Tag Archives: Huckstep

LiveMed Brings Digital Human Touch

Many tasks and actions have been replaced by digital solutions. This is nothing new. However, sometimes nothing beats a face-to-face with a customer. Now, using a VideoTech platform, Silicon Valley start-up LiveMed replicates the physical face-to-face with a digital one.

I’ll start with an event that happened to me last year. I’ll skip the details, other than to say I was required to confirm my identity and sign a document by a department in a financial institution.

With my passport and utility bill in hand, I went in search of a branch (which isn’t as easy as it used to be, even in Central London). It didn’t help that the fax machine at the first branch I found was out of order, so I had to find another one, which I did! After much back-and-forth on the phone between the department, the branch and me, we completed the process, and I was on my way.

What struck me at the time was how out-of-date this financial institution was. Not just technically or digitally but also in terms of customer experience. And it was completely unnecessary.

Digital FinTechs and InsurTechs have been onboarding new clients in less than 10 minutes, without any physical interaction. Identities can be proven and verified in a matter of minutes with background checks, a photo of your passport and a selfie.

The use of eSignatures is widespread. In the U.S., the Electronic Signatures in Global and National Commerce Act is a federal law put in place to facilitate the use of electronic signatures in commerce (long-form definition on Wikipedia, here). In the European Union, the equivalent regulation is the Electronic Signature Directive (see Wikipedia reference here) that defines the use of eSignatures in electronic contracts within the E.U.

Both these legislative frameworks require the same thing, which is that electronic signatures are regarded as equivalent to written signatures.

Given all this, was it really necessary for me to spend several hours inconvenienced and, frankly, wasting time?

Last month, I wrote about the use of VideoTech in the claims handling process In that piece, I talked to InsurTech startup Vis.io about its use of video technology to both reduce cost for insurers and improve the customer experience for claimants.

This week, I move to the front end of the insurance process—client onboarding and policy administration—and talk to LiveMed. To tell me how their solution brings together the use of video, customer identification and eSignatures, I Skyped with Silicon Valley-based co-founder and CEO Yair Ravid.

Ravid explained to me, “LiveMed is a platform that allows financial institutions to confirm customer identity remotely, collect signatures remotely and provide a video record of the customer engagement.”

The way it works is simple.

When a face-to-face discussion is required, the insurer emails a link to the customer. This can be for events such as confirming a customer’s understanding of the insurance policy conditions or witnessing the signing of all parts of the policy agreement.

The customer activates the link and is connected via a live video to an insurance agent. The agent uses the LiveMed platform to conduct a secure, face-to-face discussion with the client. The platform allows documents to be shared between the two parties, which they can both review and amend in real time, before both parties sign electronically and the document is locked down.

The whole session is recorded and kept for several years in case a customer disputes the policy conditions or that he even signed the policy in the first place. (If you are interested in an example of a policyholder disputing an electronic signature, read this article in the Insurance Journal about Bonck v White.)

Knowing whom you’re talking to

While digital facial recognition technology (and other biometric measures) are advanced and sophisticated, humans remain better at visual identification. In some jurisdictions, that remains the only option because biometrics are not yet permitted for identity verification.

“Humans understand the face holistically,” according to the study “The Limits of Facial Recognition” by Tim De Chant. And visual identification still carries great weight in the process of verifying a customer’s identity and in fraud detection. Humans are better at assessing if we are who we say we are or if our claim is suspect.

There will always be occasions when a face-to-face meeting is required to complete a transaction. LiveMed enables this human interaction without requiring the customer to go to a branch or an insurance agent to visit the customer’s home.

More than a VideoTech platform

Behind the video interaction, LiveMed’s algorithms verify the authenticity of documents supplied by the customer. Ravid told me, “When a customer brings in a fake document, we have a high success rate at identifying if it is a fake. We’ve developed a solution that takes real IDs, studies different parameters against them and then compares these with the documents being presented. The institution still relies on human judgment, but LiveMed gives the agent a reliable tool to help with the decision.”

The LiveMed platform uses webRTC, an open-source platform that provides browsers and mobile applications with real-time communications (RTC) capabilities via simple APIs. It also runs as a cloud or an on-premise solution to cater to an institution’s specific requirements and policies on security, data and technology.

