Insurtech Israel’s CEO’s vision of the future of the ecosystem
We interviewed InsurTech Israel CEO Kobi Bendelak, who has over 22 years of experience in the insurance sector. We spoke with him about innovation in the insurtech sector and Israel’s role in this ecosystem.
At MAPFRE, we innovate for a better present that will lead to the future we deserve.
Bendelak is the GM at InsurTech Israel, which was created to promote and lead the Israeli Insurtech ecosystem. The company has four areas of activity, and he explains in detail how they work and how they help startups develop their businesses in this fast-changing yet innovative sector.
The first thing is to understand what an insurtech is. As defined in the MAPFRE Open Innovation (MOi) dictionary, insurtech is used to denote the application of the capabilities of new technologies to the insurance sector. Participants in the insurtech ecosystem include insurance companies, technology giants, startups, professional insurance agents and brokers, and networks of customer service providers. In our case, we consider this entire broad spectrum when developing our new innovative proposals.
The disruption of these startups in the insurance sector has driven the incorporation of technologies such as big data, blockchain, and artificial intelligence (AI) to completely transform the industry and its entire value chain. But how do you give impetus to all these startups and entrepreneurs in the ecosystem? At Insurtech Israel, they share their point of view and explain their intense work in this field.
In a nutshell, what is InsurTech Israel, and what kind of projects does it fund?
InsurTech Israel is the leader of the insurtech ecosystem in Israel. We are based in Tel Aviv and operate on four pillars.
The first pillar is investment. So, basically, our main activity is investing in Israeli insurtech startups. The second pillar is Biz Dev (business development), which focuses on consulting with insurers, venture capital firms, and insurtech startups globally. We are helping Israeli insurtechs by refining and marketing their products in countries around the world. We help entrepreneurs define their value proposition, understand their product’s target workflow, evaluate potential cases for commercial use, and analyze their target markets.
People from all over the world are very interested in the Israeli insurtech ecosystem and technology. The Israeli insurtech ecosystem is a community of about 200 startups. To connect interests in terms of exposure on both sides, we have created the “News & Media” section.
The third pillar is media activities, a media section that has launched a global tour to present the Israeli insurtech ecosystem. This is achieved through events, a weekly newsletter focusing on our members’ activities, a popular podcast, member spotlighting, intellectual leadership contributions, and the news website. We have many activities to introduce startups worldwide: roundtables, conferences, delegations, and so on. These activities are an excellent tool for connecting with potential customers and investors.
The fourth pillar is the accelerator program, thanks to several outstanding international global insurtech partners such as Deloitte, Microsoft, and many others. It is the largest insurtech accelerator in Israel. The Israeli Insurtech Accelerator (IIA) focuses on helping startups and insurtech firms that want to become part of this sector. The chosen startups and other companies will participate in a unique ten-week customized program to present their organization to leading figures in the insurance and insurtech world, from Tel Aviv to the world’s largest markets. The Global Insurance Accelerator is a business accelerator conceived as a mentorship that aims to foster innovation in the insurance industry and supports startups targeting the international insurance sector.
IIA’s startups create tools to support the insurance community. We offer funding, guidance and networking, working side by side with an international team of mentors, with the strong support of our important partners: Brokertech Venture, InsurTech Israel and a wide range of collaborators such as Microsoft, Dell, Sompo Insurance, Milliman, Deloitte Sapiens, and others. Our accelerator’s exclusive partners help us introduce new local startups to leading players and investors in the insurance world. The accelerator aims to meet the needs of local businesses targeting the international market. So, these four pillars make us very competitive in Israel.
What role do insurtech companies play in making insurance accessible to all layers of society?
The insurtech sector is an essential tool in accelerating the changes that the insurance industry needs in a new and developed financial market. The insurance industry must not lag behind what customers are asking for and need. Because of all these changes, insurers have realized, especially in the time of COVID, that they need to progress with technology and tools that will help them work differently. The approach of the startups and the industry is to support them, especially with excellent technology and great solutions. So, the insurtech sector is one of the biggest and best in the world because it is helping insurers grow and shape the change that will materialize in the coming years.
What technological tools do you think insurers have been acquiring lately?
