WTW's Doddington: Insurtechs struggle to balance innovation and expertise

By Mia MacGregor

June 18 - (The Insurer) - Emerging technologies have fuelled high expectations and a surge of insurtech startups, posing challenges for newer ventures lacking a strong foundation in underwriting and insurance, while legacy insurtechs struggle to keep pace with innovation, according to Laura Doddington, head of personal and commercial lines at WTW’s North America insurance consulting and technology business.

The adoption of emerging technologies such as AI tools aims to reduce costs and enhance speed, efficiency, and personalisation. However, Doddington warned that such potential is accompanied by significant challenges.

She noted that many new insurtech startups are heavily tech-focused but often lack robust underwriting expertise and comprehensive risk data.

"In these organisations, you might build brilliant technology and customer journeys, making it easy for customers to purchase insurance and file claims. But without solid insurance foundations, your business is not going to perform very well despite the glossy appeal," she explained.

Conversely, Doddington highlighted the struggles of legacy organisations eager to adopt AI yet slow to innovate.

"They know insurance well but find it hard to integrate new technologies due to layers of governance and risk management processes. The challenge is that while they understand insurance, they are slow to actually embrace these new innovations, so neither of those scenarios are ideal," she said.

Doddington believes success lies in balancing innovation with foundational insurance expertise.

"The winners will be those who can do the best of both worlds,” she said. “Those who have the foundational experience from being a legacy, but can manage to become more innovative, faster and agile. That's quite a hard trick to pull off.”

Doddington highlighted the importance of maintaining insurance foundations alongside innovative customer experiences.

"In a digital world, if you're not thinking about things like anti-selection and fraud prevention, it can affect you significantly in this space, much more so than it might in other industries," she said. "The key learning is not to underestimate the importance of insurance risk management even when pursuing new technology.”