It is a device-independent platform that delivers both mobile and web. Ravid explained, “We’ve worked hard to make this very easy to use for the customer. Simply click on the link, go online with the agent, finalize or review the document, open the signature box and then sign with their finger. Simple!

“We take any format document or webpage, whatever, and turn them into a series of pictures. This allows changes, sketches and amendments on the screen by both parties, [in] real time. Then these pictures, or pages, are locked and put together and sent to both parties as a record. We are patenting the technology because we believe it to be unique.”

The old-fashioned ways are no longer viable

Asking a customer to come into a branch carrying paper documents just isn’t going to cut it any more. Nor is the cost of sending a representative to meet the customer. In this digital, mobile age, time is precious, and money is tight.

We are also in the consumer protection age of regulation. Financial institutions need to be able to prove beyond doubt that their conduct is acceptable and that customers fully understand the financial decisions they are making.

This requires evidence both parties can rely on should there be a dispute. (See my previous research notes on RecordSure and its use of AI for compliance monitoring.)

With LiveMed, the finance institution “sees” the person in real time without the inconvenience or cost of a physical, in-person meeting. And because the transaction is completed there and then, the insurer doesn’t have to wait for documents to be sent and processed. And both parties can be certain there are no mistakes (that it’s right the first time) because everything is checked and verified on the video call.

What next for LiveMed?

Ravid is one of three co-founders who bootstrapped LiveMed and took the start-up through the UpWest Labs accelerator in Palo Alto. LiveMed has now raised its first $400,000 from seed funding on its way to raising $1.5 million in a Series A. The minimally viable product (MVP) is built and in pilot with several financial institutions, and the new funding will enable the LiveMed to launch the platform into the U.S. financial services market.

This article was first published at www.dailyfintech.com 

What’s in Store for Blockchain?

Blockchain, blockchain, blockchain! What does that mean for insurance? No one knows yet, but that doesn’t stop blockchain from being one of the hottest topics in the insurance industry right now. This week, I take a look at the direction this puck is heading.

Hype or reality?

Last September, the World Economic Forum published a report titled, Deep Shift – Technology Tipping Points and Societal Impact. The report is based on surveys with more than 800 executives and experts about new technologies and innovations. The point of the report is to identify deep shifts in society that result from new technologies. These include areas such as 3D printing, driverless cars, wearables and artificial intelligence.

I was drawn to shift No. 16, simply called “Bitcoin and the blockchain.” By 2025, 58% of these experts and executives believed we would hit the tipping point for Bitcoin and blockchain. This was defined as:

“10% of global gross domestic product will be stored on blockchain technology.”

To put that into context, the total worth of Bitcoin today in the blockchain is about 0.025% of today’s $80 trillion global GDP.

Also of interest, especially given that it looks like Tunisia will be the first country to issue a digital currency on a blockchain, shift No. 18 was called “Governments and the blockchain.” Here, almost three out of four in the survey group expected that “governments would collect tax via a blockchain by 2023.”

It’s a reality then!

It’s certainly looks that way. And $500 million of venture capital money in 2015 can’t be wrong, can it?

The prospect of a seismic shift on a par with the impact of the Internet is compelling. That explains all the attention, predictions and excitement about blockchain. But, if we use the evolution of the Internet as a benchmark, the development of blockchain today for commercial use is equivalent to the Internet in, say, the mid-1990s, at best.

The debates on Bitcoin, on whether private or public blockchains will be used, on Sybase vs Oracle (oops, wrong century) are yet to play out. The ability of the Bitcoin blockchain to scale to handle massive volumes at lightning speed remains unproven.

Now, just as it was in 1995, blockchain technology is at an embryonic stage. Still finding its way, it has yet to prove it is a viable, industrial-strength, large-scale technology capable of solving world hunger.

That is why I am going to focus on the use case for insurance rather than the technology itself. (For one explanation of how blockchain works, go to Wired.)

The smart insurance contract

This is getting the most attention right now. The notion of automating the insurance policy once it is written into a smart contract is compelling. The idea that it will pay out against the insurable event without the policyholder having to a make a claim or the insurer having to administer the claim has significant attractions.

First, the cost of claims processing simply goes away. Second, the opportunity for fraud largely goes away, too. (I hesitate here simply because it is theoretical and not yet proven.) Third, customer satisfaction must go up!

