Tag Archives: Knip

Insurtechs: 10 Super Agents, Power Brokers

Insurers should aspire to give their agents and brokers superpowers. Superpowers? Think of the impact of speech-to-speech language translators that free you from having to learn foreign languages. Of GPS car navigators helping you find your way without knowing your way. Or of 3-D printers that enable consumers to produce their own products. Those kind of superpowers. Insurers can deploy technology to empower agents and brokers much more, leading to an even better experience and performance. For instance, by combining and integrating robo-adviser systems with human agents and brokers, insurers can deliver better conversations and higher customer satisfaction, which result in better advice and higher conversion rates. A hybrid model. The best of both world.

Connecting online customers with offline brokers and agents

Digitization changed the way people research and purchase products. More and more comparison sites enable customers to check prices and services with just a few clicks. Consequently, agents and brokers need to adapt. Yesterday’s tactics become less and less effective, in particular in view of ever increasing customer expectations. But complex insurance products still need extensive explanation, and trust in the insurer. This is where the human factor comes into play. In Germany, for instance, 59 percent of all insurances are researched online, but purchased offline (ROPO), according to a survey by Google and Zurich in 2016. For high value and complex insurance and finance products like health, mortgage and pension insurances, the ROPO share accounts for more than 75 percent of all sales.

Best of both worlds

The past decade has taught us that insurers need to manage the feelings side of their relationship with customers much better. But with new technologies primarily being used to digitize processes, insurers are in danger to become even less human.

Humans inject emotion, empathy, passion, creativity, they are able to smile and surprise, and can deviate from the procedure if needed, which algorithmic systems are unlikely to do at this stage. They have the ability to be kind, honest, friendly, generous, giving; someone who makes time for me, listens to me, keeps promises, goes the extra mile. These talents are essential parts of successful customer engagement. We believe that insurers should create the best of both worlds. By leveraging the latest technologies insurers can create smarter agents and empowered brokers.

See also: Insurtech: How to Keep Insurance Relevant  

Agent and broker empowerment

In this DIA Summer Read we included six insurtechs that insurers should team up with to revamp this channel. Each of these insurtechs supports the agent or broker in different stages of the primary process:

1. LifeDrip offers state of the art automated marketing tools to agents and brokers.

2. Predictivebid built building an advanced AI platform for online customer acquisition.

3. Finanzen.de created an online marketplace for leads.

4. Virado puts the insurance broker back in the middle with an on-demand offer for millennials.

5. RiskAPP allows agents and brokers to seamlessly collect data for risk analysis.

6. Figlo facilitates the conversation between brokers/agents and customers.

These six insurtechs have in common that they all give superpowers to agents and brokers. They give access to capabilities that used to be exclusive to large corporations. With the solutions offered by these insurtechs agents and brokers can move to a next level.

Next generation brokers

We also notice a new kind of broker emerging that taps into the needs of consumers and insurance carriers alike, leveraging to the max what digital has to offer. We included four of them in this DIA Summer Read:

7. Knip: the personal digital insurance manager.

8. SPIXII: an insurance chatbot designed to speak to consumers just as a person would.

9. Bought By Many: grouping together people with a special similar insurance need.

10. PolicyGenius: reveals the gaps and overlaps in your policies.

DIA Munich

Expect DIA Munich (15 and 16 November) to pay ample attention to insurtechs that make smart agents and power brokers.

Agent and Broker Empowerment

1. LifeDrip: The future of life insurance agent’s sales software

The world is going mobile but most insurance brokers and agents still use ‘old’ marketing methods to generate leads. It is time for something new and something smarter.

LifeDrip, launched by the Seattle based software company Xeddy, is a turnkey, fully automated mobile marketing system exclusively built for the life insurance agent. It provides monthly, custom branded email newsletters and an exclusive agent website for generating client reviews and feedback.

