Tag Archives: platform

Darwinian Shift to Digital Insurance 2.0

Brian Solis, a digital analyst and anthropologist, studies the effects of disruptive technology on business and society, calling it “digital Darwinism.” Solis borrowed Darwinism to describe how organizations adapt to changing customer behavior (anthropological view) and rapidly changing technology through digital transformation. As Solis says in various articles, the effect of digital Darwinism on business is real, and it’s enlivened through evolutionary changes in people in their views, expectations and decision-making.

And we are seeing it rapidly unfold in the insurance industry.

The pace of disruption and dramatic changes are truly evident when we look at Majesco’s first Future Trends report from February 2016 to the second one in March 2017…and now in 2018. This year’s Future Trends report takes a deeper look at the current state of insurance disruptors across people, technology and market boundaries, and how they are pressuring insurers to adapt, pushing them out of their traditional orbits and toward new models and opportunities — “digital Darwinism” — to Digital Insurance 2.0.

The Insurance Darwinian Shift

Majesco’s consumer and SMB surveys show that customers seek “ease in doing business” across the research, purchase and service aspects of insurance. In addition, they are rapidly adapting to the digital age, and they have a rising interest in innovative products and business models emerging in the market, posing a threat to existing insurers.

See also: Digital Playbooks for Insurers (Part 1)  

Startups like Lemonade, Slice, Zhong An, Haven Life, Bought by Many and Neos are embarking on Digital Insurance 2.0 business models using digital platform capabilities and ecosystems that exploit untapped markets and address under- or unmet needs that strengthen customer relationships.

New business models are serving different markets, have different products and services and use different strategies. While customer demographics and expectations, emerging technologies and data, and insurtech have had a majority of the focus, one area that has been a catalyst for these companies to shift to Digital Insurance 2.0 is platform solutions.

Platform solutions provide these innovative companies speed to value, unique customer engagement, a test-and-learn platform for minimal viable products and value-aligned optimized costs. Their platform solutions also catalyze digital technologies and processes, AI/cognitive, cloud computing and an ecosystem, into a powerful new force to expand capabilities and reach well beyond those of the traditional Insurance 1.0 model. They are creating new paths, energizing the market and lowering operational costs.

Digital Adaptation is Just Beginning

As a result, incumbent insurers must aggressively begin to define their vision and path to Digital Insurance 2.0, leveraging today’s catalytic lever, platform solutions.

And Digital Insurance 2.0 is just the beginning. The catalytic effect of platform solutions in the shift to Digital Insurance 2.0 is rapidly evolving, gaining momentum and laying the groundwork for future reactions. Will the next catalyst be blockchain or some other trend that will propel us toward Insurance 3.0?

See also: Digital Insurance 2.0: Benefits  

Insurers’ abilities to adapt and rapidly move to Digital Insurance 2.0 will likely define their future. As such, insurance executives and leaders should ask themselves the following:

  • Are we appealing to customers’ motivations, making our processes simple and creating compelling triggers to act?
  • What is our business strategy, and how are we incorporating a platform and ecosystem approach?
  • In which markets and with what customers will we find our future growth? What will they expect?
  • What is our partnership approach today, and how will it need to change to extend to a broader ecosystem?
  • Is our technology platform the foundation for our growth?

The future is still unfolding. New technologies and ecosystems will continue to emerge. And with those changes, over the next decade, we will likely see the beginnings of Digital Insurance 3.0 emerge.  Organizations will need agility to adapt and respond, a keen focus on innovation that encourages experimentation, and a priority on speed to value to succeed, or even survive.

5 Things to Know on Insurtech Partners

At Bolt, we have been working with insurers since 2000, and I am often asked about the new startups entering the market and how traditional insurers can compete. The first thing I usually want people to understand is that not all insurtech is intent on disrupting the market. Bolt, for instance, is what we like to call an insurtech innovator. Our goal is to partner with existing insurers and help them find answers to the contemporary challenges they face. This explanation naturally leads to the next question I’m frequently asked: What should insurers look for when seeking an insurtech partner?

Finding an Insurtech Partner That Brings Value

The insurance industry is unique. Guarded by strong regulations and financial requirements, it has been relatively closed to new entrants, developing a culture and method of doing business that’s different from other industries. That makes finding a good partner from the growing list of insurtech innovators a challenge.

