For the past several weeks, we’ve been exploring the most anticipated digital trends for 2017. We recently connected with Manjit Rana, CEO of Ingenin, an award-winning insurance consultancy. Below is an excerpt from our conversation.
When a new digital insurance company like Zhong An that is less than three years old claims to have sold over 3.9 billion insurance policies and gained over 400 million customers, traditional players need to sit up and pay attention. How could a new player in the market achieve such phenomenal growth? The answer lies partly in the fact that the business was created from day one as an online-only insurer by partners Ping An, Alibaba and Tencent—companies with a deep understanding of online retail and service provision.
Several digital trends are rapidly coming together to create completely new types of organizations, products and services, all fueled by a constantly connected consumer who expects instant gratification when seeking information and products.
Self-service portals and claims-tracking apps
Consumers take for granted the ability to track the progress of a purchase—such as the whereabouts of their delivery thanks to the likes of Amazon—so they get frustrated when their experience with an insurance claim falls short. To meet this demand, most leading insurers are now investing in online self-service claims portals that consumers can use to instigate or track the progress of their claim.
The insurance industry has already begun to take this trend toward automation further with the help of machine learning technologies. For example, companies can use sensor data from customers’ smartphones to create usage-based policies, or make quick decisions on whether to send a car to a body shop or declare it a total loss based on photos of the damage. Going forward, we expect to see insurers use AI and machine learning technologies to instantly settle the more straightforward claims and help reduce fraud.
Consumers have grown reluctant to pay for products or services that seem unnecessary. Take the travel insurance policy. Traditionally, consumers are expected to take the policy when they book the holiday, and the premium may cover baggage loss, urgent medical care and more—well before they pack their bags and leave the country. If the consumer only needs a piece of this insurance package, such as trip cancellation coverage, why can’t they purchase it immediately and then upgrade the policy to include the other features as they become relevant?
Companies like Trov are creating on-demand insurance policies, where consumers can easily insure their belongings as needed through their mobile devices. For example, they can insure a bicycle or camera for the actual time that it’s in use. The same consumers that were unlikely to take out policies on their belongings in the past may see the on-demand model as a more cost-effective option going forward.
The sharing economy
Another digital trend on the rise is the sharing economy. With cloud-based platforms, consumers can rent out their unused bedrooms or homes through Airbnb, their driveways through Park On My Drive, their cars on FlightCar or even their spare time through services like TaskRabbit.
The growth of the gig economy and the emergence of businesses such as Uber and Deliveroo present a new opportunity for insurers. For example, Uber drivers need commercial taxi coverage when driving for Uber but personal auto coverage when they’re off the clock—for the same vehicle. Insurance start-ups like Slice have launched products to address this segment.
There are also new services emerging such as Snapsheet and WeGoLook that employ members on an as-needed basis to take photographs and verify online claims. Crawford & Company, a major insurance loss adjuster, recently bought 85% of the shareholding of WeGoLook for over $36 million, suggesting this trend will continue.
Finally, we expect to see the growth of Internet of Things (IoT)–enabled propositions in 2017. Most insurers believe they may have missed the boat on the telematics-based auto insurance market and are focusing heavily on “connected home” propositions. As the cost of IoT sensors and connected devices become more affordable, more consumers will outfit their homes with these technologies. How long before Amazon Alexa is calculating the risk profile for your hourly based home insurance policy?
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