Scholten seeks to shake up insurance industry

Cameron Penney

Joshua Scholten, a recent graduate of the actuarial science program at Ball State University in Muncie, IN, will soon be putting his skills to the test when he competes in the “Hannover Re Entrepreneurial Competition” over the course of the next six months.
“The main goal of the whole program is to develop innovative ideas in the reinsurance and insurance space to create disruption,” explained the 21-year-old, who was born in Fort Frances and raised in Indiana.
“The whole goal is to reinvent the industry and create disruptive changes and innovations that really hasn’t been seen before in this sector,” he added.
Last month, Scholten was named one of six competitors that will represent the two U.S. teams based in Boston in the competition.
Six other teams are also taking part in the competition, with two teams each being based in Berlin, Germany; Dublin, Ireland; and Johannesburg, South Africa.
At the conclusion of the competition in December, an executive group in Hannover, Germany will determine the winner.
Scholten said he first became interested in the competition when one of his professors told him about it.
“My professor sent me an e-mail when I was in school, it sounded like a great opportunity so I went for it right away,” he recalled.
“I went out to Boston for an information session on April 14, it sounded really interesting,” he added. “I made some friends there, sent an e-mail, showed my interest, and got called back for a tryout and that was on May 20.”
“Twenty people got called there and it was basically team-building exercises and some personal and other team tasks.
“Then they picked six people from there and thankfully I made it,” he enthused.
This week, Scholten, along with the other competitors, are in Germany for a week of introductory activities.
“We have a week there of more team building stuff, and a lot of information about the reinsurance industry, and some hot topics that are going on,” Scholten remarked.
The following three months of the competition will be known as the “diverging phase.”
“We are trying to come up with as many ideas as we can and try to realize them,” he stressed.
“Then we have two months of the ‘converging phase,’” Scholten continued. “We take the best ideas that we come up with and try and make one solution that solves a bunch of different problems and changes the way everything works right now.”
“Then after that we have a month where we have a business case generation where we take that one idea that we came up with, that one solution.”
After choosing the solution that is the best out of all their ideas, Scholten and his two teammates will meet with coaches to refine the idea.
“That last month­—it’s more intense and we’re trying to make an actual business case so that our idea can be implemented,” he explained.
“And then we have to present that in Germany … to the executive board and they make a decision about who’s idea they like the most and where to go from there.”
The winning team in the competition will split a prize of 50,000 euros (approximately $72,000 CAD) while second place will take home 20,000 euros (approximately $28,000 CAD).
“Just having this opportunity is going to be a good enough prize in itself,” Scholten stressed.
When teams are searching for a solution to reinvent or create change in the insurance and reinsurance industries, they aren’t necessarily looking to solve one problem—they’re looking to find a way to change how things work.
“Insurance is pretty stagnant with the way it works—there’s all sorts of mail and paperwork and all sorts of long processes that happen right now that could be sped up with all the new technology coming out,” Scholten reasoned.
He also cited innovate technologies such as driverless cars and smartwatches as products that could create change in the industry.
“If you’re not driving [in the driverless car], the insurance is going to be different because you’re not going to have to insure yourself,” he explained. “Whoever is the manufacturer of the driverless car is going to have to be the one to provide the insurance.
“And what happens if it crashes and two driverless cars crash into each other?” he wondered. “Who’s at fault and who is liable for that?”
Some features of smartwatches include collecting data of a person’s heart rate and how many steps a person takes.
“[Insurance companies] can use that data to change or predict how healthy you are,” he noted. “And that is important for both health insurance and life insurance.”
To win the competition, Scholten believes several different traits will be integral to be able to win the competition.
“Creativity is going to be a big one, because they’re looking to change the way it works, they’re not looking for people that necessarily have the normal insurance background,” he reasoned.
“But that going to be important as well because you have to be able to make sure that these ideas are actually viable and can be used.
“I think a strong business sense will be necessary,” he added. “The goal is a new business idea.”