Fintech Innovation Lab
I write this post every year because I think this is a great program.
Fintech Innovation Lab NYC is a business accelerator program that works with the largest financial services companies here in NYC to support emerging fintech companies and the founders who start them to get their companies off the ground.
This year, the lab is making a big push into insurance with a special track for entrepreneurs/companies that service the insurance market.
Here is the blurb they sent me this week to announce the kick off of their next program which will take place in the first half of 2018:
We’re looking for entrepreneurs developing disruptive, pioneering enterprise technologies for the financial services and insurance sectors. As part of the 12-week program co-founded by Accenture and the Partnership Fund for New York City, fintech companies selected by senior executives of the world’s leading financial services firms will receive mentorship that accelerates product and business development.
The participating financial institutions and insurance providers include: AB, AIG, Alight Solutions, Ally, Amalgamated Bank, American Express, AQR Capital Management, Bank of America, Barclays, BlackRock, BNY Mellon, Capital One, CIT Group, Citi, Credit Suisse, D.E. Shaw, Deutsche Bank, Fidelity Investments, Goldman Sachs, Guardian Life Insurance, JPMorgan Chase & Co., KeyBank, Marsh & McLennan, Mastercard, MetLife, Morgan Stanley, New York Life Insurance, Pitney Bowes, Rabobank, RBC Capital Markets, Scotiabank, Synchrony Financial, TIAA, The Hartford, UBS, U.S. Bank, Wells Fargo, XL Catlin and Zurich Insurance.
We are holding an information session on Wednesday, November 8, 2017 from 5:30 – 6:30 PM for any companies interested in learning more about the program. For additional information on the Lab, please have the companies contact us at [email protected].
It’s interesting that disrupting Insurance is a focus.Some of the most promising blockchain initiatives I’m seeing right now are insuretech. There are a few consortiums emerging now around this too. And I could name a few super promising companies that look like winners.I’d wonder if this fintech innovation lab, which does indeed have a great history, will want to push their cohort to radically embrace blockchain models, or not.
innovation and insurance. that’s an odd couple.
you are just feeding any good marketing guy on this, with that line ;)Special mention goes to a co called Etherisc https://etherisc.com/They spoke at our Crypto Explorers events, and it sounds very promising.
i would have been there, but circumstances kept me at a distance.
sign up for future events at https://CryptoExplorers.orgas blogged about on AVC.com 😉
but i’m Linkedout, and Twitter has become noise over signal.
But quite interesting! Besides Etherisc, there will be 10 hand-picked #blockchain4insurance startups presenting (and vying for top prize of $100k) at the Blockchain Summit in a few weeks – http://www.blockchainsummit.ch
https://blockchainsummit.ch/“initial coffee offering” – that’s funny….and William will be speaking.
I will be there too! Representing CryptoExplorers.orgLooking forward to it.
is this new branding?
new since Fred’s post on our initial Crypto Valley Trip. We are doing these in other places, such as Dubai and Oman next week, so needed a more global name.
Not really if you know the underpinnings of re-insurance and insurance back offices. There is a new reg in Europe that is making it’s way into insurance, GRESB. If you are an insurance company and raise money from an EU pension fund, you have to follow GRESB. One of our portfolio companies that uses big data in commercial real estate transactions is GRESB compliant (megalytics.net). Equifax was not.
It’ll be the companies who create the best products and stand behind that product who then provide an insurance option that will beat out all other 3rd-party insurance company offers.
that’s always the weak link with insurance. evasion has become an art form like no other.
Blockchain has tremendous promise, and the carriers we work with are paying close attention. However, startups need to be careful about how and why they decide to build their solution on, or adjoined to, a blockchain technology. We’ve seen several startups use blockchain in their application when there really wasn’t a need to.
Why does blockchain have tremendous promise with insurance though? Is it the idea of a public immutable ledger so tracking and prediction is possible? I’m curious what the main talking points are if you can share – thanks.
Part of it is the promise of reconciling data across multiple parties. An example: pretend you are hosting a one-time, outdoor event and want to buy a policy that covers you from bad weather. The policy is $10K, sold for $250. The time it takes to sell, underwrite and issue the policy reduces the margin (for the carrier/broker/agent) on such a policy. A blockchain-like technology can do those tasks and becomes important in processing a claim (check weather data for the date of the policy; process claim; policy holder paid automatically (benefit!) ). Could this process be built on a relational database? Yes, but an immutable ledger removes human error and human delays — hopefully fraud as well. There are more examples when you dig into reinsurance and how those processes work. Hope that helps!
