Tag Archives: HomeAway

4 Insurers’ Great Customer Experiences

McKinsey research has found that insurance companies with better customer experiences grow faster and more profitably. In 2016, 85% of insurers reported customer engagement and experience as a top strategic initiative for their companies. Yet the insurance industry continues to lag behind other industries when it comes to meeting customer expectations, inhibited by complicated regulatory requirements and deeply entrenched cultures of “business as usual.”

Some companies–many of them startups–are setting the gold standard when it comes to customer experience in insurance, and are paving the way for the industry’s biggest insurers to either fall in line, or risk losing out to smaller competitors with better experiences. Through a combination of new business models, clever uses of emerging technology and deep understanding of customer journeys, these four companies are leading the pack when it comes to delivering on fantastic experiences:

1. Slice – Creating insurance products for new realities.

Slice launched earlier this year and is currently operating in 13 states. The business model is based on the understanding that, in the new sharing economy, the needs of the insured have changed dramatically and that traditional homeowners’ or renters’ insurance policies don’t suffice for people using sites like AirBnB or HomeAway to rent out their homes.

According to Emily Kosick, Slice’s managing director of marketing, many home-share hosts don’t realize that, when renting out their homes, traditional insurance policies don’t cover them. When something happens, they are frustrated, angry and despondent when they realize they are not covered. Slice’s MO is to create awareness around this issue, then offer a simple solution. In doing so, Slice can establish trust with consumers while giving them something they want and need.

Slice provides home-share hosts the ability to easily purchase insurance for their property, as they need it. Policies run as little as $4 a night! The on-demand model allows hosts renting out their homes on AirBnB or elsewhere to automatically (or at the tap of a button) add an insurance policy to the rental that will cover the length of time–up to the minute–that their home is being rented. The policy is paid for once Slice receives payment from the renter, ensuring a frictionless transaction that requires very little effort on the part of the customer.

See also: Who Controls Your Customer Experience?  

Slice’s approach to insurance provides an excellent example of how insurers can strive to become more agile and develop capacities to launch unique products that rapidly respond to changes in the market and in customer behavior. Had large insurance companies that were already providing homeowners’ and renters’ insurance been more agile and customer-focused, paying attention to this need and responding rapidly with a new product, the need for companies like Slice to emerge would have never have arisen in the first place.

2. Lemonade – Practicing the golden rule.

In a recent interview, Lemonade’s Chief Behavior Officer Dan Ariely remarked that, “If you tried to create a system to bring about the worst in humans, it would look a lot like the insurance of today.”

Lemonade wants to fix the insurance industry, and in doing so has built a business model on a behavioral premise supported by scientific research: that if people feel as if they are trusted, they are more like to behave honestly. In an industry where 24% of people say it’s okay to pad an insurance claim, this premise is revolutionary.

So how does Lemonade get its customers to trust it? First, by offering low premiums–as little as $5 a month–and providing complete transparency around how those premiums are generated. Lemonade can also bind a policy for a customer in less than a minute. Furthermore, Lemonade has a policy of paying claims quickly–in as little as three seconds–a far cry from how most insurance companies operate today. When claims are not resolved immediately, they can typically be resolved easily via the company’s chatbot, Maya, or through a customer service representative. But perhaps the most significant way that Lemonade is generating trust with its customers is through its business model. Unlike other insurance companies, which keep the difference between premiums and claims for themselves, Lemonade takes any money that is not used for claims (after taking 20% of the premium for expenses and profit) is donated to a charity of the customer’s choosing. Lemonade just made its first donation of $53,174.

Lemonade’s approach to insurance is, unlike so many insurers out there, fundamentally customer-centric. But CEO Daniel Schreiber is also quick to point out that, although Lemonade donates a portion of its revenues to charities, its giveback is not about generosity, it is about business. If Lemonade has anything to teach the industry, it is this: that the golden rule of treating others as you want to be treated, holds true, even in business.