LifeDrip captures the fastest growing form of lead exposure, including Facebook, Google+, Twitter and LinkedIn. It is done automatically and the contacts and the database are continuously synced. Agents don’t even have to think about it. LifeDrip offers a new way to generate leads at a fraction of the cost. The SEO website is registered with Google and built with responsive code so it is viewable on any mobile device. To maximize Social Media marketing exposure all the required content for Social Media Marketing and Email Newsletters is automatically generated and customized specific to the agent’s sales specialties. The Recommendation Engine generates dozens of powerful and real client recommendations. SplashTriggers notifies instantaneously when a prospect is ready to be contacted for the sale and what to sell them.

Read more: http://bit.ly/2vniEFD
Check demo: http://bit.ly/2irgVOG

2. Predictivebid: the bidding platform of the future for insurance

Predictivebid is a Tel-Aviv based tech company, building the most advanced AI platform for online customer acquisition through Search & Social campaigns based on Life Time Value Measurements. They excel in lead generation campaigns, lead quality analysis and lead potential scoring, thereby optimizing the lead process and helping companies lower their acquisition cost by providing higher quality leads with better life-time-value metrics. Predictivebid bridges the gap between online and offline, helping insurers capture consumers online and then directing them to book a meeting with their nearest and most relevant agents. The AI platform connects and tracks potential customers to the right agent nearest to them, based on their location and needs. A costumer can schedule a meeting with an agent, chat with an agent or even send his details so the agent can call him back.

Read more: http://bit.ly/2vdced1
Check demo: http://bit.ly/2wmpXC7

3. Finanzen.de: the marketplace for leads

Finanzen.de, located in Berlin, Paris, Zurich and Bristol, connects lead generators such as online price comparison sites with lead buyers such as independent financial advisers and insurance companies. More than 800,000 leads are annually traded via its industry leading technology platform, using real time auctions and real time lead delivery. The company also acts as an online broker for P&C insurance products. Thanks to its scalable business model, finanzen.de is ideally positioned to benefit from the digital shift occurring in the European insurance and banking domain and to capture the significant market potential ahead.

Founded in 2004, Finanzen.de is one of the oldest and at the same time one of the most successful InsurTech companies. Finanzen.de generates about one million online leads per year for more than 20,000 insurance experts and financial consultants. Finanzen.de informs consumers about insurance and finance topics and offers interested customers free access to the best possible advice. In the search for suitable offers, visitors can perform neutral tariff comparisons. If they find a suitable offer they can close a contract directly online or receive advice from audited and evaluated experts.

Read more: http://bit.ly/2nZAR9C
Check demo: http://bit.ly/2xrmr6j

4. Virado: One app. 250 niche product insurances for Millennials

German tech startup Virado is successfully creating new sources of income for insurance brokers. By offering 250 insurance products, mainly for niche policies on one platform. Targetting German Millennials. For example, insurance for an apartment share, DJ-equipment, or a travel backpack. These kind of products were not available for the insurance broker due to high connection and transaction costs of the insurer. The Virado all in one app for smartphones and tablet is based on Virado technology. The on-demand platform offers insurance brokers structured access to all insurances. Easy. Fast. Free.

Virado puts the insurance broker back in the middle. Millennials do not use a traditional insurance broker. They go online to find an insurance solution to fit their lifestyle. The on-demand platform Virado puts the insurance broker back in the middle by giving him the opportunity to not only protect but also to create new sources of income by serving the Millennials with insurance products they need. ‘On the spot’ insurance products will significantly increase the customer’s loyalty and customer lifetime. The tech startup offers also digital business expertise and the app is suitable for the insurance brokers homepage and its own social media channels.
Virado is completely free of charge and user-friendly. All the insurance broker needs to do is download the app and register.

Read more: http://bit.ly/2w23mbh
Check demo: http://bit.ly/2wmAGg5

5. RiskAPP: Risk assessment by agents and brokers

RiskAPP is a new Risk Assessment tool created to assist insurers globally. RiskAPP is a unique platform for structured data collection and integrated risk assessment. RiskAPP helps insurers to use captured data from their prospects and clients to sell and underwrite the risks wisely and profitably. The RiskAPP is a complete Risk Assessment tool for the insurer that wants to win his challenges.

