Tag Archives: ridesharing

Why Customer Experience Is Key

Disruption is inevitable, and no organization is immune. Findings from McKinsey suggest that the current pace of disruption is happening 10 times faster than the Industrial Revolution, at 300 times the scale, and with 3,000 times the impact. This is an unprecedented opportunity for businesses to thrive, but at the same time an unprecedented threat to slower-moving organizations, which may end up allowing themselves – or their industry – to be disrupted.

“We are at the precipice of unbelievably powerful advancements driven by technology. We no longer have to ask if we can do it, but if we should do it, and, if we do, how do we do it responsibly,” says Eric Boyum, managing director, technology and communications industry, at Aon.

Embracing disruption – both managing it and anticipating it – is crucial for businesses to thrive during this change. But what constitutes disruption, and how does it differ from innovation? Putting the customer experience first and truly understanding audience needs is critical. From agility to forward-thinking industry trends, established organizations can learn from newcomers and help their teams innovate on behalf of customers – key to thriving amid change.

In Depth

Today, innovation and disruption confront many industries, driven by a host of entrepreneurial firms looking for opportunities to beat incumbents at their own game. The situation becomes even more interesting, however, when entrepreneurs are a leading force in creating a new game.

Boyum, who works with some of the world’s leading technology companies, offers a key distinction between innovation and disruption: “All those that participate in disruptive movements can be considered innovators – however, not all those that innovate are necessarily disruptors.”

Randy Nornes, executive vice president, Aon Risk Solutions, elaborates: “Disruption does not come from typical competitors,” where most companies traditionally focus their defensive efforts. Instead, disruptors often originate from outside the industry being disrupted – which means established players don’t recognize what’s happening until too late. The disruptor then captures and develops a market, eventually unseating incumbents.

See also: Key to Digitizing Customer Experience  

When Apple released its first smartphone in 2007, it probably wasn’t looking to transform the transportation industry. But it turned out that putting a GPS unit in the pockets of billions of people across the world would crack open a whole universe of commercial applications inconceivable to the original inventors. Uber, the paradigmatic “disruptor,” was quick to see the opportunity.

Smartphone technology was available to everyone. Uber’s ability to capitalize on Apple’s innovation and aggressively outpace incumbents in the taxi industry through offering cheaper, more flexible rides, marked it out as a true disruptor. It is now the most valuable private company in the world.

Apple itself was, of course, also a disruptor. It jumped on the then-new technology of file-sharing with iTunes and disrupted (many would say fatally) the physical music retail industry. Spotify, in turn, disrupted iTunes by putting subscription streaming ahead of paid downloads.

It’s not just about innovating and making products better – it’s about anticipating consumer needs. This type of disruption often comes from new players, as opposed to traditional competitors. “The company that provides the most taxi rides does not own any taxis; the company that rents the most rooms does not own any rooms, and the company that distributes the most media does not generate any content,” Boyum says. “These companies are, of course, Uber, Airbnb and Facebook.” They got there not by being the best in their field at providing a certain product but by providing a completely new one.

Data for the People

“We’ve seen entire industries emerge because they promise something to the end-user: a better customer experience,” Nornes says. Uber could have made bigger, plusher taxis. Instead, it correctly saw that what travelers wanted out of their experience wasn’t necessarily luxury but affordability and convenience of a kind that traditional taxis had yet to provide.

Through a data-driven understanding of audience or a market, disruptors seek to prioritize customer experience and work to improve the status quo – often creating a new one. “A lot of sharing economy companies focused on technology and new ways of capturing data,” Nornes says. “In the transportation world, disruptors leveraged the GPS technology that’s inside a smartphone to create a superior service.” In turn, this data has been used in other ways to improve the ridesharing services. An Uber passenger can feed back data via ratings, which the company can then leverage to further optimize user experiences and create a model that is, to an extent, self-regulating.

This data-led process of transformation is set to intensify. By 2020, there could be 20 billion internet-of-things devices worldwide. Understanding the emergent narratives of consumer behavior that this enormous mine of data produces will be the first order of business for tomorrow’s would-be disruptors.

The Ripple Effects of Disruptive Innovation

“The most important lesson to learn is that disruption can happen to everyone – no one is immune,” Boyum says. This disruption can come in many forms, other than direct competition.

Nornes asks: “How do you deal with independent contractors? How will regulations evolve? What are the talent implications – do companies have the necessary disruptive talent to keep ahead of competitors?” Some of the more wide-reaching implications of disruption could include:

Insurance & Regulations: Businesses don’t operate in a vacuum – from insurance to regulations, they are governed by a complex network of secondary services, which will also have to adapt to disruption. Current insurance policies are built on certain assumptions about how customers engage with products or services. Initially, Uber struggled with getting its drivers insurance coverage, as providers had no products that accommodated the unique risks of non-employee drivers – of course, disruption here also means an opening of markets for new products.