.Property, title, conveyance, financing, ownership, insurance, utility service — all occur at the same physical location and change constantly.The blockchain would appear to be a perfect way to consolidate all that information while using it to build upon for the future.When you convey a property, you have to provide an assurance that the title is vested in the seller. If there is debt, the lender will require a clean conveyance, a clean payoff, a release of lien, a clean title, a property inspection, a credit report, and insurance.Every time a property is conveyed, this starts over again. Typically, every county in the US has a title insurance company owned “title plant” which allows the title to be updated from the latest conveyance. This is privately owned and is, usually, a coop.It would be perfect if all this info was consolidated in one place such that a new lender or insurance company could access the historic loans and insurance policies as well as a property condition report.It is so logical and would consolidate and streamline a lot of stuff that is a major league pain in the butt. The information would be tethered to the property rather than the owner.It would create meaningful efficiencies and resultant economies.JLMwww.themusingsofthebigredca…
Is the idea of blockchain really just tricking competing businesses into using the same public immutable database, so a person’s data is easily mobile to a competitor? One of the biggest barriers to switching to a competitor for businesses is the effort required in trying to gather and move everything. I wonder if most people excited about blockchain understand this …
.I have been with USAA for almost 50 years. Yeah, moving one’s personal business is a pain in the butt.Also, big mutuals like USAA have a profit sharing feature which accrues over time and accrues at a faster and more generous rate after 20 years. It amounts to about 20% of my annual auto, property, watercraft, liability premiums.Blockchain is going to have to make it possible to make the info transportable with no headache.If you think of the Obamacare debacle, one of the big missed opportunities was inter-state competition and transportable info and policies.JLMwww.themusingsofthebigredca…
One thing to consider w/ blockchain: it doesn’t necessarily have to public. Take some time to look into “smart contracts” and you can see how a non-public blockchain still has value.
Isn’t the only way to disrupt insurance to build a better/more efficient system, then knowing the costs can offer something that competes with all other offerings, e.g. Tesla? Vehicle manufacturers aren’t going to be able to compete with Tesla unless they offer all of the same offerings as Tesla. Tesla likewise should create a smartphone to provide even more utility in a packaged deal; they already launched (?) a music service.99.9999999999999% have no idea how much disruption and efficiency Elon’s unleashed – and he’s so deeply heartfelt. In a recent interview relating to Australia’s power supply, the part I’m referencing starting at https://youtu.be/fI2vgSHSXI… – where at 12:45 Musk responds “We’ll work harder.” I want to give that man a big hug.
.Tesla promised 20,000 Model 3s per month by December 2017. They made fewer than 250 units in Q3 — three months.They have almost 500,000 orders on the books, so they are only hurting themselves.Tesla is long on promise and short on performance. Elon Musk is my favorite salesman. He is a visionary, but he can’t make the factories work.Meanwhile, guys like GM and Ford are knocking out 7,000,000 cars per year of multiple models on multiple continents while their market cap is less than Tesla’s.There is a big day of reckoning coming.JLMwww.themusingsofthebigredca…
Comparing Tesla with GM and Ford is apples and oranges – other than they are both fruit.Tesla’s doing really amazingly and as they get the kinks worked out, all of the efficiencies Elon has developed will come together and the speed of exponential growth of Tesla and other services/products of his will outpace everyone else.Your doomsday mongering needs some stronger arguments behind it. Elon’s well aware of the time passing, however everyone is likely to have the same barrier to entries as he and Tesla have had. And why not bring up that GM and Ford don’t have reusable rocket company or a solar energy company or? Let alone not mentioning and bringing in for comparison that GM and Ford have each been doing this for literally over a century?Elon’s been lining up dominoes, expanding their product lines, completely disrupting all facets of transport. They will earn money off of congested roads with The Boring Company technology, they will disrupt airlines and cargo transport between major cities with Hyperloop technology, and the list goes on.If their market cap is higher than GM’s and Ford’s it’s because Elon’s focused on the future and is aligned with it – and people know it, they know he’s at the lead, and he’s clearly capable. They believe in him – and there are countless hard proof points to back those beliefs up regardless of cherrypicking a delayed deadline for the number of a specific product to be manufactured.