RiskAPP delivers the most complete risk assessment possible. Through the platform the insurer can offer the most remunerative coverage program giving safety and peace of mind to insurance clients and the insurance carriers. The sales process is now smooth and seamless.

When the broker has the first meeting with a prospect, the RiskAPP data collection helps the broker to engage the client. The process follows with the technical inspection where the loss preventionist gathers further technical data that clearly describes the company. RiskAPP, thanks to its proprietary algorithm, processes the data collected and elaborates a detailed report included with automated loss protection recommendations. The insurer now has access to the most complete risk profile of the insured. RiskAPP enables analytics, portfolio management and helps in increasing the efficiency of risk selection.

Read more: http://bit.ly/2wDxoon
Check demo: http://bit.ly/2vnQtX4

6. Figlo: facilitating the conversation with customers

AEGON Turkey uses the Figlo platform to facilitate the conversation between brokers/agents and customers. A tablet app guides the complete conversation and gives a quick and tailored overview of the customer’s financial situation to select suitable products based on the client’s risk profile, to cover possible shortfalls. Uğur Tozşekerli, CEO AEGON Turkey: “Customer interaction and involvement as well as the possibilities for illustration and demonstration of the product benefits dramatically increased. From a customer point of view, using the app leads to better and more understandable advice, focus on the real customer needs and on top of that faster service. Straight through processing results in more efficiency and speed of delivery. Apart from a significant improvement of conversion rates the deal size increased between 10 to 45%, depending on the product category. At the same time the operational costs decreased by 18% due to decrease in rework and paperwork. The ROI was already positive in the first year of deployment.”

Quote is from our new book ‘Reinventing Customer Engagement’

Next Generation Brokers

7. Knip: The personal digital insurance manager

Knip is a ‘mobile-first’ digital insurance broker with a simple and transparent solution to insurance; bundling all the customers’ insurance products into one app. Even if these products are from different insurers. An easy-to-understand overview shows existing insurance policies, tariffs and services. One click opens an entire insurance policy. So the important information is always at hand. After an automatic analysis, new customers receive individual recommendations based on their existing insurance portfolio. Upon request, the Knip insurance experts offer professional consulting, analyze tariffs and services and detect individual savings and optimization potential. As the consultants receive a fixed salary and no commission whatsoever, they can provide independent and honest insurance advice. The app is designed to automatically detect individual’s insurance gaps and recommend essential insurance. Knip allows users to change their tariffs, close new insurance contracts and cancel old policies with a simple click.

Read more: http://bit.ly/2wxi65i
Check demo: http://bit.ly/2vXA7YK

See also: What Incumbents Can Teach Insurtechs  

8. SPIXII: Making insurance simple, accessible and personal for everyone

London based startup SPIXII is on a mission to make insurance simple, accessible and personal. It starts by redesigning the way people buy insurance. SPIXII, named after a family of Brazilian parrots that spell out the co-founder’s names, has almost entirely done away with the human component of selling insurance. It is an automated insurance agent, a chatbot accessible via messaging platforms or via a native mobile app. Its app creates a WhatsApp-like chat on a smartphone where a robot will ask simple questions and figure out what the user needs. Built on principles of neuro-economics and the integration of user data with contextual data from multiple sources, SPIXII is an insurance chatbot designed to speak to consumers just as a person would.

Read more: http://bit.ly/2xrFfT9
Check demo: http://bit.ly/2sxsubF

9. Bought By Many: grouping together people with a special similar insurance need

Bought By Many uses a combination of search engine optimization and social media to group together people who have similar insurance needs –such as diabetic travelers, pug owners or homeowners in flood risks areas. They present that group’s requirement to the insurance industry and negotiate on behalf of the group to bring them a better deal than they can get on their own. A better deal might be better pricing, it might be more tailored benefits, or it might be both. Once they bring the offer back to the group, individuals buy directly from the insurer on the better terms that Bought By Many negotiated for them. Creating a win-win for everyone. Insurers only write the risks that they want and members of Bought By Many get a better deal.