3. State Farm – Anticipating trends and investing in cutting-edge technology.

The auto insurance industry has been one of the fastest to adapt to the new customer experience landscape, being early adopters of IoT (internet of things), using telematics to pave the path toward usage-based insurance (UBI) models that we now see startups like Metromile taking advantage of. While Progressive was the first to launch a wireless telematics device, State Farm is now the leading auto insurer, its telematics device being tied to monetary rewards that give drivers financial incentives to drive more safely. The company also has a driver feedback app, which, as the name suggests, provides drivers feedback on their driving performance, with the intent of helping drivers become safer drivers, which for State  Farm, equals money.

By anticipating a trend, and understanding the importance of the connected car and IoT early on, State Farm has been able to keep pace with startups and has reserved a seat at the top–above popular auto insurers like Progressive and Geico–at least for now. If nothing else, unlike most traditional insurers, auto insurance companies like State Farm and Progressive have been paving the way for the startups when it comes to innovation, rather than the other way around. For now, this investment in customer experience is paying off. J.D Powers 2017 U.S Auto Insurance Study shows that, even as premiums increased for customers in 2017, overall customer satisfaction has skyrocketed.

4. Next Insurance – Automating for people, and for profit.

Next Insurance believes that a disconnect between the carrier and the customer is at the heart of the insurance industry’s digital transformation problem. In essence, it’s a communication problem, according to Sofya Pogreb, Next Insurance CEO. The people making decisions in insurance don’t have contact with the end customer. So while they are smart, experienced people, they are not necessarily making decisions based on the actual customer needs.

Next Insurance sells insurance policies to small-business owners, and the goal is to do something that Next believes no other insurer is doing–using AI and machine learning to create “nuanced” and “targeted” policies to meet specific needs.

An important aspect of what makes the approach unusual is that, instead of trying to replace agents altogether, Next is more interested in automating certain aspects of what agents do, to free their expertise to be put to better use:

“I would love to see agents leveraged for their expertise rather than as manual workers,” Pogreb told Insurance Business Magazine. “Today, in many cases, the agent is passing paperwork around. There are other ways to do that – let’s do that online, let’s do that in an automated way. And then where expertise is truly wanted by the customer, let’s make an agent available.”

See also: Smart Things and the Customer Experience  

While innovative business models and cutting-edge technology will both be important to the insurance industry of the future, creating fantastic customer experiences ultimately requires one thing: the ability for insurance companies–executives, agents and everyone in between–to put themselves in their customers’ shoes. It’s is a simple solution, but accomplishing it is easier said than done. For larger companies, to do so requires both cultural and structural change that can be difficult to implement on a large scale, but will be absolutely necessary to their success in the future. Paying attention to how innovative companies are already doing so is a first step; finding ways to bring about this kind of change from within is an ambitious next step but should be the aim of every insurance company looking to advance into the industry of the future.

This article first appeared on the Cake & Arrow website, here. To learn more about how you can bring about the kind of cultural and institutional change needed to deliver true value to your customers, download our recent white paper: A Step-by-Step Guide to Transforming Digital Culture and Making Your Organization Truly Customer Focused.

Driverless Vehicles: Brace for Impact

On June 26, Waymo (Google’s autonomous car firm), signed a deal under which Avis Budget Group will provide “fleet support and maintenance services” to Phoenix-area Waymo vehicles. Waymo uses Chrysler Pacifica minivans to autonomously shuttle Phoenix residents around town. Its first fleet of 100 minivans quickly grew into an order for 500 more.

The Waymo/Avis agreement may only be a pilot, but the implications are enormous. Not unlike standard cab companies, Waymo realized that a fleet of autonomous vehicles would need cleaning and maintenance throughout the day and storage throughout the night. When practical matters like auto cleaning and storage become news enough for a press release, something big is going on.

Here are some fun facts:

  • According to USA Today, Avis’ stock rose 14% on the news.
  • The Chrysler Pacifica was chosen, in large part, because it could close its own doors. Waymo usage experts theorized that riders might often hop out and forget to close the door.
  • Within hours of the Waymo announcement, Apple likewise unveiled a deal where Hertz Global would manage its autonomous fleet.

Autonomous vehicles have picked up the pace of disruption over the last two years. What will life be like when the Autonomy of Things takes on many of our everyday behaviors or occupations, like driving? Will we be safer? Will we need insurance? Will auto manufacturers cover accidents via product liability? Who will cover bodily injury or property damage? How will risk products be changed to fit this new model? Is there an insurance right-road to surviving autonomy?