One example being used to illustrate how these might work came from the London Fintech Week Blockchain Hackathon last September. Here, a team called InsurETH built a flight insurance product over a weekend on the Ethereum platform.

The use case is simple. In the 12 months leading up to May 2015, there were 558,000 passengers who did not file claims for delayed or canceled flights in and out of the UK. In fact, fewer than 40% of passengers claimed money from their insurance policy.

InsurETH built a smart contract where the policy conditions were held on blockchain. Using the Oraclize service to connect the blockchain with the Internet, publicly available data is used to trigger the insurance policy.

In this case, a delayed flight is a matter of fact and public record. It does not rely on anyone’s judgement or individual assessment. It is what it is. If a delayed flight occurs, the smart contract gets triggered, and the payout is made, automatically and immediately, with no claims processing costs for the insurer and to the satisfaction of the customer.

Building on this example and applying it to motor, smart contracts offer a solution for insurers to control claims costs after an accident. A trigger that there has been an accident would come to the blockchain via the Internet from a smartphone app or a connected car. Insurers are always frustrated when customers go a more expensive route for repairs, recovery and car hire. So, with a smart contract, insurers could code the policy conditions to only pay out to the designated third parties (see related article by Sia Partners).

So long as the policy conditions are clear and unambiguous and the conditions for paying are objective, insurance can be written in a smart contract. When the conditions are undeniably reached, the smart contract pays. As blockchain startup SmartContract put it, “Any data feed trusted by a counterparty to release payment or simply complete an agreement can power a smart contract.”

To understand this better, I asked Joshua Davis, the technical architect and co-founder at blockchain p2p InsurTech Dynamis, to explain. He said:

“You need well-qualified oracle(s) to establish what ‘conditions’ exist in the real world and when they have been ‘undeniably reached.’  An oracle is a bridge between the blockchain and the current state of places, people and things in the real world.  Without qualified oracles, there can be no insurance that has any relation to the world that we live in.

“As far as oracles go, you can use either a single trusted oracle, who puts up a large escrow that is lost if they feed you misinformation, or many different oracles who don’t rely on the same POV [point of view] or data sources to verify that events occurred.

“In the future, social networks will be the cheapest and most used decentralized data feeds for various different insurance applications.  Our social networks will validate and verify our statements as lies or facts.  We need to be able to reliably contact a large enough segment of a claimant’s social network to obtain the truth.  If the insurance policy can monitor the publishing or notification of our current status to these participants and their responses accurately confirm it, then social networks will make for the cheapest, most reliable oracles for all types of future claims validation efforts.”

Is this simply too good to be true?

Personally, I don’t think it is. Of course, a smart contract doesn’t have to be on the blockchain to deliver this use case.

However, what the blockchain offers is trust. And it offers provenance. The blockchain provides an immutable record and audit trail of an agreement. The policyholder does not have to rely on the insurer’s decision to pay damages because the insurer has broken its promise to keep the client safe from harm. As the WEF report states, this is an “unbreakable escrow.” The insurer will pay before it even knows what happened.

There’s another reason for going with the blockchain: cybersecurity!

With the blockchain sitting outside the corporate firewall and being managed by many different and unconnected parties, the cyber criminal no longer has a single target to attack. As far as I’m aware, blockchain is immune to all of the conventional cyber threats that corporations are scared of.

What happens when you put blockchain and P2P insurance together?

In December, I published a two-part article on Peer 2 Peer Insurance (here are Part 1 and Part 2). When you put the P2P model together with the blockchain, this creates the potential for a near-autonomous, self-regulated insurance business model for managing policy and claims.

Last year, Joshua Davis wrote an interesting white paper called “Peer to Peer Insurance on the Ethereum Blockchain.” He presents the theory behind blockchain and the creation of decentralized autonomous organizations (DAO). These are corporate entities with no human employees.

The DAOs would be created for groups of policyholders, similar to the P2P group model with the likes of Guevara and Friendsurance. No single body or organization would control the DAO; it would be equally “controlled” by policyholders within each group. All premiums paid would create a pool of capital to pay claims.

And because this is a self-governing group with little or no overhead, any float at the end of the year would be distributed back among the policyholders. Arguably, this makes the DAO a non-profit organization and materially increases the capital reserve for claims costs.

The big question mark for this model is regulation. There still is no answer to who will maintain the blockchain code within each DAO when regulations change. But, what does seem a dead certainty is that someone, somewhere is figuring out how to solve this.