The company finds niche groups by looking at Google search data to see which niches have high volumes of search queries. There is also a data entry box on its website letting people submit their own policy ideas. They then validate those segments through social media and engaging with niche blogs, Facebook groups and other stakeholders. The site makes it easy for users to use social media and invite friends to join via Facebook, Linkedin, Twitter and the like. Having established the market, the company works out the group’s specific requirements and then approaches the insurance companies to negotiate a deal on a policy.

Bought By Many suggests to insurers to split the usual broker fee in three parts: one third for the Bought By Many members to get a better benefit, one third for Bought By Many and one third for the insurance company, because Bought By Many want you to want to do this business.

Read more: http://bit.ly/2wmz8CB
Check DIA keynote CEO Steven Mendel: http://bit.ly/2v4hvrz

10. PolicyGenius: revealing the gaps and overlaps in policies

PolicyGenius for instance addresses the uncertainty of consumers with regard to gaps and overlaps in the various policies they have purchased over time. PolicyGenius offers a highly tailored insurance check-up platform, where consumers can discover their coverage gaps and review solutions for their exact needs. PolicyGenius’ online store includes solutions from life and long-term disability to pet insurance. Quoting engines offer side-by-side comparisons of tailored policies. PolicyGenius is backed by AXA Strategic Ventures and AEGON’s Transamerica Ventures. What would happen if AXA and AEGON would open up the PolicyGenius platform to all its brokers and agents in all countries she has a presence?

Read more in our new book ‘Reinventing Customer Engagement’.

The New Insurance Is No Insurance

Insurers are aware that technology will help to reduce claims drastically and therefore finally run premiums down to unsustainable levels.

Time to move on

“Insurance is a cornerstone of modern life. Without insurance, many aspects of today’s society and economy could not function. The insurance industry provides the cover for economic, climatic, technological, political and demographic risks that enables individuals to go about their daily life and companies to operate, innovate and develop.” Source: Insurance Europe

I fully support this, but the way this cornerstone fits into modern life needs attention. It’s time to move on.

See also: Insurance Coverage Porn  

The Third Wave

Twenty years ago, I set up the first digital insurance. Ten years ago, I set up (again the first) mobile insurance Now we’re heading for the third wave: connected insurance.

Real connected insurance with the new opportunities that technology brings is what I (with a few former colleagues) believe in and have been working on for some time now.

Of course: “IoT,” “data science,” “AI,” “customer-centric” and “on-demand” are the buzzwords. But let me add two: “holistic” and “transversal.”

“Holistic” refers to the complete modern household with a connected lifestyle and “transversal” to the consumer who is completely not interested in our industry verticals.

Insurance has to stay but with an overall and fresh approach. Hundreds of insurtech initiatives are currently taking pieces and add sometimes compelling features. See the Sherpa-Neos-Interpolis-Trov-CBien-Metromile-Vitality-Clark-Knip-PolicyGenius-Lemonade-Inshared-like initiatives.

The real challenge is to bring it all together to a compelling, simple, transparent and engaging full service offer to the customer.

Focus on prevention

The new insurance is no insurance — meaning the focus should not be on pushing insurance products but on offering prevention services.

For this we developed an international concept for smart protection called InConnect, with the household as hub connecting all smart devices, vehicles and wearables and with technology and data used to improve prevention.

Safety and Peace of Mind

Unbiased personal risk management tools (Primes) help reduce insurance to what is really needed in one universal personalized policy without redundancies and gaps, dynamically adjusted to the actual situation and needs with:

  • On-demand add-ons
  • Built-in loyalty and reward system
  • Ready connections for sharing cars, rides and homes
  • Easy combining or splitting households
  • Privacy and cyber risk recognized

and backed with a one of a kind insurance and claims IT platform.

Startup

The overall concept is quite ambitious. Although we’ve successfully done ambitious businesses before and have qualified people and technology on our side, we’ll start on a controllable scale. A startup will kick off in three European countries with home, motor and travel.

As soon as we’ve completed our search for the right partners, we’ll start proving the concept, do the learning and keep you posted. Of course we’re always looking for enthusiastic and good individuals. Feel free to give me a buzz.