See also: The Evolution in Self-Driving Vehicles  

Is Autonomy Impact Still Underrated?

There has been a lot of talk and certainly a wealth of words written on the impact of auto autonomy, and safety is at the top of the concerns and promises of autonomous vehicles. Insurers are, of course, focused on how autonomous vehicles might cause a decline in the need for auto insurance.

The pace of development, rollout, experimentation and expansion of autonomous vehicles has far exceeded original expectations. In his blog, Peter Diamandis (XPrize Founder) noted that a former Tesla and BMW executive said that self-driving cars would start to kill car ownership in just five years. John Zimmer, the cofounder and president of Lyft, said that car ownership would “all but end” in cities by 2025.

The Wall Street Journal reported in July 2016 that auto insurance represents nearly a third of all premiums for the P&C industry, with projections that 80% could evaporate over the next few decades as autonomous vehicles are introduced, some of them replacing legacy vehicles and some created for shared transportation. At the same time, U.S. government support strengthened in September 2016 when federal auto safety regulators released their first set of guidelines, sending a clear signal to automakers that the door was wide open for driverless cars and betting that the nation’s highways will be safer with more cars driven by machines instead of people.

Those statements, among others, might cause some scrambling. Manufacturers are working frantically to partner with AI providers, cab services and ridesharing services such as Uber, Lyft and Waymo. Naysayers will note that rural areas will be highly unlikely to use autonomous vehicles soon, and it’s true that the largest impact may be in urban areas. But if car ownership were even cut by 5% by 2030, a tremendous number of auto manufacturers and auto insurers would be affected.

Autonomy and its insurance impact isn’t limited to personal autos. Truck company Otto is testing self-driving commercial trucks — a necessary automation that could help alleviate the growing lack of truck drivers. Husqvarna has several models of autonomous lawn mowers on the market. Yara and Rolls Royce are among companies working on autonomous ships. Case, John Deere and Autonomous Tractor Corporation have all been developing driverless tractors.

In nearly every one of these cases, there are safety benefits and disruptive insurance implications, but there are also revenue growth opportunities for those that think more broadly and “outside the box.” From developing partnerships with automotive companies to leveraging the autonomous vehicle data for new services, each offers alternative revenue streams to counter the decline of traditional auto insurance. The key is experimenting with these technologies to find alternative “products and services” and develop an ecosystem of partners to support this, before the competition does.

Share and Transportation as a Service — Insurers May Like

In our report, A New Age of Insurance:  Growth Opportunity for Commercial and Specialty Insurance in a Time of Market Disruption, we cite a report from RethinkX, The Disruption of Transportation and the Collapse of the Internal-Combustion Vehicle and Oil Industries, which says that by 2030 (within 10 years of regulatory approval of autonomous vehicles), 95% of U.S. passenger miles traveled will be served by on-demand autonomous electric vehicles owned by fleets, not individuals, in a new business model called “transport-as-a-service” (TaaS). The report says the approval of autonomous vehicles will unleash a highly competitive market-share grab among existing and new pre-TaaS (ride-hailing) companies in expectation of the outsized rewards of trillions of dollars of market opportunities and network effects.

Welcome to the adolescence of the sharing economy and transportation as a service. Autonomy isn’t the only road for vehicle progress. Vehicle sharing is growing and will remain in vogue for some time. Just as Airbnb and HomeAway have given rise to new insurance products, Zipcar and Getaround and Uber have given rise to new P&C products.

At the same time, a merging of public and private transportation and a pathway to free transportation is in the early stages of being created in the TaaS model. This will shift risk from individuals to commercial entities, governments or other businesses that provide the public transportation, creating commercial lines product opportunities beyond traditional “public transportation.”

Vehicle users, whether they are riders, borrowers, sharers or public entities, are going to need innovative coverage options. Tesla and Volvo may be promising some level of auto coverage for owners of autonomous vehicles, but that kind of blanket coverage is likely to mimic an airline’s coverage of passengers and cargo — it will be limited. Those who lend their vehicle, through a software-based consolidator, such as Getaround, will need coverage that goes beyond their auto policy.

