Invisibility as a design principle for insurance

What if policies weren't either bought or sold? What if they just happened? What if they were almost invisible?


I'm speaking at a gathering of life insurance executives this week on the Gulf coast of Florida, and a topic that I'll address is one that merits wider consideration: the need for invisibility.

There's been talk about how insurance may be switching paradigms: Rather than having policies be "sold, not bought," we're now moving toward having them be "bought, not sold." There's truth to that, given that the internet gives people access to so much more information; potential clients are doing lots of research and are less susceptible to traditional sales tactics. But what if policies weren't either bought or sold? What if they just happened? What if they were almost invisible?

Trov, Slice and a few others are moving us in that direction, making activating a policy as simple as a swipe on a mobile phone. In the developing world, shipping rice may carry some insurance automatically, and other types of nearly invisible microinsurance are taking hold. Other types of insurance will follow, if we're creative enough. Perhaps taking out a commercial mortgage could bring with it a policy on the owner for the term of the mortgage -- the policy could be underwritten mostly based on some basic information about the owner, and there would be almost no transaction costs, removing two of the obstacles that can make buying life policies cumbersome.

In any case, the idea of invisibility is worth keeping in mind as a design principle. If we can move toward making policies as simple as an app on a phone, sales as easy as "would you like fries with that?" and customer service as comfortable as a stream of text messages, we'll go a long way.

To whet your thinking, here is a recent article from Forbes that explains how powerful the concept of invisibility has turned out to be in banking.

I hope you'll also visit our website to explore the nearly 2,600 articles by our more than 800 thought leaders. I also encourage you to look at the Innovator's Edge, where we are tracking the progress of nearly 800 insurtech startups. We're about to roll out some tools that will make it much easier for startups and incumbents to find each other there -- sort of an eHarmony for insurtech.


Paul Carroll, Editor-in-Chief

P.S. Yes, if you must know, it's lovely here. While my home state of California is being whacked by another major storm and much of the rest of the U.S. is shivering, the temperatures here will be in the high 70s and low 80s this week. I'll suffer through.... 

Paul Carroll

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Paul Carroll

Paul Carroll is the editor-in-chief of Insurance Thought Leadership.

He is also co-author of A Brief History of a Perfect Future: Inventing the Future We Can Proudly Leave Our Kids by 2050 and Billion Dollar Lessons: What You Can Learn From the Most Inexcusable Business Failures of the Last 25 Years and the author of a best-seller on IBM, published in 1993.

Carroll spent 17 years at the Wall Street Journal as an editor and reporter; he was nominated twice for the Pulitzer Prize. He later was a finalist for a National Magazine Award.


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