Since the sectors inception approximately a decade ago, there are now thousands of insurtechs worldwide. Many of which are maturing into larger businesses with increasingly complex strategic and operational concerns. As they’re entering often literally new territory, they’re encountering growing pains in:
IPO strategy |
| Financial reporting and accounting policy |
| Taxation |
| Compliance |
| Internal controls |
Insurtechs typically don’t focus on compliance when they’re just starting up because of their limited market involvement and exposure. However, as they become more deeply involved in the business of insurance and need to remain in the good graces of regulators and customers, they face increasing responsibilities in regulatory compliance and corporate compliance.
Demonstrating an understanding of operational complexities and establishing sound controls helps reduce risk and build investor and customer trust. It’s essential for insurtechs to determine early in the maturity cycle - well before an IPO - who’s accountable for identifying these risks and designing appropriate controls over them. Being proactive will help them meet external compliance requests, avoid expensive retrofits and promote a high performing culture.
Moreover, not least because of the statutory rules and regulations unique to the industry, insurance has several characteristics that technology entrepreneurs and investors often don’t anticipate.
Knowing how to respond to these challenges should be at the top of insurtechs’ growth agenda, especially as they prepare to go public. Here are some perspectives to help executives prepare accordingly.