In the past few weeks, we’ve also seen how cyber attacks can undermine freight and shipping, not to mention systems. Nearly all of these service-oriented options will require new types of service-level coverage. Autonomous freight may be safer in transit, but in some ways it may also be less secure.

The lessons appear to be found in brainstorming. Technology is breeding diversity in service use and ownership. There will be new coverage types and new insurance products needed.

See also: Will You Own a Self-Driving Vehicle?  

Up Next … Flying Vehicles

Remember the movie “Back to the Future” and the Jetsons flying cars that were so cool? Well, they are quickly becoming a cool reality. A June 2017 Forbes article says flying cars are moving rapidly from fiction to reality, with the first applications of flying vehicles for recreational activities in the next five years. The article says that, in the past five years, at least eight companies have conducted their first flight tests, and several more are expected to follow suit, indicative of the frenzied activity in this space.

Companies such as PAL-VTerrafugia, AeromobilEhangE-VoloUrban AeronauticsKitty Hawk and Lilium Aviation completed test flights of their flying car prototypes, with PAL-V going further by initiating pre-sales of its Liberty Pioneer model flying car, which the company aims to deliver by the end 2018. This sounds like Tesla and its pre-sales move!

Not to be left behind … ride-sharing companies are aggressively entering the space. Uber launched the Uber Elevate program, with a focus on making flying vehicles transport a reality by bringing together government agencies, vehicle manufacturers and regulators. Google and Skype are entering the space by investing in start-ups: Google in Kitty Hawk and Skype in Lilium Aviation. Not to be left behind, Airbus has unveiled a number of flying car concepts, with plans to launch a personal flying car by 2018. Airbus also plans to build a mass transit flying vehicle…the potential next TaaS option.

So, it pays for insurers to keep their attention on autonomous vehicle trends … because it is more than the personal autonomous vehicle … it is the transformation of the entire transportation industry and will have a significant impact on premium and growth for auto insurers. As we recently found in our commercial and specialty insurance report, the transportation industry is rapidly changing and new technologies may be lending themselves to safety, but the world itself isn’t necessarily growing any safer.

Risk doesn’t end. Insurers will always be helping individuals and companies manage risk. The key will be using the trends to rapidly adapt to a shift to the new digital age. Insurers will need to understand and value new risks and offer innovative products and services that meet the changing needs in this shift during the digital age.

5 Topics to Add to Your List for 2017

As an industry, we are knowledgeable. In fact, I think one could say that insurers may know more about the way the world works than most other industries. We hold the keys to risk management and the answers to statistical probability. We underpin people, businesses and economies world-wide. We have centuries of real-world experience and decades of real-world data dealing with individuals, groups, businesses, property, life, investments and health.

Yet, in 2017, none of that experience will matter unless we are willing to embrace an entirely new field of knowledge. The convergence of technology with digital, mobile, social, new data sources like the Internet of Things (IoT) and new lifestyle trends will make insurers better, smarter and more successful IF we are willing to “go back to school” and audit the class on modern, innovative insurance models, generational shifts in needs and expectations and disruptive technologies.

This class is largely self-taught. Between you, Google, traditional and new media (think Coverager, Insurance Thought Leadership and InsurTech News), social networks and a few hours each week, you can expand your horizon toward the future to become a knowledgeable participant in 21st century insurance. It will help, however, if you know what to search for. In this blog, I’m going to give you five high-level areas to keep tabs on in the coming months. These are the places where technology and market shifts are going to create massive competitive energy in the coming year.

Insurtech, Greenfields and Startups

As of this writing, AngelList (a startup serving startups,) lists 1,069 insurance-related startups. Many of these are new solution technology companies. Others are new insurance companies or MGAs focusing on new market segments, new products and new business models. The influx of capital from venture capital firms, reinsurers and insurers has advanced the proliferation of startups and greenfields based on new tech capabilities. Business model disruption will continue to be mind-boggling, exciting and scary all at the same time — bringing insurtech into the mainstream and powering the industry-wide wave of innovation.

Whether you are sifting through ideas to improve your competitive position, launch a new insurance startup or greenfield, seek partners actively engaged in insurtech or invest or acquire a new technology startup, insurtech companies and their growing numbers are to be watched. Reading through these types of lists will give you a feel for the expansive nature of insurance. You’ll see how marketing minds are turning traditional insurance concepts into relevant products and solutions that fit today’s and tomorrow’s lifestyles. Be inspired to engage in insurtech in 2017, because time is of the essence. For background, start by reading Seed Planting in the Greenfields of Insurance.