Blockchain offers the potential for new products and services in a P2P insurance model. It should also open insurance to new markets, especially those on or near the poverty line.

For now, we must watch to see what comes from the likes of Dynamis, which is using smart contracts to provide supplementary employment insurance cover on Ethereum.

Innovation will come from new players

It has been my belief for some time that, in the main, incumbent insurance firms will not be able to materially innovate from within. As with Fintech, the innovation that will radically change this industry will come from new entrants and start-up players, such as:

Dynamis

SmartContract

Rootstock

Everledger (see previous article on Daily Fintech)

Tradle

Ethereum Frontier

Codius (Ripple Labs) (update: Codius discontinued)

This is particularly true with blockchain in insurance. These new age pioneers are unencumbered by corporate process, finance committees, bureaucracy and organizational resistance to change.

Besides, the incumbent insurance CIOs have heard this all before. For decades, software vendors have promised nirvana with new policy administration, claims and product engines. So, why should they listen to the claims that blockchain is the panacea for their legacy IT issues? But,  that is a subject for another post … watch this space!

Top 10 InsurTech Predictions for 2016

2015 was the year that InsurTech emerged from the shadow of Fintech. This story has been told through my last 40 research notes published on DailyFintech.com over the past eight months. Including 28 interviews with the CEOs and founders of InsurTechs, this story spans the globe from the U.S. to China, from South Africa to Estonia, and a few stops in between.

So, what does this tell us about the next chapter of this story? Here, I give you my Top 10 InsurTech predictions for 2016.

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In no particular order…

Prediction #1

Insurers will create lifestyle apps that provide additional consumer value on a continuing basis. Continuous consumer engagement will start to replace price as the key buying criterion. The result will be sticky insurance with strong brand loyalty.

Prediction #2

The person-to-person (P2P) insurance business model will struggle to reach scale in its current form. This will drive the P2P insurers to find new ways to replace the traditional carrier model, and we will see signs of a completely new business model for insurance. That will scale.

Prediction #3

Much greater levels of personalized rating will become widely available using new sources of data from technology such as wearables, the Internet of Things and smartphone apps. This will lead to variable premiums over the policy term to encourage better behavior (although insurers will hold back and not introduce corresponding punishments in 2016).

Prediction #4

“All in one policy” cover (aka, all-risks insurance) will emerge for consumer protection. Policyholders will be able to insure their lifestyle (their home, motor, dog, holidays, iPhone, treasures, travel) in a single policy based on highly personalized risk assessment through a digital platform.

Prediction #5

“All in one place” platforms (aka a concierge service) will replace traditional intermediaries with a digital broker. These services will consolidate multiple policies, converge with financial planning tools and provide robo-advice on gaps and duplication in cover.

Prediction #6

New entrants will come into the market with highly sophisticated data modeling and predictive analytics solutions. They will exploit mass-scale technologies, high-performance computing and techniques developed in high-frequency trading.

Prediction #7

Convenience and the ability to digitally turn insurance cover on and off as needed will be steadily accepted and adopted. As will microinsurance, sharing insurance and pay-per-mile. Unit premiums will be higher, but this will be outweighed by Millennial attitudes toward insurance cover and paying a price for convenience.

Prediction #8

The poorest in our world are the ones who need insurance the most. In 2016, the insurance industry will (finally) start to better serve the massively underinsured populations in developing countries. This will be driven by a combination of the massive market opportunity that exists for insurance, global economic forces and a socio-political agenda.

Prediction #9

There will be widespread deployment by traditional insurers of new digital solutions to reduce cost of claims and loss handling. Serving both ends of the insurance workflow, these tech solutions will enable better collection of data and evidence to improve risk rating at the front end and the claims handling processes, especially at first notice of loss (FNOL), at the back.

Prediction #10

2017 will be the year of block chain and insurance. No list of predictions would be complete without reference to block chain, but IMHO it is going to take all of 2016 for the insurance industry to get to grips with what block chain is, what it can really do for insurance and (most important) why we should use block chain as opposed to any other database or enabling technology.

Don’t get me wrong, for I am squarely in the camp that believes “block chain is the next Internet.” And we will continue to see a lot of block chain insurance activity throughout the year. But adoption in insurance won’t take hold until we’ve seen 2016 out.