.Just calling balls and strikes, but you seem to be swimming in the koolaid. Looks like the back stroke to me.Today, in its earnings call, Tesla moved the Dec 20,000 cars per month target to the end of Q1-2018, a three month bust. They only produced 222 Model 3’s in the entire quarter and they’re going to be making 20K per month in 5 months?Tesla had first mover advantage, but squandered it. Others, for whom making a car in quantity is a challenge they have long since mastered, are getting into the electric car biz.Seems like everyone is and they all have bigger balance sheets, deeper pockets, while Tesla is still worrying how to meet payroll next month.Names like Mercedes, Jaguar, Volvo, GM, Ford already have a long list of existing luxury customers, national dealership networks, and maintenance system networks while Tesla is still trying to hit its own projections on production.Tesla has failed to hit every single production hurdle — self-generated — since its launch.I think the solar deal, which Musk folded into the Tesla corpus, is a big bust. On the verge of failure, it was a port in a storm. Hard to see how reusable rockets drive car sales, but I could be wrong.I can’t imagine any auto competitor cares if Tesla is making solar panels or roofs or reusable rockets. There is a bit of “stay in your lane” and try to make your lane profitable at work here.What happens when Tesla blows through 200,000 cars and all the subsidies peel off? Guys like Ford and GM make 200,000 cars in a month.Gravity is going to exert itself and Elon Musk will be ground bound again. Maybe he’ll take a trip to Mars.JLMwww.themusingsofthebigredca…
Elon’s not playing baseball, he’s making a new game – so strikes and balls aren’t applicable; the scale and synergy between the disruptions he is creating is bigger than anyone has done before.3 months – Oh no, the sky is falling.. That’s a weak argument to put forward for your strongest argument.Squandered their first mover advantage? Laughable. How many pre-orders did you say they have? What other companies have that many pre-orders?Once again, you’re comparing traditional vehicle manufacturing ecosystem to what Tesla has been evolving for a decade – mechanic and repairs wise, Tesla charging station network, etc. You boast things like dealership networks of competitors as a positive thing, they are not – they’re a revenue/profit leak.Re: Solar – If someone buys an electric vehicle, you don’t see the advantage of the company being able to upsell a solar panel roofing system, along with battery storage like the Tesla Powerwall? Maybe you’re missing these points because you need to read up and understand what Tesla is actually offering?Tesla and SpaceX and his other companies have synergistic value because of the pooled and shared expertise – and when SpaceX builds a colony on Mars (let’s forget about the global internet network SpaceX will be launching for now and the revenues that will lead to) – who’s electric technology is SpaceX going to be using? When possible they’re going to use Tesla vehicles, Tesla batteries – or the technology and expertise – etc.Clearly we have a different perspective at the moment.
.Umpires call balls and strikes, not players.Tesla is an auto manufacturing company whose biggest problem is its inability to MANAFUCTURE cars.That is sort of a big thing when you cannot execute your core competency.They have issued guidance and have routinely failed to meet it. After years of failing to meet their own targets, they continue to fail to meet their own guidance.They are bad at both providing guidance and manufacturing.In an unfettered market, their cars were and are fine. They have garnered almost 500K in Model 3 pre-orders. At the rate they are producing now, it will take 400+ years to fulfill those orders.At the rate they intend to produce — another bit of guidance — it will take 3 years to fulfill these orders.In that period of time, Mercedes, Volvo, BMW, Jaguar, GM, Ford — all of whom have announced EVs — will be up and running.These competitors will have broad product offerings while Tesla will continue to have 3-4 models.These competitors have established dealer networks. You seem to be unaware that Tesla has tried to go around the dealer network legal requirements in every major state — unsuccessfully.Tesla cannot have a sales network in Texas. They have a showroom, but you cannot buy a car at that showroom. You have to deal with Tesla online.Tesla is running out of cash — again. It has less than five quarters of cash on hand. Their competitors have strong cash flows and balance sheets.What sales force is going to be competent to sell cars, solar, solar roofs, Powerwall, and a trip to Mars? Why would someone looking for an EV want to be upsold to replace their roof?If the long term plan is to colonize Mars, I think it may be a pretty tight fit to make that work. Could be wrong. Never been to Mars.As a company, Tesla has classic product design, manufacturing, delivery, maintenance, operational, pricing, warranty, finance, and competition problems. To win, they have to run the table against companies who have this stuff in their wheelhouses and can do this stuff in their sleep.Seems like a fantasy about to get a big dose of reality.JLMwww.themusingsofthebigredca…
We have had a few blockchain companies in the FinTech Innovation Lab over the years and some of them have successfully worked with our insurance partners to collaborate on use cases. The insurtech track this year is to build on that and help companies building insurance specific solutions to collaborate with our insurance partners (AIG, Guardian Life, Marsh & McLennan, NY Life, MetLife, The Hartford, XL Catlin, Zurich and a few others that we will be announcing soon). If you are in New York on Nov. 8th, welcome to join the panel discussion on the lab to learn more bit.ly/FILInfoSession1182017
sounds good. I’ll be far from NY then, but look fwd to future events.