See also: 10 Predictions for Insurtech in 2017  

Artificial Intelligence and Cognitive Computing

AI and cognitive computing technologies like IBM’s Watson have been touted as the link between data and human-like analysis. Because insurance requires so much human interaction and analysis regarding everything from underwriting through claims, cognitive computing may be insurance’s next solution to better analyze, price and understand risks using new data sources and add an engaging and personalized advisory interface to their services to achieve efficiency and improvements in effectiveness as well as competitive differentiation. Cognitive computing’s speed makes it a great candidate for underwriting, claims and customer service applications and any task requiring near-instant answers. IBM and Majesco recently announced a partnership to match insurance-specific functionality with cloud and cognitive capabilities. This will be an area to watch throughout 2017.

On-Demand, Peer-to-Peer and Connected Insurance

Trov allows individuals to insure the things they own, only for the periods during which they need to insure them. Cuvva is betting that people will want to have insurance on their friend’s cars during the time in which they borrow them. Slice launched on-demand home-share insurance to hosts using homeshare platforms like Airbnb, HomeAway, OneFineStay and FlipKey. Verifly offers on-demand drone insurance. Insurance startups are filled with companies that are providing insurance to the new spaces, places, behaviors and lifestyles where insurance is needed.

Other startups are using social networks and the Internet of Things to bring parity to insurance, often lowering premiums. Peer-to-peer insurers like Friendsurance and Lemonade put customers into groups where the group’s members pool their premiums, payment for claims come from the pool and, in the case of Lemonade, leftover premium is contributed to social causes. Metromile uses real usage data to provide fair auto insurance premiums.

Here is a space where insurers must keep their eyes open for opportunities. How can P&C insurers cover those who don’t own a car, but who still drive periodically? How will group health insurers help employers lower their rate of medical claims? How will life insurers promote wellness and reduce premiums?  Many of the answers will be found in digital connections, social knowledge, IoT data and an ability to provide timely, instant and on-demand coverage.  For more insight, start reading 2016’s Future Trends: A Seismic Shift Underway and the soon-to-be-released update.

The Revival of Life Insurance

One area that will receive a much-needed insurtech stimulus will be life insurance. The life insurance industry ranks last as noted in the recent research, The Rise of the New Insurance Customer: Shifting Views and Expectations; Is Your Business Ready for Them?, which is likely reflected in the decline of life insurance purchases over the past 50 years. The 2010 LIMRA Trends in Life Insurance Ownership report notes that U.S. individual life insurance ownership had dropped to the lowest rate in 50 years, with the ownership rate at just 44%. As new simplified products are introduced, new data streams proliferate and real-time connections improve, life products are poised to change. Already, new life insurers and traditional life insurers are positioning to use connected health data as a factor in setting premiums. John Hancock’s Vitality is perhaps the best current example, but other players are entering the mix — many simply claiming to have a better methodology for selling and servicing life policies. Haven Life, owned by Mass Mutual, and companies such as Ladder, in California, are reinventing term insurance … from simplifying the product to creating an “Amazon-like” experience in buying in rapid time. Ladder, in particular, uses a MadLibs-type underwriting form that’s not only relevant but fun to use.

The life insurance industry is hampered by decades-old legacy systems and the cost of conversion and transformation is taking too long and costing too much. As a result, look for existing insurers to begin to launch new brands or new businesses with modern, cloud core platforms to rapidly innovate and bring new products to market for a new generation of customers, millennials and Gen Z. As we saw in 2016, most new entrants are aimed at term products that will sell easily and quickly to the underserved Gen Z and millennial markets. New life players and products, as well as existing life insurers, reinsurers and even P&C insurers seeking to capture this opportunity will be interesting to watch in 2017.

See also: What’s Next for Life Insurance Industry?  

Cloud and Pay-As-You-Use

If your company is underusing or not using cloud computing with pay-as-you-use models, 2017 should be a year for assessment. Though cloud use isn’t new, its business case is picking up steam. Search “cloud computing and insurance” and you’ll find that the reasons companies are seeking cloud solutions are evolving.