See also: Insurance Coverage Porn  

Below are the top five factors I think an insurer needs to consider when partnering with an insurtech innovator:

  • Don’t fear change: While insurtech innovators need to understand the complex regulatory environment and the culture of the insurance industry, I also think that traditional insurers could learn a little from the newcomers. Silicon Valley startups, for instance, are at the forefront of cutting-edge technology. Consider the tremendous consumer backing that a company like Apple has, and you realize that these techy new entrants have tremendous insight into what makes the customer tick. Adopting a little of this can take insurers a long way in the customer-centric era, so don’t be afraid of a little give and take when it comes to merging your culture with an innovator’s.
  • Have a plan: Some insurtech innovators are eager to enter the industry and will promise you the moon and stars, but do you really need the whole universe of what they are offering? For instance, most insurers have a strong agent channel, and their customers like working through agents. One insurtech may promise superior results by eliminating agents in favor of a straight D2C play. As we’re seeing with many new insurtech disruptors, consumers want to interact through a variety of channels, so you would be better served by digital capabilities that can support both D2C and agent channels.
  • Avoid the culture clash: I’ve worked in both the technology industry and the insurance industry, so I understand the culture shock that can occur between the two types of organizations. Earlier this year, we attended the Auto Insurance Report National Conference (AIRNC) 2017, where Patrick Sullivan spoke about the wave of insurtech entrants. Based on his experience speaking with many of them, he concluded that the movement won’t change the world, but niches abound. What this means is that disruptors won’t be able to unseat existing insurers, but innovators with a strong insurance background can merge their technological skills with this knowledge to help insurers navigate the changing environment. The key is to find partners with strong industry experience.
  • Support innovation: The insurance industry is well-known for being resistant to change, so it’s important that a spirit of innovation comes from the top down and that leaders support the progressive steps you’ll be taking with an innovator. For instance, at Bolt, we’re always asked by companies that sell products on our platform why they should want to bundle in products from others in our network. We’ve seen companies greatly increase their results by doing so, because they show the customer they are committed to all of his or her needs. But making the commitment to bundle with competitors wouldn’t have been possible without an organization-wide commitment to change.
  • Dedicated resources: Regardless of the change initiative underway, partners can only take you so far. Internal change management is the responsibility of the insurer, and you need to make certain you have a plan, and the dedicated resources, in place to support the new initiative. Over the last few years, we’ve worked with a major insurer on expanding product selection and giving agents access to top digital tools that streamlined the buying process. The company instituted internal ambassadors that led the change and supported agents throughout the transition, ensuring the success of the launch and beyond. The result was a $26 million increase in premiums over two years.

See also: Why AI Will Transform Insurance  

Adapting to the industry evolution underway isn’t going to be easy, but insurers can pave the road to success by partnering with insurtech innovators that have solid insurance experience. By merging their native digital expertise with the ability to support and navigate the industry complexities, innovators can help traditional insurers become top-tier digital enterprises, capable of delivering the customer-centric environment consumers are demanding.

To learn more about partnering with InsurTech Innovators, read our thought leadership piece, How InsurTech Will Revolutionize the PC Insurance Industry: Partnering Into the Future.

Will Brandless Become the Biggest Brand?

The platform economy is becoming a driving force of innovation and growth, as companies create digital platforms to enable interactions between individuals or businesses that need something and individuals or business that provide something. The “something” may be a product, service, money, labor or other asset of value.

The distinguishing characteristic of platform economy companies is that they generally have high market value while owning no assets and having few employees. The world’s largest movie house owns no cinemas (Netflix). One of the largest and most valuable retailers in the world owns no inventory (Alibaba). The largest personal transportation company owns no vehicles (Uber). The list could go on. Amazon, of course, has been the quintessential platform company, although its acquisition of Whole Foods now extends its capabilities beyond digital.

But there’s a new kid on the block of platform-economy companies, and that entrant is Brandless. What is its model? And what does the whole notion of the platform economy have to do with the insurance industry?

See also: Lessons From 3 Undisrupted Brands  

The Brandless Brand

Brandless is a new online grocery retailer with a simple value proposition. Every item for sale is three dollars. The company provides healthy, socially conscious options such as organic, gluten-free, vegan and environmentally friendly products, obtained by fair trade principles. Although the company is not selling name brand items like Amazon and other online retailers do, Brandless is nonetheless connecting suppliers that create the products to buyers that are looking for items with these characteristics. It could be just another of many online-only retailers that are based on a digital platform. Or it could grow to become a dominant force in grocery. The irony is that the biggest challenge it may face is building the Brandless brand, something that is already underway despite the company name.

Insurance and the Platform Economy

There are three implications for the insurance industry from the platform economy overall. First, and perhaps foremost, is how customers and their risks are evolving. Platform companies are reshaping industries, becoming companies with major insurance needs in their own rights while causing incumbents in their industries to rethink their businesses or venture into building their own digital platforms. In addition, the risk profile is different for these platform-based businesses, as they are likely to have huge cyber-risk exposure but limited needs for workers’ comp and property coverages.