See also: The Insurance Model in 2035?  

Finally

Insurers are experts in risk and capital management, and that is what they should keep doing, but in a different perspective. Deploy that expertise in the new environment of connected lifestyles.

An Eruption in Disruptive InsurTech?

I attended an InsurTech “boot camp” at the magnificent Christ Church, Spitalfields, U.K., my first such event, and I was intrigued to see what would be presented and how the audience would react.

The organizers billed the day’s theme as “Experience the Eruption.” Their website stated the aim was to “recognize the fast-paced appearance of insurance start-ups, which are creating seismic shifts behind the scenes that will lead to the emergence of a new identity within the insurance sector as we know it today. An ‘eruption,’ which will allow new disruptive entrants to break out into the mainstream and support an industry that needs to engage differently in a highly customer-centric and digital-friendly world.”

Was that lofty ambition that labors excessively on hyperbole, or did the afternoon live up to the hype?

The format of the afternoon was a series of Dragons’ Den (a U.K. TV show) style pitches (without the interrogation) for investment or partnerships from the incubated firms selected for Startupbootcamp’s program (which includes investment from them, meaning there is an element of self-interest that firms do well). The pitches were preceded by a fireside chat from the chief strategy officer of Knip, a Swiss-based app that acts as a portal and broker for insurance policies.

See Also: InsurTech Forces Industry to Rethink

Were any truly disruptive? My view is that they all fell into one of three broad camps of focus:

Distribution and Sales

I’d put four firms in this bracket: MassUp, Spixii, Buzzmove and MyFutureNow — but all had a different focus with different levels of potential disruption.

MassUp was all about making buying insurance for “stuff’ easier by making it an add-on for any purchase. The company had a good story and was slick, but it didn’t feel truly disruptive. Credit card companies have been offering similar protection for years, and MassUp will do well to distinguish itself from extended warranty products that savvier consumers tend to decline. That, perhaps, is the problem with the business model for me — while tech may make it easy for the consumer to purchase the insurance (and for sales companies to add it as an option), it doesn’t obviously increase the value for the customer.

BuzzMove is a successful online removals broker, a portal to help customers find a removal firm when they move houses. The company has added to its capability by recognizing that a key element of quoting for removals is an inventory of the things that need to be moved. Typically, individuals don’t do this when they take out contents insurance (or, indeed, don’t update it when they buy new things), so they run the risk of being under-insured. Linking the life event with an inventory that can be used to underpin an insurance quote is a smart way to add value to the customer — without additional effort. As such, it is effectively looking to take over the customer by owning the life event in the same way banks have looked to do — e.g. take out a mortgage, and they will try to convince you to re-visit your life insurance levels. As such, the concept is not disruptive, but the concept of the home inventory and the tech underlying how this is put together is something insurers (and others) will undoubtedly embrace, so it is therefore significant. I’ll return to this later, as the ownership of this data becomes key.

MyFutureNow has a reasonably simple proposition; it is an online portal for customers to manage disparate pension plans by consolidating them into a single plan that is offered through the site. On the surface, its proposition is attractive and is reinforced by a slick implementation of the website and the app — the economics are being driven by a percentage fee on the value of the pension fund when transferred in. The key to success will be to differentiate the consumer experience. However, as regulated financial advisers will tell you, this is a complex area, and the consolidation of old plans is not necessarily the appropriate outcome for all consumers. It is unclear to me the extent to which MyFutureNow has have thought through the compliance and advice issues. Again, the focus is to try and take over ownership of a particular part of a customer’s portfolio (in this case, pensions).

Spixii’s proposition was timely, what with Facebook’s recent announcement of the addition of “bots” to its Messenger app. Essentially, Spixii offers a message bot that sells insurance (currently just travel insurance, but the concept could obviously be extended quite easily.) Inevitably, all financial service providers will add bots as way of communicating and selling, as will the price comparison websites, so this is definitely an “on-trend” area to watch.

Customer Experience

Three firms fall into this category: RightIndem, Domotz and Quantifyle.