There must also be responses to the shifting nature of work in the gig economy. Is an Uber driver a freelancer using an app, or should he be treated – and compensated – as a full employee?

Employment & Talent: Headlines proclaiming an unemployment doomsday at the hands of automation are abundant. Don MacPherson, partner, Global Engagement Practice at Aon Hewitt, frames this as a hiring and retention issue: “Are we still going to be able to bring people into this organization as we’re seen to be shedding jobs that are now obsolete?”

But, he explains, organizations should relish the opportunity to transform their talent and training strategies. Incumbents should look at what innovators are doing: What types of talent are they bringing on? How flexible is that talent? And, perhaps most importantly, are they fostering functions like R&D, which will allow them to leverage their disruptive capabilities in a competitive environment?

Societal Impact: Models that disrupt multiple industries, like the sharing economy, also have widespread societal implications. A firm like Airbnb disrupts far more than just hospitality incumbents. Homesharing can create incentives for more buy-to-rent activity, which causes distortions in rental markets as prices rise. This, in turn, can provoke regulatory responses from local governments – which affect the whole housing landscape, rather than just the operations of one company. And so they have, in Paris, San Francisco and New York.

The onus is on the disruptors to communicate the benefits they bring for all stakeholders. For instance, customers enjoy ridesharing because it’s more affordable and convenient, but reducing the number of cars on the road also helps fight pollution. Similarly, flat-sharing could emphasize the tourism revenue it generates.

See also: Smart Things and the Customer Experience  

Disrupting for Tomorrow

If companies can perform this balancing act – from embracing new technologies, models and services around consumer needs, to preparing for the unknowns that disruption can bring – then they can find huge success in the coming years.

“Disruption is the result of dramatic innovation. And whether business models rise and fall on this is not the point,” Nornes says. Disruption is a bigger trend than the fortunes of an individual company – it’s the rise of new ways, perhaps better ways – of doing things. By recognizing evolving customer needs and forcing new ways of thinking within an organization, companies and their leaders can make sure they are on the right side of history.


The Sharing Economy and Auto Insurance

Carpoolers and hitchhikers were the original ridesharers. Now, ridesharing has become much more sophisticated. Riders and drivers can now be partnered through smartphone applications, which is changing how we think about insurance and liability.

The promise of the sharing economy, people making money from things they already own, is a noble one. Especially during tough economic times such as the 2008 recession, flexible job options in the sharing economy provide many with a financial safety net.

But what do these new collaborative marketplaces, particularly ridesharing ones, mean for traditional insurance carriers? This is a great question, and one I hope to help unpack here.

The Rise of the Sharing Economy

People were tired of waiting long periods for unreliable taxis and poorly run public transportation. The idea of ridesharing quickly caught on and has grown steadily ever since. There’s a reason why ridesharing giant Uber has been valued at more than $60 billion; it’s serving a significant customer demand. And whether we like it or not, sharing economy companies like Uber are here to stay.

See also: 9 Impressive Facts on Sharing Economy  

Although sharing economy platforms have caught on quickly, laws and regulations have been sorely lagging. Many sharing economy companies currently operate in the legal and regulatory vacuum as decision-makers try to figure out how to handle this new form of economic exchange.

The Growing Acceptance of Ride-Sharing

The insurance industry is in a different stage of acceptance, however. Recently, we have seen a growing acceptance by insurance carriers of the ride-sharing phenomenon through the development of innovative policies and products.

Why is ridesharing so popular? Convenience. Instead of having to pick a taxi company, calling them and waiting an untold amount of time, ride-sharers can now log into a smartphone app to book a ride. Once a driver accepts, you can see in real-time where your driver is, and even communicate with him.

An advantage of ridesharing is that you don’t have to exchange cash or card information for payment. Most ridesharing apps allow you to prepay into an account and simply deduct the amount of the ride from that account. Or, even connect your credit card to your account for a seamless transaction.

And insurance carriers are catching on. For instance, Aviva, State Farm, GEICO, Intact and others, have introduced hybrid rideshare specific policies for those who want to drive for Uber or Lyft.

But there are other aspects of auto insurance coverage that relate to the sharing economy: car-sharing.

The Growing Acknowledgment of Car-Sharing

For car-sharing, instead of sharing rides, users share the use of their personal vehicles in much the same way as a car rental agency operates.

