UPC Insurance embraces shift to insurtech business model

St. Petersburg-based UPC Insurance (NYSE: UIHC) has long been a leading carrier of residential and commercial insurance for coastal properties that are exposed to risk from catastrophic weather events. But over the past couple of years, it has steadily invested in high-tech infrastructure that has allowed it to enter the insurtech space with a new subsidiary company called Skyway Technologies.

Chris Griffith, UPC’s chief information officer who’s pulling double-duty as president of Skyway Technologies, said the move opens up a whole new sales channel for the company. Instead of selling insurance policies through independent agents, Skyway can sell online direct to consumers.

“It’s not truly a spinoff company,” Griffith told the Catalyst. “It’s essentially a company that allows us to be licensed as insurance agents and sell our insurance as an agency through an omni-channel. Instead of going to an agent or agency, who would give you different quotes and help you buy [a policy], we are creating a website that’s easy to use, wherein, if you follow the path through the system — click, click, click — in about two minutes and 12 screens, you’ll have a bindable insurance policy. It’s literally that simple.”

Skyway Technologies, Griffith said, will initially focus on the condo market in Florida, but the technology underpinning the new venture will allow the company to easily add new products and expand to new markets.

“We don’t have a full expansion plan yet,” he said. “UPC is a coastal carrier — that’s where we focus. We’re good at underwriting the coast and we have good relationships on the coast, so that’s where we want to stay for now. But we’ll expand as the market allows us to. If there’s good traction and people love what we’re building, we’ll take it to other markets.”

Griffith said there will always be a place for independent insurance agents and agencies, and that an insurtech player like Skyway Technologies isn’t designed to replace the industry’s human element — and likely never will be a true substitute.

“Insurance is complicated,” he said. “It’s kind of like doing your taxes — if you can do the 1040 EZ form, sure, you can do them yourself. But if you have more complicated scenarios, then you’re going to want to go find someone to help you through that.”

According to a poll of about 400 UPC employees conducted by Griffith, two-thirds of respondents said they would buy a home insurance policy online without consulting an agent. Many of them said they would prefer the direct-to-consumer route even if it meant they would pay more for the policy.

“More and more people are looking for ease of use,” he said. “Time is money. There’s a fast-growing market on the direct-to-consumer side; people want that website where they can click a few buttons and get a quote.”

For a tech industry veteran like Griffith, who said he started his career with an online furniture company during the dotcom bubble, UPC’s embrace of an insurtech model validates all the work he and his colleagues have done to beef up the company’s approach to data science and data analytics.

“Every single minute as quotes are coming in we’re watching that in real time,” he said. “We’re watching how many of those quotes are getting bound into policies, and we’re watching the average premium on those. So we’re able to adapt the products and the screens, the user interface, as we’re watching the data. To me, that’s a differentiator.”