The focus has been on the digitalization process. They have implemented software and technologies that help them digitalize to find new ways of engaging with customers. So, that’s the criteria, and that’s what we’ve seen so far. But in the next few years, we will witness a different movement thanks to the use of technology: insurtech 2.0 generations. Once insurers have gone digital and have digitalized their processes, they will be able to use data, customer relationships will be more agile, and underwriting will be faster and more accurate.
Services will be easy and direct with customers. The claims process will be fast and higher quality in the coming years. There will be more different insurance products on the market that we are not seeing now, a product tailored to customers, different types of coverages, different types of policies. We will see a different type of product and service, and the benefits for insurers will be even greater.
What would you say is the biggest challenge for insurtech in the coming years? What innovations are we going to see?
Insurtech covers two types of startups: B2B (business-to-business) and B2C (business-to-consumer). The challenge for B2B is to change the mindset of the entire insurance industry. Insurers know how to accept risks, but they don’t like to take risks they are unfamiliar with, and working with insurtech is a risk they don’t know much about. So, they will need to change their mindset to be open to changes.
The new challenge for B2Bs is to convince them that the risk they are accepting by adopting new technology is bearable and, based on that, the insurer will be helped to sell more products and deepen relationships.
For B2C insurtech startups, the challenge is somewhat different because, at this point, most people are loyal to insurers. The insurance industry is built on trust, and if there is a relationship with an insurer and you have built a relationship of trust, it will be very difficult to make a decision and change the way you use it or change insurers. So, the challenge for B2Cs is to build trust with customers. As long as they build that trust, they will be able to grow.
That’s because the insurance industry has sorted itself out. It has a considerable amount of data. It has achieved the goal of sorting through the data, and now it can learn a lot about the data to do better underwriting, give better service and connect better with customers. So, we will see many underwriting and prevention tools.
These innovations will help us know more and be better. Based on that, there will be many tools: new health insurance, weather tools that will help with prevention and better underwriting of risks, as well as many wellness and health tools, new AI-based tools, and so on.
You have already invested in four insurtech startups. Can you tell us a bit more about each?
We have some good investments that give you an idea of what the insurtech sector is like in Israel. First there is Ravin.Ai, which can easily provide assistance for auto damage and close auto claims in a few seconds. It’s a terrific tool for insurers.
The second emerging tool we really like is Five Sigma. This is an AI and services tool that can help customers manage claims and process them in a simpler and smarter way.
The third one is called Healthee, which is a tool that can read the health insurance policy and sort through all the coverages. It provides a good service while using it. So, if you have any health-related need, you can ask Healthee, and it will offer all the information about the insurance coverages and all the fastest solutions to manage it. It will help when making an appointment or buying medicines. Everything is managed automatically.
Last but not least, the fourth is Emnotion, a great technology that can help in critical weather situations six months in advance, knowing if after that time there is going to be a significant amount of snow or a flood. It can help the insurance industry anticipate and prevent. That’s a small summary of 4 of the 15 we have. There are many excellent tools and more to come!
What role does Israel play as a country in innovation?
Many people say that Israel is one of the insurtech capitals of the world, and because there are many startups and we have many great success stories in our ecosystem, you can find excellent companies that started here, like Lemonade or Hippo. All these fantastic companies are Israeli insurtech startups. We have great success here, and we can say that Israel, along with other countries, leads the insurtech sector.
Why does innovation stand out more in this country than in the rest? What are the ingredients in this recipe?
In this recipe, the entrepreneurs are the main ingredient, as they have considerable ambition and get involved. The people are the core of the recipe, and, of course, there have been some great success stories that have driven these entrepreneurs to focus on insurtech solutions. With good entrepreneurs, capital and success stories, we already have the recipe for great achievements in the ecosystem. And also because Israel is a “startup country” and helps these companies find good infrastructure to get going.
The insurance industry needs changes to update itself and adapt to new social needs, making use of new technologies to improve its services, become more efficient and, in short, reinvent itself. Innovation is helping our clients achieve their goals, offering an agile, friendly, human, and quality experience. In short, at MAPFRE, we innovate for a better present that will lead to the future we deserve.