RightIndem looks to enhance claims management by allowing insurers to offer a self-service claims platform and by increasing the transparency of the claims process. Claims is an area consumers point to as frustrating, so any steps to enhance the offering will be hugely positive; it is an area we will see all insurers developing in the coming years.

Domotz is a little more difficult to classify as it is not strictly an insurance proposition. The company plays in the space of the Internet of Things and the smart home. The insurance angle is providing information to the customer that will help reduce claims through smart home management (e.g. the customer gets an alert if running water is detected and nobody is home). Insurers might therefore offer discounts to those who install such systems. As such, it is perhaps similar to the wave some years ago when insurers encouraged drivers to fit alarms and immobilizers in their cars before they were standard issue.

Quantifyle’s proposition is based on driving good customer behavior for wellness by motivating people to achieve fitness goals. Insurers have already played in this area — most noticeably Vitality, whose entire proposition is built around rewarding customers for their lifestyle.

Big Data

The last firm presenting is alone in this category, although others touched upon it.

Fitsense­ demonstrated how it can harness the data collected from wearable tech (such as fitness trackers and smartphones) and overlay that with environmental information to provide the insurer insight into a customer’s lifestyle and behavior. Undoubtedly, there is great insight to be had, but the key element here will be the willingness of consumers to adopt and provide that information to insurers. (Location-aware information was also touched on by Spixii, which speculated that its app could provide, for example, travel insurance options that depend on the travel profile of the individual.)

This leads us into the important area of privacy and ownership of that information, with consumers rightly being concerned about the erosion of their privacy. While the youngest generation of consumers are likely to be increasingly less concerned, the adoption will need to happen slowly to bring customers along. There is also the risk of consumer self-selection (similar to the current adoption of “driving standards” apps by motor insurers), and it raises the moral question of whether increasingly individualized risk pricing is at odds with the original insurance principle of pooling of risks.

So, What Was Missing?

Invariably, InsurTech “innovation” majors on the three areas highlighted above — they are usually the easiest to move elements of the insurance process forward into the digital world but, therefore, are not necessarily disruptive, instead shifting the margin of current offerings. Two areas of development were conspicuous by their absence:

Peer-to-Peer insurance

This is an area where there are a few start-ups dabbling, but they haven’t yet reached any critical mass. Key inhibitors are traditional barriers to entry to the world of insurance, namely regulation and, in particular, capital requirements. It is a fast-moving area and one where, potentially, blockchain technology will grow out of its hype to provide a compelling proposition that satisfies regulators. In particular, recent work suggests that using the Lloyd’s of London model as template and porting to a blockchain model could provide the tipping point.

Consumer-Owned Risk Assessment

While big data has been touted as a way for insurers to get rich, detail on their customers and individualized risk assessment (which, in and of itself is simply a further iteration of the traditional model with more data) leads to issues of privacy and the moral question of individual versus pooling of risk. There is a paradigm shift in the interaction of consumers with institutions in the digital age that isn’t reflected here — that in which the consumer has more power and takes ownership of his or her own data. As such, this could break the mold of the traditional insurance product silos and be truly disruptive. In the new age, the dynamic is reversed, and the richness of data and the assessment of risks an individual faces do not belong to the institution — instead, control is with the individual, who, in turn, get the insight that allows them the power to manage a risk profile.

See Also: A Mental Framework for InsurTech

This shift has started in wealth management, and it seems natural that insurance will follow. New players in this sector will not be the traditional insurer, as the focus will need to be on providing the value to the consumer with the ownership of the data and allowing the consumer to manage it. This sits more easily with the business model of companies such as Google or Facebook than with the incumbents in the insurance market.

Conclusion? 

Nothing I saw in these presentations made me believe this group of companies would be genuinely disruptive (or, indeed made me reach for the checkbook to invest). When compared with the broader FinTech spectrum or tech-centric events, the afternoon felt less slick and less innovative. InsurTech is still young, so there is still a lot of maturing to do, but there were one or two hints from these companies that may stimulate discussion, which, in turn, might lead to genuine innovation.

InsurTech Forces Industry to Rethink

Actors in the insurance industry put the whole sector under universal suspicion in the minds of customers.

