Tag Archives: zonneveld

The New Insurance Is No Insurance

Insurers are aware that technology will help to reduce claims drastically and therefore finally run premiums down to unsustainable levels.

Time to move on

“Insurance is a cornerstone of modern life. Without insurance, many aspects of today’s society and economy could not function. The insurance industry provides the cover for economic, climatic, technological, political and demographic risks that enables individuals to go about their daily life and companies to operate, innovate and develop.” Source: Insurance Europe

I fully support this, but the way this cornerstone fits into modern life needs attention. It’s time to move on.

See also: Insurance Coverage Porn  

The Third Wave

Twenty years ago, I set up the first digital insurance. Ten years ago, I set up (again the first) mobile insurance Now we’re heading for the third wave: connected insurance.

Real connected insurance with the new opportunities that technology brings is what I (with a few former colleagues) believe in and have been working on for some time now.

Of course: “IoT,” “data science,” “AI,” “customer-centric” and “on-demand” are the buzzwords. But let me add two: “holistic” and “transversal.”

“Holistic” refers to the complete modern household with a connected lifestyle and “transversal” to the consumer who is completely not interested in our industry verticals.

Insurance has to stay but with an overall and fresh approach. Hundreds of insurtech initiatives are currently taking pieces and add sometimes compelling features. See the Sherpa-Neos-Interpolis-Trov-CBien-Metromile-Vitality-Clark-Knip-PolicyGenius-Lemonade-Inshared-like initiatives.

The real challenge is to bring it all together to a compelling, simple, transparent and engaging full service offer to the customer.

Focus on prevention

The new insurance is no insurance — meaning the focus should not be on pushing insurance products but on offering prevention services.

For this we developed an international concept for smart protection called InConnect, with the household as hub connecting all smart devices, vehicles and wearables and with technology and data used to improve prevention.

Safety and Peace of Mind

Unbiased personal risk management tools (Primes) help reduce insurance to what is really needed in one universal personalized policy without redundancies and gaps, dynamically adjusted to the actual situation and needs with:

  • On-demand add-ons
  • Built-in loyalty and reward system
  • Ready connections for sharing cars, rides and homes
  • Easy combining or splitting households
  • Privacy and cyber risk recognized

and backed with a one of a kind insurance and claims IT platform.

Startup

The overall concept is quite ambitious. Although we’ve successfully done ambitious businesses before and have qualified people and technology on our side, we’ll start on a controllable scale. A startup will kick off in three European countries with home, motor and travel.

As soon as we’ve completed our search for the right partners, we’ll start proving the concept, do the learning and keep you posted. Of course we’re always looking for enthusiastic and good individuals. Feel free to give me a buzz.

See also: The Insurance Model in 2035?  

Finally

Insurers are experts in risk and capital management, and that is what they should keep doing, but in a different perspective. Deploy that expertise in the new environment of connected lifestyles.

Is the Era of Aggregators Ending?

A conclusion concerning insurance aggregators (aka comparison portals) in the Accenture Distribution and Agency Management Survey is: “Irrespective of insurers’ views on the role of aggregators, it seems they are here to stay.”

This conclusion is supported by many others, but I venture to doubt it . The aggregator business may be nearing a tipping point.

There are (normal business) threats like:

  • heavy competition (usual in a successful and booming market)
  • takeover by the insurers (ending neutrality, a key issue for a serious comparison offer)
  • high cost of acquiring customers (apportioned to the customers)
  • pressure on product development (requiring cheaper derivatives of existing products, producing less transparency for the customer and making the process of buying insurance even more complex)

Maybe those can be overcome but I see a more fundamental threat for aggregators. 

Comparability

Comparison of coverages and premiums is possible because of the standard insurance products we have in all markets. Products were already quite standard, but the aggregation business has forced them to become even more comparable.

See also: The New Age of Insurance Aggregators  

Insurance, which generates little interest among buyers and which has price as the main buying parameter, might have lived happily ever after as a mature, not innovative market, but….

The New Insurance Is No Insurance

Forced by extreme pressure and pushed by new technology, a new type of service is being deployed: The insurance industry will move from claims handler to claims preventer.

Creating a safer environment for the customer and his/her beloved and belongings; optimizing prevention via smart vehicles, homes and people; analyzing the residual exposure and insuring only the part that is worthwhile to transfer — this is where insurance is headed.

There are huge opportunities for the insurance provider that is willing and able to shift to:

  • Real customer-centricity
  • Customer engagement with continuing advice and loyalty programs
  • Long policy life-cycles, away from aggregator dominance and costs
  • New products and services
  • New earning models
  • A safer and greener environment

All will result in customized and optimized interactive protection and insurance services for the complete household. There will be one-to-one services, on the road to living services (see also Fjord Report).

Non-Comparability

So what’s to compare in one-to-one services and products? In living services?

Of course, customers will need some guidance in this new world, as well. But it’s going to be a completely different ball game than the relatively easy “matching and ranking.”

The Peak

There is so much going on, to develop and to learn that this new world will take some time and the mass market has to follow, adopt and adapt. Therefore, I believe the aggregator business has not reached the peak YET.

But, in my opinion, for aggregators the sky is not the limit, and they are not here to stay. At least not in their current modus operandi.

See also: Understanding Insurtech: the ABCs  

Ultimately

The U.K. seems ahead with close to 70% aggregator-involvement in car. So there’s a fair chance that the U.K. will be leading in reaching the peak, as well.

Technology is developing very quickly, and prices are falling rapidly. Tech companies, OEMs, consumer electronics giants, telcos, media and utilities are already rolling out worldwide their connected devices and ecosystems. Millennials and other digital natives do expect continuous connected value added services in return for their effort and data.

Revolution will come suddenly and from unexpected sources.