Trend #3: Just in time: The majority of the simple covers will be bought in standard units through a marketplace/exchange, permitting just-in-time, need and exposure-based protection through mobile access.
Why can’t insurance work in the same way as Amazon, easy, seamless, one-click, no hassle, managed through your mobile and regular updates?
Actually, this is starting to become a reality. Insurers and start-ups have already taken up this challenge and significant progress is being made.
Aviva, for example, are piloting a home insurance product where customers won’t need to answer any questions and Digital Fineprint will autofill your insurance policy application form for you by using your social media information.
Data availability and technology are enabling ‘blind rating’ of risks by insurance companies, providing guaranteed acceptance and prices to customer through direct or broker-assisted channels.
Insurance still has many consumer challenges to overcome, from a lack of understanding, lack of trust and lack of perceived benefits. If it’s considered at all, it’s often as a grudge purchase. The comment that insurance is sold not bought remains true in many instances.
As the digital economy evolves, the opportunity to change this dynamic will multiply.
The key drivers of this change are:
- Ability to interact with the customer through their mobile in real time
- Ability to offer insurance at the point of sale or time of need
- Ability to tailor the offering to the individual’s specific circumstances (location, time, activity, risk)
- Ability to leverage available information to simplify the process
Innovative start-ups like Insure-A-Thing (IAT)are reinventing the insurance ecosystem by improving customer trust & transparency, and encouraging improved behavior through retrospective premium payments, based on actual claims.
Democrance is revolutionizing the distribution and servicing of micro-insurance products at POS through telcos and Uber-like shared economy technologies.
Other examples of where this is already happening include, Kasko which enables consumers to purchase insurance at the point of sale/demand – it’s relevant, it’s easy and it’s digital. Similarly, Spixii, an insurance focused chatbot knows if you’re in a ski resort and willout and let you know that your travel insurance doesn’t cover extreme sports and then allow you to purchase the additional protection – again it’s relevant, it’s easy and it’s digital.
Our view is that many relatively simple personal lines products will evolve over time to these types of interactive model. Rather than standard policies covering fixed periods of time, these new products will switch on and off for the period they are needed and will cover the specific circumstances/risk. This will encourage adoption at more affordable prices and importantly demonstrate that insurance is providing real value when it’s most needed.
The sharing economy is a further example of how innovative insurance solutions are being developed to meet new and emerging consumer needs. Start-ups like Slice and Oula.la are looking to provide tailored insurance protection for Airbnb property owners that switch on and off to cover the period when the property is rented.
See also: Insurance Coverage Porn
We also expect to see market place or exchange platforms being developed to help facilitate the process. Again, this is already happening. As an example, Asset Vault allows customers to log their physical and financial assets in a secure online repository and can then help customers find and tailor optimal insurance coverage based on their specific circumstances.
We hope you enjoy these insights, and look forward to collaborating with you as we create a new insurance future.
Next article in the series: Trend #4: Solutions will continue to evolve from protection to behavioral change then to prevention – even across complex commercial insurance