The case for core system platform in the cloud reached the tipping point in 2016 … from nice to consider to a must have, and it will be the option of choice in 2017. The logic has grown as capabilities have improved, cost pressures have increased and now the demand for speed to value and effective use of capital on the business rather than infrastructure is gaining priority. Incubating and market testing new products in a fail-fast approach allows insurers to see quick success and capitalize on pre-built functionality with none of the multi-year implementation timeframes.

Increasingly, many insurers are taking advantage of the same pay-as-you-use principles of cloud as consumers themselves. They are paying as they grow, with agreements that allow them to pay-per-policy or pay based on premiums. They are using data-on-demand relationships for everything from medical evidence to geographic data and credit scoring. They use technology partners and consultants in an effort to not waste downtime, capital, resources and budgets. They are rapidly moving to a pay-as-they-use world, building pay-as-they-need insurance enterprises. This is especially true for greenfields and startups, where a large part of the economic equation is an elegant, pay-as-you-grow technology framework. They can turn that framework into a safe testing ground for innovative concepts without the fear of tremendous loss, while having the ability grow if the concepts are wildly successful. Major insurance research firms advocate cloud as a smart approach to modernizing infrastructure and building new business models. Keeping cloud on your company’s radar is crucial and good place to start is reading The Insurance Renaissance: InsureTech’s Pay-As-You-Go Promise.

These are just a few of the areas we should all be watching throughout 2017, but the vital step is to take your new knowledge and apply your “actionable insights” throughout your organization, powering a renaissance of insurance.

Make 2017 your company’s Year of Insurance Renaissance and Transformation!

The Implications of Home-Sharing

You don’t have to look hard to find a wealth of headlines about the latest trend in travel.

  • “Home sharing has real benefits for retirees” – MarketWatch – Oct. 17, 2016
  • “New study claims Airbnb is good for Vancouver’s economy” – Global News – Nov. 1, 2016
  • “Airbnb boosts rural Irish economy by €74m in the last year” – Irish Mirror – Nov. 4, 2016
  • “Business travelers will be hit hardest by the crackdown on Airbnb” – Economist – Nov. 4, 2016

And the list goes on.

For some, home-sharing is the best thing since sliced bread. For others, it’s a slippery slope to chaos and anarchy. I suppose it depends on which side of the dollar sign you are on.

For those opposed to this new form of economic exchange, it’s time to get real. Whether we like it or not, home-sharing is here to stay. How we as an industry react to it is a different story.

As insurance professionals, we should be on the right side of this massive shift. After all, it’s changing how people earn money from the largest (insured!) asset they own.

Home-Sharing: a Primer

Home-sharing has seen massive growth in the last few years, specifically among millennials. A survey on the travel site HipMunk found that “74% of millennials have stayed at a vacation rental (such as those available through Airbnb),” compared with only 38% of Gen Xers and 20% of Baby Boomers.

The popularity of home-sharing is undeniable. Airbnb has welcomed more than 60 million guests since its founding in 2008 and is available in more than 34,000 cities across the globe.

Also, did you know that Starwood-Marriott, the world’s largest hotel operator, owns about 1.1 million hotel rooms? Airbnb, on the other hand, has more than 2 million listings. So, consider that in eight short years, Airbnb now has more rooms than the largest hotel chain.

See also: Huge Change in Home Insurance  

Oh, and keep in mind that Airbnb owns zero of those 2 million properties.

Why Is Home-Sharing So Popular?

There are some enticing benefits to home-sharing, both to the homeowners who rent out their homes and to the travelers themselves.

  • Homeowners can transform unused spaces in their homes into assets that create alternative income streams.
  • Travelers can enjoy inexpensive, convenient and local experiences.
  • Travelers who prefer non-traditional holiday destinations can access well-equipped accommodations in unusual locations.

Home-sharing has taken the tourism world by storm in the last few years, and there are many in the industry who are shaking their heads in shock and disbelief. Companies such as Airbnb, HomeAway and Vacation Rentals By Owner (VRBO) are but a few of the big names in this growing industry.

