It’s the middle of the night. A family is sound asleep, when suddenly their house is on fire. Thanks to the motion sensor technology of their video doorbell, the family was alerted just in time, and able to evacuate safely while help arrived. Why did this story make the technology founder weep on stage of InsureTech Connect?
There’s no doubt that InsureTech is exploding, and the second annual conference proved it. An Accenture statistic found that $6.3 billion had been invested by July 2017, and the energy of last month’s conference proved it. The landscape is full of bustling disruptors excited to take insurance into the future.
Here are some of the biggest takeaways where insurers must take note.
Why disruption is important
During his session, Mike McGavick, CEO of XL Catlin, said insurance is becoming less relevant, but with the caveat that now is the opportunity to turn it around. To that end, lots of new companies are shaking things up. For example, Insurance-as-a-Service is a new concept providing a digital and seamless customer experience in Europe. With looser regulatory environments there, companies like Qover are pioneering this concept, with the backing of established insurers like Lloyd’s of London.
Innovation is everywhere
From drones to doorbells, technology is rapidly striving to answer insurer challenges. It’s important to work out the kinks, and know failure is part of the process. Ring founder, James Siminoff, spoke of the various iterations it took to make his video doorbell come to life. After proving it helped stem home burglaries, ultimately a partnership with American Family came to fruition.
This partnership was a fundamental synergy in providing a customer with more value, other than when they need help. “We want to leverage technology and partner with companies equally committed to preventing those events from happening… our customers can voluntarily enroll in this program and have their deductibles reimbursed if burglarized,” American Family’s Director of Innovation, James Rist, said in the press release.
Technology brings the need to be agile. Fail, learn from mistakes and keep innovating. This is what InsureTech is bringing to the table that incumbents should use internally to drive innovation and maintain relevance.
Commercial lines have yet to experience the type of disruption that personal lines have. Seizing on this opportunity, Pie Insurance, a new entrant to the workers’ compensation market, discovered that 65% of small businesses overpay relative to their empirical risk level, by an average of 29% for workers’ compensation insurance.
Pie launched at InsureTech Connect focused on making workers’ compensation insurance easier and more streamlined to get, less complicated and with greater transparency. “The traditional high-touch approach agents and underwriters use in commercial lines leads to high prices and a protracted customer experience. Yet, the profitability in this sector indicates that small accounts are subsidizing larger accounts at most insurance companies. By focusing exclusively on small businesses with a digitally enabled solution, Pie will solve this problem at scale,” said Pie CEO, John Swigart.
Why is this all important?
This is insurance at its best. InsureTech is only going to produce more and more companies trying to solve insurer challenges, but they will need help. Those who choose to embrace technologies may ultimately be providing the most benefit to their customers overall. Dax Craig, CEO of Valen, built the company on the same principle. “We started Valen on the two key tenets that our products must provide demonstrable return on investment for the customer and have a positive effect on the good of man. Read more on the Valen story.
It links back to the purpose of insurance. Remember the story about the fire? Well, when the founder of Ring was asked why he did what he did for a living, it was because his technology had literally saved lives.