HOW INSURTECH IS CHANGING THE TRADITIONAL INSURANCE LANDSCAPE
Since the start of last year, I have interviewed around 100 InsurTech start-ups and early stage businesses. I’ve spoken with the founders and CEOs of all of these insurance technology firms.
All of these InsurTechs fall into one of two categories: 1) Some of them have built new technology tools to be used by insurers. And 2) some are new digital insurance providers themselves.
When people ask me what’s the biggest difference between the InsurTech and the established insurers and vendors, I have to say that the number 1 difference is ‘Putting the Customer First’.
The InsurTech approach is to solve the customer’s problem. In distribution, this is all about making it easier for the customer to buy insurance. The way the customer wants to buy it. When they want to buy it.
Simple, transparent and fair.
This is Outside In Thinking, where the business is designed and built around the customer.
When I talk with senior executives and the leadership at established insurers, their language is not the same. They talk about the customer, but from an Inside Out perspective.
They talk about the insurance products that they want to sell, and of operational efficiency (see related article here). Unfortunately, that can lead to some customer unfriendly outcomes. Which is why the rates of upheld complaints by the ombudsman are so high and we see insurance products in the market like no-claims protection that doesn’t protect your no-claims or “Ski Cover that fails to cover Skis”.
The Characteristics that define InsurTech
This focus on the customer by the new breed of digital and mobile InsurTech distribution players can be defined by several emerging characteristics.
These characteristics change the dynamic of the relationship between the customer and insurer where there is continual engagement over the term of the policy.
Here the product becomes integrated in the customer’s lifestyle. It becomes sticky and overrides the annual buying process where price is the key buying criteria. Digital natives are responding well to lifestyle apps that allow them to buy insurance as they need it, when they need it.
With the Internet of Things – telematics, wearables, connected homes – insurers have new sources of data to rate and underwrite risk. Add to this data science, machine learning, artificial intelligence and high performance computing and insurers are able to process data in completely new ways.
This is the key to fundamentally change the way insurance is manufactured, especially in the personalisation of insurance premiums and policies.
Finally, the true value of insurance is only realized when the customer makes a claim. The shift towards self-service and the increased use of VideoTech in the claims process is already showing higher levels of customer satisfaction and improved costs for insurers.
Don’t just take my word for it!
Hear it for yourself from three founders of InsurTech start-ups.
Last week I hosted a BrightTalk webinar and my guests were the InsurTech founders of Sure, Trov and GetSafe. I was also joined by KPMG for their perspective on compliance and the regulatory challenges for InsurTech start-ups.
A complete set of the presentation slides can be found here.
Introducing the Panelists
Wayne Slavin is the CEO and co-founder of Sure. Sure is in the market selling Episodic Insurance™ This is individual accident, life, property, casualty, and warranty insurance policies on-demand and direct to consumers through their mobile devices using a first of it’s kind Robo-Broker.
Mark Dowds is the Co-Founder + Chief Strategy Officer for Trov. Having recently announced a Series C round of $25.5m, including an investment from Guidewire, Trov are the world’s first on-demand insurance application for single items.
Christian Wiens, the co-founder and CEO of German startup GetSafe. The GetSafe app is a mobile insurance broker solution that aggregates all their customer’s insurance in one place. It already has 60,000+ insurance policies from 15,000+ customers under management
Nicola Ball is a Senior Manager in KPMG’s Regulatory Risk Consulting team. Nicola has supported a number of insurers implement more innovative solutions and is currently on secondment as Head of Compliance for the digital business of one of the UK’s largest insurers.
The Digital Insurer Webinar – “Insurance through the Eyes of the Customer”
On the same theme of putting the customer first and digital insurance, Hugh Terry and the team at The Digital Insurer will be hosting a webinar on June 15th.
Listen to an experienced, global panel of insurance professionals present, discuss and answer questions and the theme of “Insurance through the Eyes of the Customer”.
Related InsurTech Weekly articles and relevant links
For extensive research on all aspects of digital insurance, go to the:
The author, Rick Huckstep, is an InsurTech thought leader and editor of InsurTech Weekly for The Digital Insurer.