These platforms allow homeowners to monetize their property and rent it out to users of these platforms for a predetermined fee. No more classified ads!

Airbnb Is Taking the Hospitality Industry by Storm

Currently valued at $30 billion, Airbnb is commanding the attention of the global market, with annual revenue expected to reach $900 million this year.

It’s no wonder the company captured the No. 2 position on the CNVC Disruptor 50 List in 2016. According to Beyond Pricing, a pricing service that assists hosts in pricing their listings, Airbnb is seeing exponential growth in the U.S. (with the greatest increase occurring in cities such as New York, up 38%, and Los Angeles, up 32%).

Airbnb has also seen incredible growth in Europe and Asia, with the fastest-growing cities being Osaka, Beijing and Tokyo.

The home-sharing industry has radically disrupted the $100 billion global vacation rental industry, an industry that Research and Markets analysts are predicting will reach the $170 billion mark by 2019.

It’s no wonder that the hospitality industry is sitting up and taking notice.

And so they should…as should other industries, such as insurance carriers, because we will be greatly affected by this change in policyholder behavior.

Home-Sharers Need Specialized Insurance Coverage

Allstate was the first major insurer to broach the subject of home-sharing, offering personal property protection tailored to home-sharing clients.

Traditional homeowner policies don’t cover the risks that owners face when they rent out their properties on a short-term basis.

Yes, many of these platforms have built-in insurance policies, but there are clearly gaps in coverage.

Risks to short-term rental homeowners include:

  • Damage to home/property (both the owner’s and neighbor’s properties).
  • Property theft (there have been reports of owners returning to their property to find jewelry, valuables or electronics stolen).
  • Identity theft: There have also been cases of hosts returning home to find passports, birth certificates or laptops stolen.
  • Personal injury to third parties in the home.

Allstate has called its new product HostAdvantage, and it can be added to the homeowners existing policy for about $50 a year. Allstate currently offers this “top-up program” in Arizona, Colorado, Illinois, Michigan, Tennessee and Utah and is expected to make it available in more states by next year.

Don’t Forget About Travelers!

Not only is there a gap in the market when it comes to homeowners insurance, but there is also an opportunity to create unique travel insurance packages for those who use this new mode of vacationing.

Travelers also face unique risks in the home-sharing industry:

  • Damage to persons or property.
  • Loss of valuables due to flood or fire in rented homes.
  • Injury due to items in the home.
  • Last-minute cancellation by homeowners.
  • Serious hazards such as staying in a home without a carbon monoxide detector, without a first aid kit or with safety issues created because the building is not up to code.

Home-sharing platforms do not physically inspect properties to ensure they are safe. This is something we at WeGoLook are trying to change with on-demand inspections, but that’s a story for another day.

Insurance carriers of all sizes should anticipate the needs of clients who require additional insurance products suitable for unique home-sharing situations.

See also: Sharing Economy: The Concept of Trust  

Rather than waiting to play catch-up, astute insurance carriers will adapt insurance packages for home-sharing participants on both sides of the equation: hosts and travelers.

Now, I realize that we’ve only touched the tip of the home-sharing iceberg and its impact on the insurance industry. This topic could easily be a 100-page white paper.

However, I trust that we’ve also provided you with food for thought toward developing strategies for enhanced homeowners and traveler insurance policies.

Home-sharing is here to stay, and this is a good thing! Traditional industries simply need to adapt and accept, rather than kick and scream (think taxi industry and Uber).

I trust we all fall into the former category.

The Uberization of Insurance

Our nomination for word of the year is, by far, “uberization.”

This term is used to describe the growing deluge of companies that offer on-demand services from cars to homes to labor, and much more. Many commentators view this economic transformation as a revolution that will see our entire economy shift from one of consumption, to one of access.

And we think they’re correct.

The Rise of On-Demand

The key to an “uberized” economy is where on-demand services meet crowdsourced labor solutions. You see it everywhere. Even traditional businesses are learning new tricks from an avalanche of high-profile acquisitions. Whether it’s Expedia’s purchase of Homeaway, GM’s buyout of Sidecar or Ford’s investment in Lyft, this shift is becoming more undeniable.

On-Demand for Insurance

Now, on-demand services are coming to the insurance industry, the most risk-averse industry, by its very nature. The insurance industry has become more nimble–mostly out of necessity, but that’s a story for another day.

