The golden ticket to success in the insurtech space might be a focus on data, based on the insurance industrys needs and insurance clients demands. Take it from one executive, who spoke with Insurance Business at InsureTech Connect (ITC) in Las Vegas and revealed where hes seeing technology companies bring the most value to insurance.

In insurance, data is fundamental to what we do in terms of assessing risk and pricing, and theres been an awful lot thats gone on with regards to data, particularly as it applies to commercial insurance, said Sean Ringsted (pictured), executive vice president, chief digital officer, and chief risk officer forChubbGroup, pointing to the small business segment that has been traditionally underserved by insurance. You have a growing number of small businesses and if you think about an entrepreneur or a start-up, they dont have much time, cash flow is important, and they want to be able to buy that policy and get it wrapped up quickly. That is really driving a lot of the innovations and advancements around the use of data.

Simplifying the customer experience is likewise important, especially when it comes to small businesses. Asking only five underwriting questions of a florist or a new online clothing store relies on having a solid foundation of data to work with.

The customer experience becomes very important being able to explain in plain English the type of coverages that you should have from a regulatory point of view, said Ringsted. We think of cyber, as an example. Most of these businesses are probably unaware or underinsured with regards to cyber, [but] they store personally identifiable information or they may use an outside service for payroll. Packaging all of that up and explaining it to the small business, that is [also] driving, I think, a lot of innovation.

Read more: Local authorities fighting off hundreds of cyberattacks every hour - report

Walking around ITC 2019, the sheer number of insurtech booths was overwhelming to many insurance experts. However, Ringsted offered up insight on Chubbs approach to sorting through the many technology offerings today.

Were thoughtful [and] we know the type of problems that were looking to solve, and then what solutions are out there that we can bring to bear on that, he told Insurance Business. Theres a lot of competition out there, and weve not sought a blanket investment approach to insurtech. Weve got a number of investments that weve announced, but theyve been done in a thoughtful way with partners that weve worked with that we think are worth backing further.

There are nonetheless still challenges in navigating a packed insurtech marketplace and identifying the technology trends that incumbents can actually apply in their day-to-day processes.

Read more: Willis Towers Watson: Insurtech investment remains buoyant in Q2

I would describe it as that last operational mile. Some of these concepts around the use of data and artificial intelligence, I think everyone gets that high-level concept, but when you actually want to apply it and practice it, at the end of the day theres a lot of work to take that and apply that to the business, said Ringsted.

You can talk about machine learning as a concept, but to actually make that operational, you have to go through and label all your data, and that is such hard work and it takes time. If you think about IoT, you have to now install that device, say in a hospital, so you have to put it behind drywall, for example, [and think about] how youre going to connect that up to systems. How do you think about data security, how do you think about privacy? Theres a lot that has to happen to make these things operational, and all of that is a breaker on speed.

Traditional insurers, as well as MGAs and brokerages, can, however, do a few things to best position themselves for long-term success in this technology-driven marketplace.

I think having a very clear understanding of your customer base and their needs, and then making sure that as an organisation you are organised around those needs with technology [is important], recommended Ringsted. I think it starts there, and then you can figure out how you deliver that, whether thats an internal model or using insurtech.

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Why a 'blanket investment approach' to technology isn't the way forward - Insurance Business UK