7 Tips for Start-ups Partnering with Incumbent Insurers: Trōv Founder Walchek

Trōv is a tech start-up that’s introducing the world to a new way to insure their things: on-demand for any duration, entirely from a smartphone. We’ve had to reinvent the insurance value-chain — from customer engagement through claims — by leveraging tech at every point to make the experience meet the expectations of emerging generations.

We’ve launched in Australia and the United Kingdom, and will shortly be in the U.S. Trōv assumes no underwriting risk; instead we partner with established insurers in each territory who bolt their balance sheet onto our proposition. We collect premiums in the app, keep a portion for ourselves, and share the remainder with our underwriting partners. We think that this is one of the models that will endure the massive shake-up hitting the insurance industry as it leverages the key assets of both Trōv and our partners: rapidly deployable, massively scalable, user-centric tech and design from us; balance sheet and regulatory strength from insurers.

We enjoy great relationships with our partners. That’s not to say we don’t experience aggravations and frustrations (in both directions). We do. But so far we’ve entered into several strategic business relationships with global insurance leaders (Munich Re, Suncorp, Sompo, and Axa UK) and there are a few more in the works. Over the past couple of years we’ve learned a lot about the ingredients that contribute to an enduring and positive partnership. So, in no particular order, here are seven things we have learned:

1. Real innovation is driven top-down; be wary if you don’t have C-level support.

   Heads of Innovation (or similar titles-du jour) are in vogue today but watch out when fundamental financials get compressed. Insurtech is growing-up amid a relatively profitable era in global insurance with few major calamities to drain coffers. When that changes (and it will) and the fear of pinched profits returns to the boardroom, innovation may be sacrificed on the altar of margin-efficiencies and viewed as a luxury of plenty.

2. Don’t do pilots; they invite abandonment and indicate a lack of partner conviction.

   Many think pilots are like test drives. They’re not. Pilots are more like rental cars: meant to be driven hard for a short time and given back. If your partner wants you to do a pilot, be cautious. Short-term thinking and safety nets are the enemies of true innovation, and a pilot is usually fraught with safety valves, inadequate resourcing, and near-term horizons. We learned we had to find a new way to measure time: not in linear terms of days or months, but rather in software iterations. In other words, since we’re iterating our application based on learnings from, let’s say, customer engagement, then we need to measure how things are going not based on some arbitrary date (“a six month pilot”) but instead on our ability to impact the metrics with each iteration of our software. It’s a new way to think altogether. To be clear: one of your roles in the partnership is to assist the partner in making near-term failure an acceptable ingredient of long-term success.

3. Equity is a great leveler.

   One of the best ways to assure everyone’s pulling in the same direction is to invite partners to own some of your equity. At Trōv, several of our business partners also own our equity. Even though none owns more than a few percentage points, the alignment is palpable. For example, one partner — who also owns some equity — recently let go of an exclusivity business term, reasoning that they would benefit more from the potential increase in Trōv’s equity value if our technology were to be deployed beyond their application. We’ve found that selling some equity to partners aligns both P&L and balance sheet objectives, inviting good will and patient cooperation.

4. Anticipate that your champions will move on; pay attention to the care and feeding of relationships.

   Partners are people, partnerships are relationships, and relationships need attending to. We found that regular (weekly, or 2x/month) video-conference check-ins with stakeholders is good relational hygiene. Bonus: our secret to building and deepening partner bonds? Fill up the ranks of your business development team with the Irish. (You think I’m kidding? Our team is nearly 100 percent Irish born and bred; they’re brilliant, hard working, equally hard playing, people-minded, and have a remarkable instinct for turning business partners into trusted friends.)

5. Be sure someone wakes up every day thinking about your success.

   Someone who wakes-up every day knowing that their job and your success are intrinsically linked is a must-have. Besides managing the myriad deliverables attendant to your mutual business objectives, the person assigned to your success will be your surrogate during the serendipitous hallway encounters when a little defense of your proposition is needed. And they’ll be your local weather vane, measuring the subtle directional shifts so critical to a nuanced response in times of pressure or heightened scrutiny.

6. Repeat after me: ‘Innovation is risky, costly and will take time.’

   Meaningful results should be measured over quarters, possibly even years. Be sure this is not only well understood by all stakeholders but also that it becomes something like a manifesto underwriting the partner’s intent to innovate with you. When results are slower than anticipated, or some other inevitable hiccup is encountered, most incumbents will exercise a sort of enterprise muscle memory that’s predictably reactive, protective and safe. A declaration of innovation serves as a reminder that what you’re doing is anything but predictable and the right thing to do is to patiently learn, revise, adapt and keep pressing forward. We’ve often had to remind our partners that what we’re doing is entirely new and while viability is the ultimate goal, the transformation we’re jointly seeking will challenge many of the practices of the past.

7. Do a mandatory all-hands review each quarter; C-suite not optional.

   This regular confab is a good forcing function for any number of near-term objectives (“let’s have that ready for the quarterly review…”) and is a time for reviewing, resetting and aligning around what you’re both trying to achieve. C-level participation is not optional, in fact this is the optimal time to assure those who are in the day-to-day messiness of transformative innovation that they have permission to both make and live in that mess, change takes time, and senior leadership has your back.