See also: How On-Demand Economy Can Prosper  

Insurance carriers are learning quickly that they need to adapt to the demand of, well, on-demand services. And the integration of the gig economy is the next step in the business evolution of the traditional insurance sector.

Tough Questions for the Insurance Industry

What does the “uber of insurance” mean? What opportunities and challenges does it bring to the industry? The gig economy, sharing economy, 1099 economy, on-demand economy or whatever you want to call it isn’t going away, and consumer participation continues to grow.

Earners, consumers and the old guard of the supply chain are eager to find ways to diversify and optimize business solutions.

How do you satisfy the demand for on-demand data gathering? Claims handling and processing? How does the insurance industry gather the data it needs effectively, efficiently and accurately?

Uber, Lyft, and Airbnb have not only demonstrated that they fill a need in the marketplace, but often they do it better than the traditional options – as uncomfortable a thought as that may be for the old guard in the supply chain.

Can this model work for the insurance industry? It can, and this is how.

Hug Your Smartphone, Save a Tree

Mobile technology is your new best friend when it comes to data gathering for claims handling and processing. The insurance industry is traditionally paper-intensive. Paper is no longer a security blanket, but a wet blanket weighing down processes and impeding efficiency.

Candy Crush and Capturing Data

It’s easy to marvel at the innovation of smartphones from the most addictive apps to the most useful. I won’t get into my Candy Crush addiction; I’m seeking professional help.

The point is to make smartphones work for you and your business processes. Today, smartphones are essential to the daily lives of most of us, providing communication, connectivity, schedules, entertainment and even our wallets. Think about how you can leverage people’s familiarity and affinity for their smartphones by merging it with your smart application development and deployment.

Capturing data has never been easier than point and click…Oops, I mean a finger swipe.

Now more than ever data can be captured, optimized and automatically entered into your data systems and processes. This new process can facilitate the seamless flow of data into business processes without risking it getting stuck to the bottom of someone’s shoe, misfiled, misplaced or eaten by the proverbial dog.

For the notepad next to your computer: seamless data integration at the point of data capture.

It sounds like a dream, doesn’t it?

Sharing Is Caring

First referred to as the sharing economy or the gig economy, the “uberization” of the workforce didn’t originate with Uber. But I’m still voting for “uberization” for word of the year. Merriam-Webster is next on my contact list.

People have always done odd jobs that fit their skill set, hobby, or need. Uber, Turo, Airbnb and WeGoLook through mobile technology have taken this tried-and-true individual entrepreneurship spirit not only to the next level, but to a measurable impact on the economy. Just consider recent sharing economy industry projections made by PwC. I won’t spoil it for you, but you’ll soon be acquainted with the word “mega trend.”

See also: Uber’s Thinking Can Reinvent the Agent  

Crowdsourced labor solutions not only provide diversified earning opportunities, but they also provide options to workers, consumers and businesses alike. Remember our talk about being nimble?

All parties can scale up or down as they choose. They can also select where and how they participate in the gig economy and leverage it to provide for their financial or business goals.

As these on-demand solutions grow, expand and diversify, companies and consumers will have the opportunity to test and identify the best solutions for them, all with a swipe of their smartphone.

Free Market for Solutions

Some will argue the gig economy is the free market at its best, others will argue it’s at its worst. Like anything, it comes back to how individuals and companies strategically apply these solutions to their business challenges.

In the insurance industry, data gathering and claims processing will always resolve around how you can do it faster and better and with fewer mistakes. As the saying goes, “time is money.”

With the help of technology, the reach of smartphones and crowd labor — insurance companies can standardize and streamline data gathering, claims processing and other simple tasks while controlling costs.

For instance, why dispatch an employee across the metro, county, state or even country, incurring all the related expenses, time delays to gather data and take pictures when you can dispatch someone who’s already there?

Not only do you save time travel, and employee productivity, but thanks to the near-universal familiarity with smartphones and standardized mobile apps, you don’t have to train workers.

What if there was an Uber of Insurance? It’s not really a matter of “if” anymore, but of “when” and “how.” The when is now, and the how is through the growing relevance of the insurtech disruption.