Tag Archives: walsh

The Shift to Frictionless Insurance

Loic Le Meur, who many will know from Le Web Conference and his new startup, Leade.rs,, had a great interview with Alex Dayon, the president and chief product officer at salesforce.com, about how owning a car is almost obsolete. It got me thinking about our shift to utility-based living and what it means for insurance.

In a land where an Englishman’s home is his castle, the car is often seen as the next most expensive asset a person will purchase, so the move away from ownership is great.  And the car is just the start. Now, start to add bundles such as insurance, maintenance and fuel. These sorts of schemes give the best of both worlds because you get to choose what model you try. Do you want a weekend utility, something bigger for holidays away or something smaller for whizzing around town? These new levels of flexibility will absolutely become the norm.

See also: Connected Vehicles Can Improve Claims  

Many of us are used to utility today — prestige car hire, AirBnB, vacation rentals, handbagspets and so much more! The sharing economy is continuously expanding. The key changes here for me are the added convenience because of technology (think about calling a taxi 10 years ago vs. calling one today with an app) and then business models that have changed to deliver micro experiences.

Cuvva is doing the same in insurance with policies available by the hour. While that’s a brilliant idea, I’d almost argue we can get too granular sometimes. We need to be clear on what the pivot point is — it’s just different for different people in different circumstances. If you have ever been to IKEA or something like it, you often find vans in the parking lot that you can rent for an hour because you have bought more than your car can hold.

See also: Beat Brain Drain: Boost Your Talent Pool  

These sorts of schemes change the entire competitive landscape. The winners here will be those companies that provide frictionless experiences that are both relevant and convenient.

Of course, frictionless won’t be for everyone. Your choice will depend greatly on where you live (inner city, suburbs or rural areas). Some look at moving away from ownership as another bastion of losing control. That said, think about how many more hours a day you’d get back to do enjoyable or more meaningful stuff. Time is the most precious entity — period. This is the new generation; experiences far outweigh things, which, coincidentally, makes us all happier, too!

As the old saying from John Paul Getty goes, “If it appreciates, own it. If it depreciates, rent it!”

As we move further and further in this newly accepted world, insurance will form part of the experience bundle, whether you knew it was there or not. The important thing is being reassured you have it and that you have it at the right level.

As I picked up a rental car in Dublin Airport, I got a hard sell about reducing the €1,500 standard excess with better insurance for just €20 per day. While I understand why companies do this, it kind of makes me sad and gives insurance a bad name. How many take out this extra cover? Now is the time for carriers to focus on the partnership opportunities that come with renting and to come up with better approaches.

No matter what, I’m looking forward to trying lots of different cars without the hassle of owning any through new apps and business models that allow me to try things I would never be able to own.

My Top Tips From EXEC InsurTech

I usually approach conferences with mixed emotions, whether attending, learning and networking or speaking. Ultimately, for me, conferences and events are about connecting people and ideas and moving the debate and understanding forward. To this end, I was delighted to join some great folks over at EXEC Insurtech in Cologne, which for me ticked all the boxes. It had a really interesting mix of folks attending, old and new, a serious number of VCs (AXA Strategic Ventures, Commerz Ventures and many more), There were angel investors and more and, importantly, a whole host of new start-ups, many very early-stage. There were some really great ideas from outside the U.K. market, so new to me personally. And it’s always great to see SPIXII, RightIndem and other graduates from the InsurTech StartupBootcamp in London with Sabine VanderLinden.

See also: InsurTech Boom Is Reshaping Market  

In addition to a number of panels where I was able to share the latest views from the Capgemini 2016 World Insurance Report, I was asked to share some perspectives with the group on InsurTech. I wanted to share the same here.

