The Israeli Insurtech Accelerator, which was established by Ayalon, Insurtech Israel and the American BrokerTech Ventures insurance giant, has completed its first Cohort.
Participating in the first cycle were:
- Insurights – which assists insureds in realizing their rights in health insurance
- Ravin – which is developing a system for remote checking of vehicles
- GamaSec – which is developing cyber protection systems
- Serenus.AI – which has developed a system for checking medical decisions and preventing unnecessary treatments
- CI – which has developed an embedded insurance-based model for selling insurance
- Five Sigma – which has developed a claims handling platform.
The accelerator’s partners include, amongst others, the Japanese Sompo insurance company, the international Deloitte firm, Sapiens, Dell, Miliman and the Shibolet accounting firm.
Also partnering in the accelerator is the Alifim insurance agency headed by Alex Chernomordik and Tikotsky. The project is led on behalf of Tikotsky by Sharon Tikotsky who was recently appointed as head of the agency’s business division, And Alon Tikosky – the CEO.
Participating in last week’s event marking the completion of the first cycle were Insurance Commissioner Dr Moshe Bareket, Ayalon Holdings Chairman Aharon Fogel, Ayalon CEO Arik Yogev, Insurtech Israel CEO Koby Bendalek, Capital Market Authority Chief Actuary and head of innovation Ofer Brandt, Ayalon head of innovation and human resources Roni Lichtenstein-Shani, and other seniors in the Israeli insurance and insurtech industry.
Ayalon CEO Arik Yogev: “We are currently completing a journey which started a few months ago in a world of content which is very different for someone engaged in insurance and entirely with a view to the future. We set ourselves a vision – to expose Ayalon to startups that will be developing solutions which will enable us to develop our innovation strategy. This is a pioneering initiative that will assist the Israeli insurance sector and insurtech industry”.
Yogev spoke about the need to change the ways that the insurance companies work: “As management, this is our biggest challenge, and I think that we have succeeded. We have been able to get to know brilliant entrepreneurs. Passion, combined with creativity, is the path to success”. Yogev added that Ayalon has received significant backing from the Capital Market Authority, and thanked the Commissioner, Dr Moshe Bareket.
Kobi Bendalek: “The insurance industry is one of the most important ones driving the world economy. The consumer world is changing, the customers’ needs and expectations are changing and thus the world of insurance is undergoing a transformation and significant digital and technological changes. The traditional insurance companies are in competition with other traditional companies, but also with new players who have entered the industry. This change copes with a far bigger challenge, which is carrying out the digital change. The insurtech industry is the engine for this historic change, and we, the Israeli ecosystem, are key partners in a change which is influencing the insurance industry and the world economy”.
The diffusion process
The event included two panels with the participation of seniors and experts in the field. The future of insurance panel, which was led by Kobi Bendelek, included Daniel Sharon – an analyst and expert on insurance at Miliman, Alex Zuckerman – VP Strategy and Product in the Sapiens life insurances and pension division, Yinon Dolev – CEO of the Sompo representation in Israel and Moshe Shuva of Dell.
Shuva related to the future of the insurance sector and particularly emphasized the digital channels and the end equipment that enable the insurance companies to sample the insureds. He said that Dell can act as a significant tool for distributing insurtech technologies worldwide.
Zuckerman related to the interaction between the traditional insurance companies and the insurtechs and said that often the insurtech companies do not take a share of the market but push the industry in new directions and influence the existing players. According to him a process of diffusion will take place in the long term, the traditional companies learning from the insurtechs and changing the business models and the work methods – “Insurance today is far more than the traditional insurance of risk in consideration of a premium, the world of insurance today includes service and prevention, and without technology it won’t work”.
Dolev spoke about the future of the insurance companies: “I hear no few populist opinions that the age of insurance companies has ended. This is incorrect. The technology companies and car makers are entering the field, but that is not the end of it. Our function is changing. There is a strong brand and the ability to manage risks, and this is not about to disappear”. According to him, the future of the insurance industry depends on a number of elements – the customer experience – which needs to improve, and data – “A company needs to understand that data is a resource and we need to know what to do with it, otherwise it will lose its way”, says Dolev.
Zuckerman discussed the future of the distribution channels and said: “What we are seeing is that in all the commodity areas of insurance, the insurance agent has no added value, and the brokerage is unnecessary. On the other hand, in other areas, such as life, health and commercial – there the agent is not only an intermediary, but is also a professional adviser who knows how to build coverages, and no company is able to offer this itself”.
Capital market hungry for innovation
An additional panel, led by Ronin Lichtenstein-Shani, head of innovation and human resources at Ayalon, was held with the participation of FinTLV venture capital fund founder Gil Arazi, Ido Shomroni – a partner in the Shibolet law firm, Uzi Baruch CPA – a partner in the B-summit accounting firm, and Uri Fishelson – head of the technologies search unit at Deloitte.
Arazi spoke of the ways of examining investments in insurtech, and said: “There is one thing that has not changed – the sector’s value chain, comprised of: reinsurance, an insurer and an MGA. We are seeing a lot of money thrown into the market and creating a very high level of risk. We thus examine an investment from a business point of view and ascertain whether there is not only technology but also a business model that knows how to generate earnings”.
Uzi Baruch related to the recruitment of investors from the American market and said that many entrepreneurs prefer investors from the USA, since the market is bigger there. He also spoke about the preference of entrepreneurs for investors from a known and recognized brand, but emphasized the importance of an Israeli investor to strengthen the connection with Israel.
Shomroni: “If the entrepreneur does not know how to bring in money, he needs to stop and think how to move forward. He also needs to choose his team correctly, this is not a one-time affair, but a marriage”.
Fishelson related to collaborations between insurance companies and insurtech companies: When looking at the giant technological companies such as Google, Facebook and others – they are also acquiring startups, because they understand they do not possess all of the answers. Insurance companies also need to realize that they likewise do not have all of the answers, and people can bring new business models and technologies that can boost them.
He added further that every startup needs to know how to adapt itself to the demands of the market: “The entrepreneur needs to know what he can attain and demand, and on the other hand know exactly what he can offer and how to sharpen his value proposition”.
Arazi related to two winning principles in the insurtech investments world. The first – embedded insurance, where insurance products are sold by business partners within the framework of other transactions. The other principle is in fact geographical – “Look well at Asia. This is the future of the world of insurance and all of the under-insureds there”.
Baruch spoke about the ambition of many insurtechs to work under the MGA model – a company that sells insurance but does not bear the risk, and said: “The capital market sees a number of types of companies with innovative business models and has accepted them. This model is innovative, but the market is thirsty and hungry for innovation, and there are a number of Israeli companies, especially in the MGA format, that are growing at a crazy rate and are on the way to IPO. The American capital market will receive them, because it is thirsty for innovative business models”.
Don’t think about the exit
Ayalon Holdings Chairman Aharon Fogel, gave a number of tips to entrepreneurs and said that it is forbidden to think that sales will grow fast. He also said that entrepreneurs should not think about the exit – “This is one of the biggest enemies of startups”. According to him, a new economic market is being created, but it cannot work without the principles of the old economy. On the other hand, he said, the old economy cannot operate without the developing new economy.
