The Future Focused CXO is the podcast for C-level executives aiming to scale their organizations, lead through transformative challenges, and stay ahead in adopting cutting-edge technologies like AI. Each episode explores actionable leadership strategies, insights on managing rapid organizational change, and real-world examples from top executives tackling the complexities of modern business operations.
In this episode of Future Focus CXOs, we interviewed Marc Frenkel, the CFO of a leading InsurTech firm, to dive into the complexities of managing capital and driving growth in the insurance industry. Marc shares valuable insights on how to balance innovation with operational efficiency in the rapidly evolving landscape of InsurTech.
Key takeaways include:Tune in to learn how technology, strategy, and careful financial planning are transforming the insurance industry.
Navigating the complexities of InsurTech requires more than just innovation—it demands a deep understanding of risk management, capital efficiency, and market adaptability. In this episode of Future Focus CXOs, we had the pleasure of speaking with Marc Frenkel, CFO of a leading InsurTech firm. Marc shared his experiences in optimizing financial strategies, leveraging technology to streamline operations, and tackling the unique challenges within the insurance industry. His insights offer valuable takeaways for both startups and established companies looking to excel in an increasingly competitive market.
Marc’s journey into InsurTech wasn’t conventional. After starting his career in investment banking and private equity, he found his calling in the turnaround side of insurance, where his background in distressed companies proved valuable. He found a way to use his experience to bring a fresh perspective to the challenges faced by insurance companies. In our conversation, Marc shared how companies in this space must balance profitability, technology, and customer satisfaction to succeed. Here’s what Marc had to say about the key factors driving growth and innovation in the InsurTech world today.
Marc emphasized that capital efficiency is crucial for InsurTechs, especially in today’s uncertain market conditions. InsurTechs must focus on getting the most out of every dollar they invest. This isn’t just about reducing costs but ensuring that every investment leads to measurable, sustainable growth. For InsurTechs, this means making smart decisions around pricing, underwriting, and automation.
As Marc pointed out, the key to maintaining profitability is smart capital allocation. Premium pricing must be competitive enough to attract customers while maintaining healthy margins for the company. This requires a deep understanding of risk, market dynamics, and customer behavior.
One of the most exciting opportunities in the InsurTech space is the ability to use technology to streamline operations. Marc spoke about how technology enables companies to scale without increasing operational costs proportionally. Traditional insurance models require significant human resources to handle customer interactions, which drives up expenses. However, by automating routine tasks and improving efficiency through technology, InsurTechs can sell more policies without increasing headcount.
By automating routine customer interactions and optimizing workflows, InsurTechs can achieve better margins and provide a better customer experience. Technology enables the business to focus on what really matters—building relationships, improving risk assessment, and expanding its customer base—while reducing unnecessary costs.
Insurance companies must price for catastrophic risks like hurricanes, wildfires, and other natural disasters. Marc explained how his company approaches this challenge by focusing on markets that carry less catastrophe risk. InsurTechs must carefully consider their geographic focus to avoid the volatility and uncertainty that comes with high-risk areas.
The current environment of rising interest rates adds another layer of complexity to pricing. In a low-interest-rate environment, the value of future cash flow was less discounted, but now that rates are at 7%, future cash flow is worth significantly less. This means that InsurTechs need to prioritize short-term investments that deliver immediate returns rather than long-term speculative bets. Marc highlighted that this shift in the financial landscape requires companies to be even more cautious with their capital allocation and focus on efficiency and scalability.
Many InsurTechs have tried to disrupt the insurance industry by selling directly to consumers, bypassing agents altogether. While this model has its advantages, Marc pointed out that it isn’t always the best route, especially when targeting smaller businesses. Selling insurance online to individuals can lead to higher acquisition costs and risks, making policies less profitable.
Marc emphasized that working with agents is crucial to the long-term sustainability of the business. By providing agents with efficient tools, like streamlined quoting and binding systems, InsurTechs can enable them to serve small businesses with ease. Agents are incentivized to sell policies because they can now provide customers with bindable quotes in a fraction of the time it would normally take, making this model both scalable and profitable.
One of the most important lessons Marc shared is the value of learning from setbacks. He spoke about his transition from working with distressed companies to building something new in the InsurTech space. The journey wasn’t without challenges, and Marc highlighted that setbacks are an inevitable part of business growth.
For those aspiring to become CXOs, Marc’s advice was clear: stay calm and rational when facing new challenges. It’s important to learn from failures, embrace them as part of the journey, and keep a level head when tackling obstacles. The key to success lies in addressing problems methodically and using setbacks as learning experiences to refine your approach.
Marc Frenkel’s insights offer a clear roadmap for InsurTech leaders who are navigating the complexities of the modern insurance industry. By focusing on capital efficiency, leveraging technology to streamline operations, and carefully managing risks, InsurTechs can scale sustainably without sacrificing profitability. The future of InsurTech lies in smart investments, thoughtful pricing, and the effective use of technology to empower agents and customers alike.
As the industry continues to evolve, the most successful InsurTechs will be those who can balance short-term efficiency with long-term growth, all while keeping a calm and methodical approach to decision-making. If you’re looking to drive growth in InsurTech, Marc’s journey and advice provide a valuable blueprint for navigating this dynamic sector.