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Could an Incumbent Act Like Lemonade?

Lemonade, the industry disruptor touted as a game-changer for the insurance industry, has officially opened, with homeowners and renters products launched in New York.

Lemonade’s opening is significant for a number of reasons. First, Lemonade’s business model will donate unused premiums to a charity. This sounds like a great idea — and it deserves to work — but time will tell if it’s enough to deter fraud.

Second is the Lemonade app.

The Lemonade app seems to be a killer in terms of capability, usability and its use of bots. Get insured in 90 seconds? Tick. Submit a claim and get paid in three minutes? Tick. The app is easy to use and has a slick user interface (UI) – it’s the app every insurer wishes it had.

See also: Lemonade: Insurance Is Changed Forever  

Which brings me to my point: Could a traditional insurer create an app — and accompanying product offer — like Lemonade? Ever?

No. And here’s why.

First, traditional insurers are crippled by legacy systems — creaking green-screen pre-floppy behemoths that no amount of lipstick can overcome. They’re not capable of ever supporting a product offering like Lemonade’s.

Second, traditional insurers have global workforces that are personally invested in the industry status quo. Moving to a product offering like Lemonade would involve ripping up centuries of rules and embracing a lot uncomfortable (and job-threatening) change.

And third, Lemonade’s product offering has no place for intermediaries, who insurers depend on for the majority of their income. As we know, once an insurer goes direct, intermediaries will switch insurance companies, meaning bye-bye revenue.

The only solution for traditional insurers wanting to compete with Lemonade is to start from scratch. In short, they need to create a company or subsidiary unencumbered by legacy systems, workforce constraints and intermediaries.

It’s been done before in other industries. The 1990s saw the advent of the low-cost airline. Traditional carriers, unable to compete with low-cost carriers, created low-cost subsidiaries of their own. These low-cost subsidiaries were not hamstrung by legacy systems, unionized workforces or booking agents. They were free to innovate, create new cultures and products. While some have struggled, many have enjoyed success.

See also: It’s Time for Some Lemonade  

Now is the insurance industry’s low-cost airline moment. Transforming from within is proving to be a glacial and painful process for many traditional insurers. Starting from scratch may just be their best option.

Insurance Jobs of the (Near) Future

As the insurance industry continues its slow but steady journey into a digital future, the skills required by the insurance workforce of tomorrow will also change. Here is my take on some of the insurance jobs we can expect to see in (I hope) the near future.

Digital Forensic Investigator

It’s happening more and more – fraudsters submit an insurance claim only to have it thrown out because someone’s discovered footage showing the whole thing was staged. My two favorite examples of recent times are the pregnant woman case and the Bugatti Veyron case. With more of our lives shared online, it’s easy for insurers to check our digital alibis, and digital forensic investigators (basically people who get paid for trawling social media) are the mechanism to do this.

Cyber Actuary

Cyber insurance is becoming a must have for corporations, but it won’t be long until it becomes a must have for individuals, as well. To effectively price this insurance, a new breed of digital natives with actuarial skills will be required to work out the risk and loss associated with a personal hack of your Facebook, Twitter, Instagram, LinkedIn and email accounts.

Drone Pilot

If you’re currently working as an insurance assessor, I recommend you start learning how to fly a drone. On any given day in the future, you could have five drones at your command, each one automatically programmed with a flight path of claim sites to visit. As each drone arrives on site, you take manual control to get a good look with the on-board camera. Same job, but no more climbing roofs or visiting wreckers.

Telemedicine Nurse

Panel doctors beware! Five years from now, most medical examinations will be done at your local “telemedicine booth,” where you’ll self-assess using the same tools a doctor would use. A live telemedicine nurse, located anywhere in the world, will be on a video conference screen located in the booth to guide you through any tricky parts and to verify that it’s actually you taking the tests.

Internet of Things Solution Architect

It’s already possible to control many Internet-connected things in your home – televisions, fridges, air-conditioners, door locks, lamps and pet food dispensers – using smart phone apps. So, in theory, it should also be possible for these devices to notify you when they’ve been stolen (televisions), had food spoil because of a power failure (fridges) or been broken into (door locks), or when a pet stops eating and falls ill (pet food dispensers) – all of which are also insurable events. The challenge for IOT solution architects is to take the data and use it to trigger automated claim applications and approvals. It’s an exciting (though less private) future.

Have we missed anything?

These are just a few of the jobs that insurers can expect to start recruiting for shortly, if they haven’t already. Do you agree? Have we missed anything? Please comment below!