(promotional plug) The Global Insurance Accelerator will start its 4th cohort in January. We are solely focused on insurance, based in an insurance hub (~60 insurance companies hq’d in DSM). Our investors are all insurance companies; 160+ insurance professionals serving as mentors. If you are building an insurance solution, or one that can be applied to insurance, cohort applications are open until EOD Nov-02.
This is a great accelerator that we work with. Highly encourage you to check them out if you are doing InsureTech.
Do you have to be based in NYC? Our solution is focused on cyber insurance.
Our startups come to us from all over the world; our program does have a residency requirement (to be in Des Moines) during the 100 program. Business travel is encouraged and 2 breaks are built in. Details are here, http://www.insaccel.com
What about ecosystems who can provide insurance as part of the system? E.g. Tesla is basically an electric/energy solutions company that provides vehicles and other related products and services, and will dominate the insurance industry for vehicles and other because they have greatly reduced the costs and know the costs clearly; they also control the profit margin on vehicles and can reduce that if they needed to compete against 3rd-party insurance offers – packaged with products from their whole ecosystem, no one will be able to compete with them unless they have all of the same offerings and do nearly as good of a job with the quality of products and services.Doesn’t it make most sense to invest in ecosystems/platforms/companies that will have offerings that can add insurance as a feature that supports their ecosystem and their consumers?
Yes, and the ecosystem approaches are some of my favorite solutions because they are so creative. Pablow, from our 2015 cohort, helps VRBO sell travel insurance at the time of booking. RE-Sure, from 2017, helps bike share companies bind an insurance product with the bike rental. Keep in mind, even with these solutions (and your Tesla example), there is still traditional “insurance” involved – capital/paper, claims, etc. What examples like ecosystems these do is either cut out or supplement the underwriting process because they have better/more data.
Thanks Brian. I run the day to day of the FinTech Innovation Lab including our insurtech track on behalf of the Partnership Fund for New York City. Would be happy to connect and discuss ways to collaborate. My email is [email protected]
Thanks for posting I will be there.
.Events like this are a perfect collision of the legacy infrastructure and the future.What is important to note is that the legacy infrastructure is not going to let anyone build a better system without their getting a chance to either snatch it (legally) or to see it coming so they can deepen and widen their moat.In many ways, it is a coop between the fox and the hens.It beats the naivete out of those who think the legacy infrastructure is going to sit dumbly by and give up their franchise.It is a good thing.JLMwww.themusingsofthebigredca…
Agree. The new players that are trying to replace the large legacy systems (policy mgmt, agency mgmt) have a huge challenge ahead that will require very, very long sales cycles. The shorter-term winners will be the companies that can partner with or bolt-onto the legacy platforms to help them compete. That’s not anything new when it comes to enterprise sales — however, if I have a point, it is for startups to seriously consider the lab/accelerator programs that bring them closer to the carriers and overall insurance ecosystem. I’ve seen plenty well-funded startups who have -0- customers and struggle to gain traction.
