Insurtech: A shield and a sword - when IP and insurance combine

Traditionally regarded as slow-moving and reluctant to use new technologies, the insurance industry is now gearing up for change. As disruptors move into the marketplace and technologies develop at breakneck speed, the industry has realised that innovation is the key to survival.

"The presence of a patent is likely to deter egregious wouldbe infringers." - Alexander Urbelis,
Blackstone Law Group

While insurers and brokers are quite innovative, they are more cautious than other financial sectors about publicly embracing technologies with unproven track records, says Alexander Urbelis, partner at Blackstone Law Group in New York.

“By contrast, the financial sector is expected to move at the pace of a great white shark, always hunting and moving in search of the most fertile feeding grounds. To stick with the marine biology metaphor, insurance companies are expected to operate with a speed more akin to that of a blue whale,” he claims.

Below the calm surface, however, is a rip tide of activity, with insurers and brokers testing, investigating and innovating, although, given the nature of the industry, they keep quiet about the innovation until tangible results are possible, Urbelis says. He warns that this may delay the patent application process, causing insurers to appear as though they are trailing behind other industries.

James Cooke, special counsel at Duane Morris in Washington, DC agrees. He notes that previously, many insurers and brokers embraced traditional underwriting processes and personal broker-to-customer interaction. This embrace likely contributed to a delay in transitioning to automated processing and mobile engagement, when compared to the transition from branch to mobile banking across the financial services industry.