Customers want to be able to identify with a company. This can only be achieved by successful branding campaigns that target establishing a relationship between the company and the consumer. If consumers agree with the values a company stands for, they are more inclined to trust the company. Young companies have the advantage of a fresh start; while traditional insurance carriers, as well as traditional insurance agents, are suffering a decline in reputation and need to win back trust, young companies can position themselves as an alternative to an unpopular industry and therefore benefit from unbiased consumers.

See Also: A Mental Framework for InsurTech

In a way, InsurTech start-ups can provide a more personal service than traditional agents can, making use of marketing and branding advertising, as well as social media presence and availability. This becomes increasingly important as customers will use a vast variety of channels to interact with their insurance agent — brick-and-mortar agents will have a hard time keeping up.

Besides reputation, the use of technological advances will be an essential determinant for the success of insurance agents. As consumers use more and more online sources or digital agents to manage their insurance policies, local insurance agents will become less important. A report recently released by consulting firm McKinsey includes a chapter on “the end of an era for the local insurance agent.” This sums up the future of traditional, analogue agents, whose business model will no longer be able to withstand innovative alternatives. In addition to digital solutions and mobile-first applications, traditional agents will face competition from insurance carriers that will focus more on establishing a direct relationship with their customers and will gradually factor agents out of the equation.

Technology and simplification are changing nearly every aspect of our lives. Customers have become increasingly used to managing everything from shopping to paying bills with the help of apps. Our always-on culture is bringing more customized options into the very personal areas of finance through technology. Therefore, managing insurance policies offline is beginning to seem like an unnecessary and tedious task. Comparing insurance online has been popular ever since the first portals came up, but the gap in consulting was harder to close. Insurance brokers watched the onset of insurance portals with ease, knowing those portals were unable to provide advice for the mostly helpless customer when it came to insurance.

However, the development and distribution of insurance apps that offer an easy-to-understand overview of complicated insurance products, as well as independent advice, led to fierce competition on the insurance market. Consumers don’t want to store tons of paperwork in large folders and block out their spare time to meet their insurance agent for coffee. As a result, these agents are losing customers to the innovative alternative. New players provide comprehensive services, replacing traditional broker services and thereby replacing traditional agents who do not have the resources to develop the tools necessary for better customer service. The new market players figure out what kind of solution consumers want and need, and they adapt accordingly. This can only be forced by pushing into the market and spending money — investors’ money that established companies usually do not have.

Providers of mobile-first insurance solutions drive change in the insurance industry with a clear focus on advisory automation and mobile service experience. Apps like Knip do not just use technological advances as an addition to traditional services; they change the business model the insurance industry is based on, following a consumer-friendly approach and making products more transparent. That benefit will be hard for traditional brokers and insurers to copy. They can implement technological features and develop their own apps, but their business is based on sales rather than advisory, which will make them lose customers to more innovative companies.

Both traditional agents and insurance carriers are pondering this development. Their inflexible organizational structures will be hard to overcome to provide more technology- and customer-oriented services. Sure, traditional brokers and advisers will still be needed as technology advances. Some people prefer to welcome their insurance broker in their home and would not dream of a mobile customer-broker relationship. Yet, this group will continue to shrink and become more specialized with time, something everyone working in this sector should be aware of. Only the best of the best of the traditional brokers will survive, be it because of their special expertise, their marketing and brand advertising success or their operational efficiency. Consumers are so used to digital products they will not hesitate to punish any provider that cannot or does not offer them such.

There are still some challenges ahead for start-ups and innovative companies; patience and persistence are crucial. As they are innovating in a very traditional industry, not everyone is excited about digital solutions — mostly because they don’t know what to expect. Informing and educating are important to overcome this fear. It might take a while, but it is starting to work.