The biggest car-sharing platform is Turo, which allows people to rent out their vehicle to screened drivers for a fee. Think of it as a car rental agency, but on the individual level.

Both car and ridesharing platforms have built-in insurance, but many questions have been raised as to liability in a sharing world.

The Issue of Insurance Coverage

There are certain stages of engagement in sharing economy work like ridesharing. When you are matched with a passenger, pick her up and drive her somewhere, there is no doubt you are “working.” What about when you are waiting for a passenger? Or driving around looking for one? Are you covered then? And which coverage counts, yours or the platform’s?

But for the most part, these issues have been settled through innovative gap coverage and hybrid policies.

A problem arises, however, in the form of insurer knowledge. Many sharing economy workers don’t realize that they’re not covered under traditional auto insurance policies. By definition, paying for the use of a vehicle, whether it’s an Uber ride or renting someone else’s car, is a commercial transaction.

See also: Why to Embrace the Sharing Economy  

That means that private insurance won’t cover you for accidents or incidents involving the vehicle in question if the vehicle is being used for commercial sharing. That can be a rude awakening. Educating ride-sharers must be priority number one for sharing economy platforms and insurance carriers.

Unfortunately, the law hasn’t caught up to the sharing economy. In many jurisdictions for instance, ridesharing is still illegal even if you have the right insurance coverage.

That is changing, however, as municipalities ease restrictions and slowly change laws to get with the times. Remember, the sharing economy is here to stay, and we must get on board, safely of course.

The insurance industry is ahead of the curve, and will be much better once municipal, state and federal decision-makers better understand and intelligently regulate this new form of economic exchange.

Gig Economy: Newest Tool for Insurance

Why is this taking so long?!

The challenge I hear echoed throughout the insurance industry is, “How do we speed up the claims process for customers?” Insurance companies often face the brunt of the frustrations from stressed-out customers regarding delays with their claims. As we all know, processing those claims takes time and patience to gather information, details, photographs and a myriad of other documentation. Getting the right information and accurate documentation takes even longer.

Based on the volume of claims, resources and personnel can become stretched thin quickly. Despite all the efforts within organizations, it’s not uncommon to see claims departments contorting themselves like Gumby to get it all done. Insurance claims are stressful, and relying on customers to reliably and quickly provide information is a challenge — even when it’s to their benefit.

The problem becomes exacerbated following natural disasters or claims in geographic locations where companies have little to no footprint and limited resources to document and gather the information needed. In those situations, companies have to reallocate and sometimes relocate resources — which is expensive, time-consuming and a logistical nightmare.

See also: What Gig Economy Means for Insurers  

Saving time, improving data quality and accuracy are all key components to avoiding customer frustration and increasing customer satisfaction and loyalty.

Traditional Challenges Meet Disruptive Solutions

Recently, there’s been a lot of handwringing about the “sharing economy” or the “gig economy” and what it means for traditional lines of business, workers and whether it will completely transform the workplace as we know it. As Tony Canas shared in his Insurance Thought Leadership piece, “What Will Be the Uber of Insurance?”, the gig economy is hardly the end of the world — and the insurance industry is probably due for some disruption.

What a number of traditional lines of business are beginning to discover is that the gig economy presents an opportunity to leverage crowdsourcing to solve challenges and inefficiencies and even spark innovation within their own organizations. Target and Instacart, Ford and Lyft, are both great examples of how large, traditional verticals are finding ways to integrate the gig economy into new products and services to attract and keep customers while increasing the bottom line.

Now, let’s go back to one of insurance’s greatest challenges: saving time and improving accuracy in the claims process, particularly when it comes to getting information such as photographs, records, police reports and inspections. These tasks sometimes feel like they can go on forever with a single claim, as companies try to coordinate logistics with policyholders.

What if there was an Uber for insurers? A service that could dispatch an objective third party with a smartphone to quickly take pictures and gather exactly the information needed in the claims process almost immediately?

There is.

The gig economy and the crowdsourcing model provide a nimbleness and speed that are often sacrificed or buried alive in large enterprise organizations.

See also: The Gig Economy Is Alive and Growing  

Turning to the gig economy and its on-demand workforce is generating economic benefits and creating true efficiency. We’ve witnessed the process being replicated in companies both large and small and in a variety of categories.

I’m continually inspired by the creativity of entrepreneurs and how they’ve found inspirational ways to apply crowdsourcing. From crowdfunding, ridesharing, coworking, delivery services (even pet Airbnb), the gig economy marketplace is homing in on specific consumer and business needs and is delivering.

It can do the same for claims, so we can all stop being asked why they are taking so long.