Long gone are the days where “the man from Pearl” would come to our house to collect insurance premiums in cash. I remember sitting in on those meetings – even as a child I was pondering the cost of Pearl providing that service and whether my mum was over-spending on insurance with the little money she had. Now, thanks to price comparison websites we are fortunate to have complete transparency over pricing and choose the cheapest (or best value) policy the market has to offer.
Over the past 12 months we have continued to see disruption to how insurance products are designed and distributed. There is a greater variety of products designed to meet the needs of today’s consumer and to protect what matters to them. Insurance products are now more micro, flexible, usage-based or event driven. But we are still buying insurance and it’s this buying process, whether it’s via a price comparison website or from the insurer that hasn’t changed much in 2019. I was expecting the buying process to be much slicker but instead I still have to go through a quote and buy process. I went to one price comparison site (think meerkat) and abandoned after filling in the first 50 questions. In the new open data era this is just wrong. Digital services should instead be minimising the data I have to enter as a customer and then enrich this using internal or external 3rd party sources. Insurance is still years behind fintech. Wonga disrupted the industry by making automated loan decisions based on asking the customer just a single question. The question was how much the customer wanted to borrow and it was presented as a slider. Wonga digitally measured how the customer interacted with the slider. If they moved it fast to the right (i.e to max out their borrowing) Wonga knew you weren’t a good risk. Move it cautiously to the left to see the minimum loan amount you could afford, the behavioural data told them the opposite. They didn’t ask the customer whether they had been previously bankrupt and auto-reject the application if they had. They didn’t have to. Wonga had the empirical data proving that persons that were previously declared bankrupt were actually much less likely to default than people who hadn’t. Counter-intuitive, but therein lies the genius.
Which takes me back to insurance and creating great customer-centric digital products. Even if you were to devise a one question data collection process, you’ve missed the point (drum roll for the genius moment…) customers don’t want to buy insurance. They want to be protected. Ergo, if customers don’t want to buy insurance, perhaps the objective/outcome for digital transformation programmes is how to make insurance invisible. Forget the whole quote and buy thing. Protection needs to come built-in.
One example of this is how banks have been providing packaged travel insurance with their current account for some time now. No need to register for the service, and no need to advise the insurer in advance of an impromptu city break abroad. It’s there in the background, invisible but protecting me. Why can’t Lloyds bank push the boat out a little more and embed buildings and contents insurance with my mortgage repayments? No more renewals around Christmas, making December much more festive and giving me more spare cash to buy those presents.
Claim Technology’s insurance platform is helping vehicle manufacturers embed insurance with the car, so that I am protected as I drive my new car off the dealership’s forecourt. The data in the dealer’s system triggers a call to the platform to send the customer a text message giving me the option to opt-out of free annual car insurance (hell no), plus a Whatsapp/SMS/email with a link to access all my policy documentation and even self-serve a claim (positive mental note; no need to phone an insurer again).
So having covered off what traditionally I would buy on an annual basis (household, motor and travel) where else could invisible insurance go? Let’s start with my mobile phone. Hey Apple, please use Claim Technology’s insurance CaaS to send me a message as soon as I turn my phone on letting me know the phone is insured and how I claim for a cracked screen. I was feeling riled that you dared to deliberately slow down my iPhone 7 in the hope that I’ll buy an iPhone 11 but your disruptive insurance offer may actually prevent me from switching to Android.
Calling all retailers (are you reading Amazon?) – as a customer I resent it when I’ve spent my hard earned cash on something that goes wrong in 6 months time despite never having used it and having no comeback. I know, I know, caveat emptor. However I’ll happily only buy from you if you add a single-click insurance CaaS button to your app enabling me to get the item replaced as fast as it took to buy.
Trainline.com? Why are you asking me to buy trip insurance? Make it invisible and credit my credit card when the train is delayed without me needing to submit a compensation claim. I’m much more likely to use your service and be happy paying that booking admin fee you add.
With the rise of the gig economy, how about Uber, Deliveroo, Fiverr all make insurance invisible? No more professional indemnity insurance to have to worry about, which reminds me….
If you are an insurance disruptor and want to make life better, shoot me a message at michael.lewis@claimtechnology.co.uk. Let’s meet, cake is on me.