.Agreeing more with you than you do with yourself.There are some interesting anecdotes out there. As an example, USAA Insurance of San Antonio (used to be exclusively military officers and is now broadened) which is a mutual with incredible financial strength and depth, has gone into the venture capital business.At first, it was hard to get an idea of what their focus was — and, maybe, they didn’t know. Now, they clearly are in the fintech (they are also a bank and a brokerage as well as all forms of insurance) space.They were run forever by retired Generals and, just recently, have been run by the first non-military guy in its history.I do not consider them to be a very adventurous enterprise, but they will do whatever serves their clients. My personal dealings with them are the most satisfying insurance claims I have ever been involved with.There is no question they are considering any “bolt on” tech they can. Their business totally at arms length, so they have to be able to operate remotely and through the Internet.JLMwww.themusingsofthebigredca…
Once I gave a talk at the IDA — Institute for Defense Analysis, smarts for the Joint Chiefs. My talk was on my stuff in multi-variate, distribution-free statistical hypothesis tests — I have a big collection of those and likely and apparently so far the only collection at all.Well, some in the audience suggested that my work could be used for credit card fraud.Well, my work could also be used for national security early warning!I developed the work for detecting problems never seen before, “zero day” problems, when monitoring health and wellness for high end computer systems and networks. Well, those qualify as complex systems, and my work remains the best for looking for problems never seen before in complex systems.So, sure, my work should be good for looking for “bad” risks in the insurance industry.All that said, my conclusion is that there is no way, not a chance, that anyone in US business could ever see the value in such work. Not a chance. No way. They’d rather upchuck first.IMHO, all such efforts that claim to look for better technology are just efforts at political posturing and pocket pool. In fact, no way would any such groups actually try to do anything technical. Not a chance. Meet and greet? Get out of the office? Have fun? Posture? Sure. Actually do any real work actually to get involved in anything actually new, technical, significant, and better, not a chance. Instead, it’s all just innovation theater.I published my work in Information Sciences. The work is still there, on the shelves of the research libraries. If someone reads the paper and starts to understand it, then they will see the need for a fast algorithm, and I invented one of those, not in the paper. If they want the algorithm or a tutorial on how to read the paper, they can call. The work is right there in the library. Can order up a copy on-line. No travel to Iowa, Silicon Valley, NYC, etc. required.But, no one has ever called. Tells you something: The actual technology is not what what such “accelerator” efforts are about. So, they must be about something else. So, as usual, the guess is that they are just social and political, not technical.So, I’d rather do my startup where the politics are essentially zero and all I have to do is bring up a Web site that gets lots of traffic; there my approach is to please a lot of people. No posturing, theater, politics involved.
When it comes to consumer insurance, all of the big guys have been active investors in direct-to-consumer sites (via their internal venture finds). Commercial is going much slower because of the broker relationships. The big insurance companies are still figuring out cyber insurance at many levels.
I have a friend who is a small center insurance broker. His son replaced his retiring partner and pushed hard into online, as a supporting tool for brokers (kid is smart).They are growing like crazy, son is pushing culture of growth and it is common for their people to have 2000 accounts.20 years ago I told people that the internet was simple: it let really good individuals do way more business and it let really good big companies handle way more details.Crappy businesses get almost no benefit from the web though.
Houston tried something similar with SURGE – a partnership between Oil & Gas and tech startups – but it failed. On paper, it was perfect. In reality, E&P requires a large cap and very long time horizon for investments. Not suitable for rapid tech innovation.
.True, but oil & gas has been a tech user for decades. What goes on at the bottom of a drill bit today is so much different than 40 years ago.Today, Schlumberger can tell you which way the oil is flowing in the width of a drill bit at 10,000′.Did I mention 3D seismology?JLMwww.themusingsofthebigredca…
I agree 100%. It was strange that this deal failed. Not sure about all the details. (And my first job out of college was working on down hole tools for SLB – so I get it.)
Somewhere along the line “tech” became IT it seems. Is there any industry more tech than Oil and Gas?
Yes, what’s underground stuff was one of the big, eager users of the fast Fourier transform. E.g., hit the ground with a big hammer, and sound waves go down. At each change in density, some waves get transmitted and some, reflected. So, what comes back to the surface is a tricky convolution of the original pulse. So, want to do deconvolution. Well, the fast way to do that is with the Fourier transform, and the fast way to do that is with the fast Fourier transform. It was hot stuff for a while. But, sure, there are techniques, maybe Radon transform, for also getting 3D images!
Both have been running computers for ever. Tough business but great to see possible disruption as it his the consumer. O&G…….my earliest memory was carrying punch cards for my Dad to run on the mainframe IBM360 for Sunoco, to model what to pay for oil fields.
I might have added my bitcoin public key to the nametags, to make the gift giving process that little bit more fluid. More wine anyone?
CONTRIBUTORS:There are some “participating financial institutions” mentioned who were directly involved in the financial meltdown. It appears they have been washed clean.All is forgiven and forgotten.Captain Obvious!
There are now so many insurtech / fintech innovation labs and incubator around the world managed by VC’s, large insurance companies and vendors.Is the innovation activity producing best of the class technology, products or services in the long term (i.e. not just another new legacy ecosystem)?Or is the purpose of this activity to only produce high valuation companies for exits (500 startups et al)?Hard balance to manage.Where is this race going to end up.All comments very welcome.