
There’s a big connection between the Financial Services and Insurance world outside the US, but not here, for some reason
- Connecting the data from the FinTech side can lead to better Insurance decisions, and then the marriage can make a lot of sense beyond just convenience of buying from a single place
Embedded Insurance – all enabled by APIs, and the next major wave people are talking about, but there are more layers to this
- Soft-embedded – buying something and there’s an extended warranty or insurance offer in the purchase flow that you opt into
- Hard-embedded – similar, but it’s an opt-out, so if you do nothing, there will be a line item in your bill for it, which is better for situations where there could be adverse selection issues like in Group Benefits
- Invisible Insurance – just included without the option to opt in or out, like a warranty on a new car or a doctor’s medical malpractice insurance where in neither case can you sign a waiver to not sue or expect free repairs for a lower price