  1. We are in a bubble. By “we,” I mean, those who are here at EXEC InsurTech and see the opportunity. Not everyone sees the world this way, yet! Many of you know I’m a firm believer that disruption is here and now, coming at us thick and fast.
  2. Stand out. Whatever reports you read, be it the tech journals, insurance news or the traditional annual reports from existing carriers, they all talk to the disruption of the traditional insurance carrier (following the “unbundling” of the banks). There are now hundreds of start-ups in this space. It always amazes me to hear Sabine and theStartup Bootcamp team talk to how many start-ups they talk to prior to shortlisting to their final cohort. Make sure that when you are on stage and you have three minutes to pitch, you stand out. Don’t be the me-too.
  3. There have been no really big failures yet. There is excitement and buzz around what people are up to, where disruption is coming from and what part of the insurance value chain people are attacking (sales, underwriting, distribution, etc.). Given this, there has been record investment in the sector; the prize is huge, with a $5 trillion market opportunity. Matthew Wong and the folks over at CB Insights continue do an amazing  job at tracking deal flow, more than $1 billion so far in 2016. The example nearest to a failure that I called out was Zenefits, given its recent re-valuation. Another one was mentioned from the audience — CSS in Switzerland, I believe, but please correct me if I have this wrong.
  4. Partnering is key.  Given the history, tradition and especially the speed of the industry, my view is it’s best to partner and work with the traditional players as opposed to going all out head-to-head today. This may, of course, change over time. There are some really great examples of partnership already.
  5. Evolution or revolution? This is one of my favorite topics. Unlike banking, where I believe #FinTech has unbundled individual services ofmatthew  a bank, insurance start-ups have taken a different approach. Underwriting, for example, is not a category all unto itself nor one that I have seen folks go after in isolation. All need other parts of the insurance value chain to be successful. There are great examples of start-ups evolving each part of the value chain, across products, distribution, sales, etc. Matteo Carbone put together some good thinking a while back on this with his mental framework covering awareness, choice, purchase and use, as did Venture Scanner here in a series of visuals. For now, we are primarily digitizing and simplifying the existing approach and process.
  6. Product mindset. We simply need to move away from this. It will take generations for a complete mindset change. It will happen, in my view, when start-ups move to an “all risks” or truly customer-centric approach (not just better service experience). My two golden rules here remain: relevance and convenience. At what point does insurance become frictionless?
  7. Every carrier is partnering. Pick your partners carefully. I was talking to one of the start-ups that has now engaged in 30-plus pilots. While this is really encouraging and great for the start-up, every carrier is a) partnering, b) building a lab c) working with an accelerator. Make sure you don’t become part of a badge-collecting journey. Are your and the insurance carrier’s ambitions, culture and outcomes aligned? Make sure we are all walking into these partnerships with eyes wide open and with a clear plan of what happens if a partnership is successful.
  8. AI/data/bots are big and cool. That is all! There are some great use cases and examples developing here. We heard from SPIXII and Insuragram, just two examples of how AI and bots are looking to solve some of the business and engagement challenges.
  9. Don’t be the fad. See #7 and #8. Over the last few years, I’ve seen the rise and rise of big data. Then came digital. Now it’s blockchain and chat bots. My point here is that these are all great technologies. But don’t be the technology looking for a business problem to solve — sage old advice you will hear again and again.
  10. Beware of the silos. Many start-ups are working with global carriers. Just because we work with them in one country doesn’t mean they all talk, are connected seamlessly internally and exchange ideas and key learnings. The same is true for in-country and across lines of business. Many people operate in silo’ed P&L models where you may end up doing multiple different engagements with the same global carrier. Joining the dots may not always be right for you. Think speed! You’re in a relay race. Moving parts of an organization to the start line is often easier than moving the whole team at once. As the saying goes,“think big, start small, act quickly.”
  11. Customers (end customers) need to be ready.  With all these cool new ideas and apps that can disrupt traditional insurance, our challenge is often not whether something can be done but whether customers will be ready. We know it can be done; everything is possible! But there are many reasons why customers take a while, often a long while. Telematics is 25-plus years old, but it’s only now becoming more widely adopted. Even now, take-up is still relatively slow (except in Italy).
  12. Talent. Above all, there is an arms race for talent out there. Bringing together InsurTech and traditional insurers is one of the best ways of ensuring (no pun intended!) that we continue to attract and leverage some of the greatest talent in the marketplace, promoting Insurance along the way as a great place to excel and challenge the status quo.

