Human progress is defined by the desire to take risk — whether that’s getting married, buying a home, having kids, getting on a plane, taking a new job, even moving to earthquake country (where this talk originally took place, in Los Angeles, as part of the a16z Summit 2018).
All of these decisions require evaluation under conditions of uncertainty, which is where insurance — really, distributed risk — comes in. So, in this talk, a16z general partner Angela Strange describes how pooling risk changes as we reinvent a legacy business like insurance through technology. What’s the impact at an individual, industry, and economy level? And how will new entrants finally disrupt the ultimate game of life?
When I was thinking about buying life insurance, I saw HealthIQ advertising better rates for fit people on the MyFitnessPal app where I record all of my exercise and everything I eat.
That process is what I credit with controlling my seesaw weight over the last couple of years and I highly recommend the regimen for anyone with similar difficulties with their weight. I found that by being honest with myself and recording everything I ate, I naturally began to make better decisions; plus, I like the charts.
Insurance is a massive global business sector which has been immune to the market forces of technological revolution to date. That is now changing.
Social media is making it easier to find people. Technology and data abundance are changing how risk and pooling is calculated, while claims processing is changing.
For new companies, deploying best in class technology, the market potential is impressive. Meanwhile the established companies are very heavily overweight in bonds and at substantial risk from the potential for downgrades or a higher default risk.
The MSCI Global Insurance Index has been ranging below 120 since 1999 and has been pulling back from that area since early 2018. An unwinding of the short-term oversold condition is currently underway but a break in the sequence of lower rally highs will be required to question the medium-term downward bias.