The second implication for insurers is that other emerging “economies” such as the sharing economy and the gig economy are based on digital platforms. They are “instances” of a platform economy. For example, the gig economy enables independent individuals to offer their labor and skills to a company or another individual who needs it, with the platform operator taking a fee for making the connection. The sharing economy, in particular, is already important for insurers, as it influences the ownership and use of assets by individuals, such as cars, homes, and bikes.

Finally, insurers must consider the rise of the platform economy models in the insurance industry. The early models tend to be digital agents and brokers, performing a similar function to live agents today, but doing it via modern digital platforms that may be easier, faster and lower-cost than traditional distribution channels. It is generally understood that digital agents will have a big impact on certain segments of the insurance industry. It remains to be seen if the platform economy model will succeed in other parts of insurance, such as for peer-to-peer insurers, claim repair networks or subsets of the gig economy for insurance industry professionals like adjusters and loss-control engineers.

See also: 3 Ways to Boost Trust in Your Brand  

Platforms and the Future

One thing is certain. Insurers should investigate and understand the developments in the platform economy. As many insurers strive to become more digital, the creation of digital platforms and capabilities within the enterprise will position insurers to participate in other dimensions of the platform economy. Brandless may or may not become a big brand, but the momentum for the platform economy is unmistakable and something in which insurers should be actively engaged. Will there be a future platform-based company in the insurance industry that becomes the largest force in insurance without holding any risk or employing any underwriters and adjusters?

How Tech Created a New Industrial Model

With a connected device for every acre of inhabitable land, we are starting to remake design, manufacturing, sales. Really, everything.

With little fanfare, something amazing happened: Wherever you go, you are close to an unimaginable amount of computing power. Tech writers use the line “this changes everything” too much, so let’s just say that it’s hard to say what this won’t change.

It happened fast. According to Cisco Systems, in 2016 there were 16.3 billion connections to the internet around the globe. That number, a near doubling in just four years, works out to 650 connections for every square mile of Earth’s inhabitable land, or roughly one every acre, everywhere. Cisco figures the connections will grow another 60% by 2020.

Instead of touching a relatively simple computer, a connected smartphone, laptop, car or sensor in some way touches a big cloud computing system. These include Amazon Web Services, Microsoft Azure or my employer, Google (which I joined from the New York Times earlier this year to write about cloud computing).

Over the decade since they started coming online, these big public clouds have moved from selling storage, network and computing at commodity prices to also offering higher-value applications. They host artificial intelligence software for companies that could never build their own and enable large-scale software development and management systems, such as Docker and Kubernetes. From anywhere, it’s also possible to reach and maintain the software on millions of devices at once.

For consumers, the new model isn’t too visible. They see an app update or a real-time map that shows traffic congestion based on reports from other phones. They might see a change in the way a thermostat heats a house, or a new layout on an auto dashboard. The new model doesn’t upend life.

For companies, though, there is an entirely new information loop, gathering and analyzing data and deploying its learning at increasing scale and sophistication.

Sometimes the information flows in one direction, from a sensor in the Internet of Things. More often, there is an interactive exchange: Connected devices at the edge of the system send information upstream, where it is merged in clouds with more data and analyzed. The results may be used for over-the-air software upgrades that substantially change the edge device. The process repeats, with businesses adjusting based on insights.

See also: ‘Core in the Cloud’ Reaches Tipping Point  

This cloud-based loop amounts to a new industrial model, according to Andrew McAfee, a professor at M.I.T. and, with Eric Brynjolfsson, the coauthor of “Machine, Platform, Crowd,” a new book on the rise of artificial intelligence. AI is an increasingly important part of the analysis. Seeing the dynamic as simply more computers in the world, McAfee says, is making the same kind of mistake that industrialists made with the first electric motors.

“They thought an electric engine was more efficient but basically like a steam engine,” he says. “Then they put smaller engines around and created conveyor belts, overhead cranes — they rethought what a factory was about, what the new routines were. Eventually, it didn’t matter what other strengths you had, you couldn’t compete if you didn’t figure that out.”

The new model is already changing how new companies operate. Startups like Snap, Spotify or Uber create business models that assume high levels of connectivity, data ingestion and analysis — a combination of tools at hand from a single source, rather than discrete functions. They assume their product will change rapidly in look, feel and function, based on new data.

The same dynamic is happening in industrial businesses that previously didn’t need lots of software.

Take Carbon, a Redwood City, CA maker of industrial 3D printers. More than 100 of its cloud-connected products are with customers, making resin-based items for sneakers, helmets and cloud computing parts, among other things.

Rather than sell machines, Carbon offers them like subscriptions. That way, it can observe what all of its machines are doing under different uses, derive conclusions from all of them on a continuous basis and upgrade the printers with monthly software downloads. A screen in the company’s front lobby shows total consumption of resins being collected on AWS, the basis for Carbon’s collective learning.