See also: InsurTech Forces Industry to Rethink

So back to one of my initial comments — what conferences do for me. At this one, particularly, I was delighted to meet with so many folks looking at the market from different angles. Conversations about Europe were especially interesting given the recent U.K. BREXIT decision.

Finally, getting to exchange ideas with Matteo Carbone of Bain and Florian Graillot of AXA Strategic Ventures in person was the icing on the cake. Gentlemen, until next time. My thanks to Robbie Boushery, Moritz Delbrück and the team at Pirate Summit for bringing this all together.

So what do you think? Good sage advice? Something missing? What would you add/remove from my list?

Looking forward to continuing the debate!

Here Comes Robotic Process Automation

Robotic Process Automation (RPA) is very much today’s buzz phrase. If you are to believe the press, everyone is afraid robots will take all our jobs—even the popular media is reporting on the “Rise of Robots.” (Daily Mail estimated robots will take over five million jobs by 2020, and the Financial Times also threw AI into the mix.) McKinsey says 25% of jobs are likely to go because of this new technology. The War of the Worlds begins!

See Also: Of Robots, Self-Driving Cars and Insurance

But robots/automation have been part of every stage of industrialization, evolution and revolution. From horses to motor vehicles and auto assembly lines, from bank agents to ATMs, from manual work to macros—there are so many things we have done that automate and ultimately save time by doing things in a more efficient way. In every one of these scenarios, we have moved to new jobs and created new categories. Today is no different. In fact, there are many jobs that didn’t exist 10 years ago. This from David Hamman:

Regarding robotics, a quick summary from me would include:

What it means for insurance (and most other industries)

  • Reduced error rate from human processing
  • Improved process speed (today you can still only run at the pace of the slowest machine)
  • Increased speed—robots don’t take coffee, lunch or holiday breaks, so there’s a lot less to deal with

Why it works:

  • Allows the focus to be on the customer, while the robot does all the “swivel chair integration” (updating lots of systems with the same stuff)

Don’t forget:

  • Ultimately, you are adding more layers to the ecosystem/architecture. This may give you great full-time equivalent (FTE) improvements, productivity gains and reduced error rates, but long-term strategy should be to switch stuff off and reduce run cost.
  • If the underlying systems change, do you need to change your robot configuration?
  • The “happy path” is always easiest to map. It’s when that path doesn’t work that things starts to get more difficult.
  • If your remaining FTE are only dealing with exceptions, they likely need to be more skilled and experienced. They also need to be able to pick up in the middle of process quickly to understand the exception and complete the task or set the robot on its way again.
  • Automate only the right process. Not everything will be a good candidate, just because you could automate it.
  • Don’t mistake “rules” with RPA for human judgment’ I don’t think we are quite there yet, but, with AI, we are learning. It won’t be long.

Of course, we just launched the first Robot-Run Insurance Agency, which moves from robotics to robo advice—a whole new world indeed.

For now, there is plenty to dance about and plenty of opportunity and ways how this can be used to drive significant benefit and opportunity.

What’s your take? Where do you see these best used, and why? Where can we see the positive side of this in terms of exciting new jobs and better experience for employees, agents and customers?

What Does 2016 Have in Store for Us?

It’s the time of the year when we look back fondly at the year just gone and look forward with trepidation and excitement at the year ahead. 2015 was, all in all, a good year for most, with a number of significant events that saw a good end to the year. Weather, on the whole, was mild, with the UK floods over Christmas being responded to well by all. Regardless of the news/political agendas, we are still investing £2.3 billion into flood defenses over the coming years.

As we look forward, here are my thoughts on how we start 2016. What do you think? As always, I look forward to your feedback!

1. FinTech and InsurTech. 2015 will be remembered as the year of the zone, loft, garage and accelerator. This trend will continue with a new level of maturity and focus. We will see the emergence of the first three to four successful candidates from accelerators, as well as more failures (we need more to help hone the focus). Either way, this trend will continue upward as we look for the next unicorn and existing carriers worry about FOMO (fear of missing out).

