In 2020 alone, the USA saw a 60% jump in the funding that Insuretech companies and startups attracted. A vast majority of these spends are going to startups which have also helped drive the industry spending and funding to $2.44 billion (from $1.46 billion) in a space of just three years.
The pandemic accelerated a shift from traditional models of work into the technology-backed solutions that have started making waves since then. A lot of these industries and emerging trends have been here for a while, but the pandemic was the catalyst that put them in the spotlight.
In line with that, there have been immeasurable changes in the world of work. While more people are working from home, others are making the shift from established brands into startups, and the insuretech space is no stranger to this influx of professionals.
Before you jump ship, though, how technically reasonable is such a move for you?
The Case for Jumping Camps
It is estimated that only about 4% of millennials will like to work in the insurance sector. This is a really small number, especially when compared against other industry standards.
However, Insuretech is driving those numbers up with the promise of technology and fast advancement favoring the addition of, especially young and skilled workers. An educated deduction will be that most of these skilled professionals are taking their services to startups, considering how long it takes legacy players to effectively implement such tech in their processes.
For one, it makes sense for professionals in the industry to make this move right now. Even if you were newly entering the insurance space, getting in with an Insuretech start-up is a winning formula.
Why’s that?
Already, about 50-60% of the operations in the insurance industry back office can be automated. This cuts out tens to hundreds of thousands of jobs, expected to reach at least one million jobs, in the coming years.
Of course, this is sure to bring up the age-long debate of robots and computers taking all the jobs. In reality, though, these robots and computers are only taking the mundane, repetitive tasks to allow the human workforce to focus better on more productive use of their time.
Joining a start-up early exposes you to the technical skills, relevant knowledge, and applicable experiences which allow you to thrive in the industry for years to come. Think of it as future-proofing your career.
Better than that, the challenges provided by a start-up are usually motivating enough to make workers want to keep learning.
Most startups are venturing into spaces that no one has a defined impact in, so they are innovating as they go. That brings with it a fair share of concerns, pitfalls, and problems that need to be tackled head-on. As a point person in such a start-up, your problem-solving skills and professional standing are better sharpened.
That said, working with a start-up is not all rosy. In the insurance niche which is already a tedious one for most people, switching into Insuretech is not all a bed of roses.
Well, it might still be likened to a bed of roses – but even roses have their thorns.
The Cons of Switching to A Small, New Employer
According to the US Small Business Administration, only about 50% of businesses with employees spend more than 5 years in the market. Even after the 5-year mark, there is still the fear of shutting down for those that remain.
Likewise, only 2 in 5 startups will ever be profitable. Of the other three, 1 could manage to break even.
As a skilled or new professional who is looking for a long-term position where they can either grow into leadership roles or enjoy stability, that doesn’t cut it for you.
The good news is that about 41% of consumers are currently willing to switch to a more digitized insurance company, so the market is going to get bigger. It now boils down to the management and operational decisions around the business to determine how well it fares.
In addition to that, growing a start-up usually requires putting in extra time than usual.
Fundera reports that about 81% of small business owners in the US alone work overtime. As an employee, you would also be required to put in all those extra hours to secure the success of the start-up.
Leading from that, there is the problem of burnout from wearing multiple hats. To reduce spending, manage budgets better yet get things done, it is not uncommon for start-up employees to execute tasks beyond their primary commitments – and without extra pay in some cases.
All these, among others, are valid concerns that you should consider before making the switch or entering the start-up industry at all.
Balancing the Scales
Innovation Strategist, Jenny M. Jackson, has worked with several Insuretech startups to solve some of the staffing-staffer problems that might set them back, among other solutions provided.
As a start-up looking to attract professionals that will commit for the long term, a working model, a viable solution and a long-term plan are must-haves.
We have helped startups test their ideas against their current and projected market, for example, to ensure that they don’t just provide a flash-in-the-pan product/ solution. Otherwise, they lack the pull to attract leading industry talent that will stick with them and help them grow the brand, among others.
As an employee looking to work with a start-up, you should also look at how the company generates ideas, implements the ideas, and innovates/ pivots fast to meet its market.
In our years helping Insuretech startups to build relatable and dependable solutions, we have discovered that the initial product is not usually the winning thing. Rather, it is how flexible and customizable the pathway to innovating and improving on that product is, such that there is a market-need fit at every instance.
Hit the Ground Running Today
Position your Insuretech start-up for success and attract the right talent with relative ease when you take advantage of our solutions.
Jenny M. Jackson's simple yet effective, proven industry process is designed to help startups increase their confidence in decision-making processes such that they have a winning template that takes them beyond the start-up phase.
Schedule a call with one of our advisory experts today and be on the way to running a healthy, winning start-up.
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