Highly relevant questions posed by Bernard Lung in Daily Fintech.
He pictures the following "You are from Switzerland, but you are visiting New York, the Insurtech startup is in London, but is regulated in Bermuda and the servers are Iceland. Your lawyer starts talking about jurisdictional issues while he plans for a long and expensive project."
Digital transformation of the insurance world is about far more than just Insurtech
In ye olden days, Capital Adequacy simply meant a Regulator telling the Insurance company how much capital they need to hold in reserve. Only big established firms could play this game. Now think of these tough questions: An Insurtech startup is only insuring small items, the sort of stuff that was seldom insured in the past because it was too much hassle, but now a couple of swipes on a phone does it. How much capital do they need compared to a company insuring life, health, house or car? A minimally capitalized Insurtech startup creates a digital experience on top of a Reinsurance company platform. Whose capital has to be adequate, the Insurtech startup or the Reinsurance company?