“The same way Google gets information to make searches better, we get millions of data points a day from what our machines are doing,” says Joe DeSimone, Carbon’s founder and CEO. “We can see what one industry does with the machine and share that with another.”

One recent improvement involved changing the mix of oxygen in a Carbon printer’s manufacturing chamber. That improved drying time by 20%. Building sneakers for Adidas, Carbon was able to design and manufacture 50 prototype shoes faster than it used to take to do half a dozen test models. It manufactures novel designs that were previously theoretical.

The cloud-based business dynamic raises a number of novel questions. If using a product is now also a form of programming a producer’s system, should a company’s avid data contributions be rewarded?

For Wall Street, which is the more interesting number: the revenue from sales of a product, or how much data is the company deriving from the product a month later?

Which matters more to a company, a data point about someone’s location, or its context with things like time and surroundings? Which is better: more data everywhere, or high-quality and reliable information on just a few things?

Moreover, products are now designed to create not just a type of experience but a type of data-gathering interaction. A Tesla’s door handles emerge as you approach it carrying a key. An iPhone or a Pixel phone comes out of its box fully charged. Google’s search page is a box awaiting your query. In every case, the object is yearning for you to learn from it immediately, welcoming its owner to interact, so it can begin to gather data and personalize itself. “Design for interaction” may become a new specialization.

 The cloud-based industrial model puts information-seeking responsive software closer to the center of general business processes. In this regard, the tradition of creating workflows is likely to change again.

See also: Strategist’s Guide to Artificial Intelligence  

A traditional organizational chart resembled a factory, assembling tasks into higher functions. Twenty-five years ago, client-server networks enabled easier information sharing, eliminating layers of middle management and encouraging open-plan offices. As naming data domains and rapidly interacting with new insights move to the center of corporate life, new management theories will doubtless arise as well.

“Clouds already interpenetrate everything,” says Tim O’Reilly, a noted technology publisher and author. “We’ll take for granted computation all around us, and our things talking with us. There is a coming generation of the workforce that is going to learn how we apply it.”

5 Challenges Facing Startups (Part 2)

The insurance industry is a $4.6 trillion market worldwide, but it lags when it comes to digitization and providing consumers with great experience and service.

We are looking in some depth at the five main challenges that startups are facing. Today, we look at Challenge No. 2. Find Challenge No. 1 here.

Challenge No. 2: Providing real innovation that gives a competitive advantage and that provides real value in the long term will be the only way to prosper.

Innovation can come by improving the consumer experience in buying and using insurance or offering more relevant insurance at affordable and lower prices. In insurance jargon, this involves optimizing risk protection.

Startups can and are focusing mostly on digitizing distribution, especially through a mobile consumer approach. This improves consumer engagement and may quickly generate interest and traffic but ultimately needs to be converted into sales and new customers.

See also: Where Will Real Innovation Start?

Product innovation involves better and personalized dynamic pricing, which means savings for the consumers and providing targeted and relevant risk protection (coverages). Getting new product into the market with limited data and pricing experience will bring risks. This will, of course, be initially mitigated by low volumes.

There is also greater scope for risk prevention. Technology can support consumers by automated monitoring and response, as well as giving real time feedback. In addition, technology provides the opportunity to reduce the claims costs (frequency) impact.

Insurance, at the end of the day, is about service – a payment today for a future promise. Having access to the relevant services during an accident or adverse event is crucial for insured consumers. This includes making it easy to report and pay a claim.

Having a seamless service will be important for the startups’ reputation and operational and innovation capabilities. Startups will need to collaborate and have outsourced arrangements with a range of partners with different mindsets and systems.


Building a robust, full-stack technology platform and end-to-end processes will be critical.

Many startups have started, understandably, with the distribution, and few appear to have fully operating platforms that stretch back into the full value chain of insurance operations from selling, distribution, product manufacturing, policy management toward customer servicing and claims management.

A full-stack technology platform supports a seamless process for the insured consumers, not only in the buying process but also for policy changes and claims handling.

A full-stack technology platform with enhanced data management and analytics at its core will be required in the case of making differentiating, relevant and attractive insurance products and services.

The explosion of data must be translated into improving insurance.

Data needs to be converted into insurance pricing, more accurate prediction of future claims risk and enhanced and innovative risk prevention services.

See also: Innovation — or Just Innovative Thinking?  

Excellent service and product differentiation requires full control.

Startups will need to be in control of not only marketing, distribution and customer experience but also dynamic data analytics, pricing, product development, policy administration and claims servicing. Even if startups do not provide these activities directly and hand them over to outsourced service providers including traditional insurers, they will need interfaces into other systems that may not be as robust as a new platform. In addition, they will need in-house staff to manage these processes. This will take expertise and time to build out.

We are curious about your perspective.