See Also: InsurTech: Golden Opportunity to Innovate

What everyone needs to be aware of is that ignoring the development will not end it. Those who turn a blind eye to it now will end up being left behind. Ten years ago, online banking was something extraordinary. Today, it is hard to imagine life without it, and very few people still fill out transfer forms at their local bank. This development will continue with more innovative ideas and more technological progress. Insurance is undergoing the same process, and, a few years from now, it will be perfectly normal to manage policies online and via mobile. The insurance industry realizes it needs to adjust to customers’ expectations if it does not want to be left behind.

digital innovation

The 7 Colors of Digital Innovation

InsurTech is now established in a class of its own, no longer a sub category of Fintech. In 2015, $2.65 billion of venture capital was invested in InsurTech. We now have InsurTech-focused accelerators, with the excellent Startupbootcamp in London, the Global Insurance Accelerator in Des Moines, Iowa, (about to start its second cohort) and Mundi Lab announcing its start-ups for its insurance program in Madrid.

In the past year, I have interviewed more than 50 InsurTech start-ups, and I have seen the full spectrum of characteristics and common themes that run through these innovative digital insurance businesses, which i call:

From Distribution to Data, the Spectrum of InsurTech

Red – Distribution

Distribution is all about making insurance easier to buy, consume and understand. Innovators put the customer first and build their insurance proposition from the customer out (unlike incumbents, which organize their business around internal capabilities).

These start-ups are all about the customer, and their propositions are characterized by convenience, on-demand, personalization and transparency (and, of course, digital).

Examples include;

  • Bought by Many
  • Knip
  • Cuvva
  • Insquik
  • PolicyGenius
  • Moneymeets

Orange – Enterprise

Here we see a new breed of enterprise-class software providers. These are software as a service platforms running on the cloud. They have consumption-based pricing models that replace the traditional, million-dollar, up-front license fee and multi-year implementation.

In the main, these InsurTechs have taken hold of the small and mediums-sized business (SMB) space, but it is a matter of time before they prove themselves as genuine enterprise solutions for Tier 1 insurers.

Examples include:

  • Vlocity
  • Zenefits
  • Insly
  • Surely
  • Riskmatch

Yellow – Mutual 

New peer-to-peer business models return insurance to its roots of mutualization and community. The model relies on the notion that social grouping and affinity will change behavior and address moral hazard (thereby reducing claims payouts and premiums).

The question of scalability still hangs over P2P insurance, but, if it succeeds as a business model, it could form the foundation of a new breed of insurer. Just as kids call to their parents in their hour of need, customers will call to the insurer in theirs.

Examples include:

  • Friendsurance
  • Guevara
  • TongJuBao
  • Lemonade
  • Uvamo
  • Gaggel

Green – Consensus

Blockchain technology will fundamentally change the way the insurance industry works (as well as banking and society as a whole, IMHO).

The promise is huge although as yet unproven. From smart contracts to identity authentication, from fraud prevention to claims management, blockchain technology will provide the underlying technology foundations for a trustless consensus that is transparent to all parties.

Examples include:

  • Everledger
  • Tradle
  • SmartContract
  • Dynamis
  • Blockverify

Blue – Engagement

For me, this is the most significant of the characteristics from InsurTech in personal lines. The product becomes integrated in the customer’s lifestyle. It becomes sticky and overrides the annual buying exercise, where price is the key buying criterion. Digital natives are responding well to lifestyle apps that sit on top of the underlying insurance product.

Examples include:

  • Vitality
  • Trov
  • Oscar

Indigo – Experience

The true value of insurance is only realized when the customer makes a claim. New tech solutions that improve the customer journey through the claims process will not only improve the customer experience, they will also reduce the cost of claims and claims payouts.

Examples include:

  • 360Globalnet
  • RightIndem
  • Tractable
  • Vis.io
  • Roundcube

Violet – Data

This is all about new sources of data to rate and underwrite risk. This is about using data science, machine learning, artificial intelligence and high-performance computing to process data in completely new ways.

While distribution is vital to change the way customers interact with insurers, it is the data players that hold the key to fundamental change in the way insurance is manufactured, especially in personalisztion of insurance premiums and policies.

Examples include:

  • Quantemplate
  • Analyze Re
  • Meteo Protect
  • The Floow
  • Fitsense
  • Influmetrics
  • RiskGenius