We will see more acquisition in this space, too, where existing carriers acquire to improve or extend their value chain and reach — for example, as we did last year with Generali and MyDrive.

2. Evolution of IoT. The Internet of Things buzz has reached a fever pitch. (I’ve even written about it myself.) 2016 will be the year we all realize it’s just another data/automated question set, from connected homes, cars and fridges to the connected self. Focus will move to strong use cases and business cases, but anything here on its own will not survive. It needs a partner – or three.

3. Digital and data. 2016 will continue to be a big area of growth for both, and I’ve bundled them as I believe they are intrinsically linked. That said, if you haven’t done anything here yet, you are very late to an already crowded party. Both will continue with huge levels of interest and hype, but both need to move into genuine execution of the plans made last year. Ultimately, the only thing that matters here is the customer. Don’t just have a plan because others are doing it. It needs to be right for you and your particular customer segment.

4. M&A will continue but will slow. 2015 saw a record-breaking year for M&A in the insurance world. As the economic climate changes and we see interest rates rise in 2016, I see this slowing down, while the current set of newly combined companies focuses on bringing together the multiple new units into a cohesive, efficient, fighting machine.

5. Will the CDO survive? (By CDO, I mean either the chief digital officer or the chief data officer.) As with my first point, the focus and drive in these areas has been great; there has been the right effect and a wake-up call. However, for organizations that implemented these “change agents” and “purposeful” disruptive roles, I suspect we will see a move back to a focus on the chief customer officer.

6. New business models. To take advantage of all this data, technology, customer intent and more, we need to find and be clear on what the new business model will– and needs to– be.

7. What we buy and sell. We need to move away from a product mindset and become more relevant and more convenient – my two favorite terms when it comes to insurance. Rick Huckstep did a good piece on engagement insurance, which, to me, sums up how we better embed ourselves into daily life, rather than once a year or in the current cycle. This is where organizations such as Trov will come into play. Trov and others will be more integrated into our everyday lives, becoming more convenient, seamless and relevant to us, driving more engagement. From a convenience perspective, companies such as Cuvva made the news last year. This is just the start of things to come. The key questions are whether they can scale and whether they will make money. Peer-to-peer also made lots of noise; however, I think the same questions here apply.

I still feel we will move away from the current product mindset we have today to just buying complete cover for the individual and anything she does, regardless of where she is. I previously called this the “rise of the personal SME.” I expect to have insurance rather than five to 10 products.

8. Cyber is the new digital. While the last few years have focused heavily on digital transformation and data, this year will see a big shift in focus to cyber, both on the buy and sell side, with organizations moving quickly to not be the next headline for the wrong reasons. So, each organization needs to have the right measures in place, followed by the right cover. For carriers, this means new products and opportuniti,es with specialists including ACE, XL Catlin and Beazley already making strong moves.

We started 2015 by saying that the risk was simply too big to cover and finished it with calls for a government-backed reinsurance scheme for cyber, as we have already created for floods. Is it a real need or a political agenda? My view is that it’s a real need, regardless of the politics.

9. Partnerships and bundling. Like many of the points above, on their own, partnerships and bundling are significant issues and opportunities but perhaps don’t answer the key questions around relevance, engagement, etc. For this, I see a big rise in the partnerships between insurers and third parties or the orchestration/bundling of services that just happens to include insurance. Insurers could become the systems integrator for lifestyle services, by default increasing relevance and engagement.

Finally, let’s not take our eye off the here-and-now. Organizations will continue to need to run the ship, BAU is still BAU (business as usual). We must aim to reduce internal costs and inefficiency. Not one organization I have spoken to over the last year is not riddled with legacy and has clear ambitions to reduce costs and improve efficiency – all to further drive support for the year of the customer.

However we look at things, 2016 is looking like it will be an exciting year. I look forward to sharing it with you!