The days of insurance carriers acting as casual observers in the startup ecosystem faded as the industry faced a tightening investment landscape and a deluge of new regulations. The engagement model shifted from experimental pilots to rigorous commercial adoption. For Sabine VanderLinden (pictured), CEO and venture–client partner at Alchemy Crew Ventures, this transition to “venture clienting” raised the bar for any technology provider hoping to survive the next cycle.
VanderLinden, who previously established Startupbootcamp in Europe and the United States, noted that the industry had moved beyond the era of “innovation theater”. In the years leading up to the pandemic, many carriers participated in the ecosystem primarily to watch and learn.
“Just before COVID-19, I realized that there was a big challenge because the corporate – or the insurance carrier – was an observer in the corporate venturing relationship. I realized that it was evaluating the technology from startups to change both their operating environment and their business model,” VanderLinden said.
The venture client model represented a fundamental maturation in how incumbents interacted with innovators. It was no longer about running an accelerator program to help a startup raise funds; it was about the carrier becoming the startup’s first paying enterprise customer. This shift changed the risk–reward dynamic entirely.
“The shift from the corporate–startup engagement to the venture client model is one of a commercial relationship, and the evaluation criteria have changed,” she said. “The choice is not a pure technology choice anymore. It is first a cultural choice: can I work with you?”
This new commercial reality forced insurers to look past the pitch deck and scrutinize the balance sheet. With fintech and insurtech investment remaining flat - VanderLinden estimated around $7 billion for the year, which she called “a fraction of the potential” - carriers prioritized partners with pedigree. They sought ventures that were already generating revenue and profitable, rather than early-stage experiments.
“This year, the interaction has been carrier versus venture that is more mature, with pedigree, generating revenue and being profitable,” she said.
For a carrier to integrate a new solution into its core operations, it needed assurance that the provider would not disappear when funding dried up. The primary question became one of endurance.
“It is about looking at sustainability: can I work with that partner, and can I make sure it is going to be there five years from now?” VanderLinden said. “It has to be there for at least five years – I think five years would be the minimum.”
Beyond financial health, the regulatory hurdles for entry multiplied. VanderLinden pointed to a landscape of roughly 70 new regulations in Europe alone, creating a significant compliance burden that startups had to navigate before even discussing their technology.
“When you look at a regulatory or compliance officer within a carrier, they have to understand all those different new regulations and then focus on the most relevant ones – the AI Act, DORA, and so on,” she said.
For startups, this meant the first gatekeeper was often a compliance officer rather than a technology buyer.
“The primary criterion to get to work with a carrier will probably first be ticking the box: are you SOC-compliant, are you DORA-compliant, have you thought about your AI ethics, AI Act implementation, and in the US the NAIC principles?” VanderLinden said.
While compliance set the baseline, decision-making was increasingly driven by architectural compatibility with major tech stacks. As carriers prepared for an AI-driven future, they forced startups to align with specific environments. VanderLinden noted that early-stage and mature startups alike had to choose whether they were a “Microsoft shop or a Google shop.”
“When you look at your journey as an employee within an organization, or as someone delivering value to a customer, you have to email, create PowerPoints, work in Excel – all the very basic stuff,” she said. “So are you going to do email, Excel, and all those things on Google or on Microsoft? That is the first question.”
This choice cascaded down to the integration with core insurance systems like SAP and Guidewire.
“One thing I have realized over the past few months is that some of the choices are not just startup-related,” she said. “They will also be related to one’s understanding of a carrier’s or broker’s choices of cloud computing and employee-related technologies in order to help each integrate such technology much faster.”
This intense focus on internal architecture and core renovation explained why many large insurers, particularly from Europe, were notably absent from recent industry events like InsureTech Connect (ITC). According to VanderLinden, these organizations turned inward to “sort out their infrastructure” before they could effectively ingest new solutions.
“Their top priority is core system renovation or reinvention,” she said. “They have to get their house in order. That focus on clean data, core systems, and cloud means early-stage ventures might not be where they get the answers.”
Carriers reasoned that they were already working with the “big tech” players - OpenAI, Microsoft, IBM, Google - to handle their AI transformation.
“The choice they have made this year is that they have to sort out their infrastructure to deal with AI,” VanderLinden said. “They have to deal with the core system. They have to deal with the AI transformation we are going through.”
VanderLinden warned that the industry was rushing toward “agentic AI” - autonomous agents performing complex tasks - but the market might face a correction before the technology fully matured.
“Then you have the AI boom. I think we are going to see a crash, but we will see,” she said.
