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INSuRANCE LAW

Client Relations third parties. However, it is important to note
The new app features make insurance that other common apps such as Google Maps
more accessible and comprehensible to the or Uber are already collecting telematics on their
policyholder. The apps can also open up unique users, insurtech apps are just more transparent
lines of communication with drivers, thereby regarding the tracking. As Weintraub explained,
giving an insurance provider an opportunity to “We’re used to being tracked today and being
improve or solidify relations with clients. tracked in ways we don’t even think about and yet
Customer demand is trending towards the moment we are aware we are being tracked
wanting claims processed faster. As Weintraub for [insurance purposes], it changes a person’s
pointed out, ‘people are noticing delays and see mindset [and makes them feel as though their
that every point in the value chain today takes privacy is being invaded].”
longer than it probably could.’ Recent studies
have confirmed that using the usage-based Competition
programs that cut the time it takes to approve a The auto insurance industry competition is fierce.
new insured or reach a claim resolution provides New insurtech companies are facing traditional
greater customer satisfaction. The technology insurance carriers who have strong capital reserves
also provides greater feelings of trust due to and brand recognition. Many insurtech start-ups
the transparency that facilitates the Insureds’ have acknowledged the dominating strength of
understanding of how the insurance premiums these traditional insurance carriers and chosen
are determined. The programs reward good to partner with them but some are choosing to
drivers, which help the insurer build a warm compete directly with the big carriers. Those that
relationship with their safest (and thus more are proceeding independently are faced with the
profitable) drivers. pain of building reserves when they would prefer
to use those funds for further innovation.
cHallEngES facIng InSUrTEcH
comPanIES WHy SHoUlD aTTornEyS carE?
Insurtech companies have similar legal needs
Heavy Regulations of other start-up companies, but also have
Insurance is one of the most heavily regulated needs involving regulation and legislation.
industries. Insurtech companies are creating As their insured data accumulates, their
innovations that the insurance industry and compliance issues will also compound. The
state insurance regulators have never seen, so future impact that the accumulated data will outcome will be that insureds from all insurers
the current regulations did not contemplate have on litigation will also be profound. Data will benefit from the influence of this new type
the advances. For example, the complex gathered through smartphones will provide of insurance company.
licensing requirements that vary from state evidence that has never been available in the
to state are further complicated by issues of litigation arena. Presuming properly working
first impression, such as whether an insurtech equipment, recorded data showing a vehicle’s Mackenzie Robinson is a Staff
company must obtain its own producer license speed, braking, direction, acceleration, and Attorney at Rathbone Group, LLC,
when collaborating with a traditional insurer. location will be completely objective and not where she assists the firm in both
As a result, the drive to change the insurance influenced by opinion or faulty memory. The litigation and arbitration, as well
industry has sometimes been hampered when obvious relevancy and reliability of this data as client relations. Mackenzie has
learning that entering a market is more expensive make it likely that attorneys on both sides will been a member of the CMBA since 2018. She can
and time consuming then first anticipated, says move to discover the data in hopes it will aid in be reached at (800) 870-5521 or mrobinson@
Weintraub. Potential solutions such as sandboxes proving the case. The data can lend credibility rathbonegroup.com
(where insurance commissioners could relax in liability disputes, and in proving the severity
regulatory requirements to permit innovators to of the crash that caused the victim’s injuries.
experiment with new products or processes while The entrepreneurial spirit and advanced Kimberly L. Rathbone is the
maintaining consumer protections) have been technology in insurtech companies is creating Managing Partner of the national
proposed, but are not yet approved. waves in the traditional insurance industry, which insurance subrogation firm of
is not known for rapid change or taking high Rathbone Group, LLC. She has
Concerns on Privacy risks. Weintraub believes the most successful focused on insurance subrogation
While there are many benefits to these innovations insurtech companies will be ones that can mirror throughout her entire legal career representing
for both the insured and insurer, some believe traditional insurance companies the most, but numerous carriers and self-insured entities in
tracking app benefits come at a cost of personal still remain excited about the data because they all types of subrogation. Kim has been a
privacy. Many believe the GPS tracking data see value in protecting their insureds. Regardless member of the CMBA since 2001. She can be
is irrelevant to behavior and exposes them to of whether traditional insurers remain or the reached at (800) 870-5521 or krathbone@
cyber-attacks or the sale of their information to insurtech companies take over in the future, the rathbonegroup.com.
february 2019 Cleveland Metropolitan Bar Journal | 13