The insurance industry, like other traditional sectors, is experiencing a wave of disruption at the hands of more nimble, innovative insurtech start-ups.
In this article, Information Age explores six of these insurtech case studies, which are demonstrating innovation in action across insurance.
1. SO-SURE and win-win insurance
SO-SURE is an insurtech that was launched to meet a growing need for change in insurance — an industry that has been too expensive, lacks transparency and has a painful claims processes.
Dylan Bourguignon, CEO at SO-SURE, wanted to address these problems by putting the focus on the needs of the consumer rather than the products.
He said: “A top-down approach of bolting on services and fancy apps to the conventional offering wasn’t going to cut it — we needed to redesign the entire value chain to address the fundamental problems which are: misaligned incentives, fraud, and lack of consumer-centricity.
“For SO-SURE, this means creating win-win insurance for consumers: amazing if you need us and rewarding if you don’t. Firstly, we’ve digitised and automated the value chain to reduce the insurance cost-base and transfer the upside to our customers, resulting in more reliable and faster claims. For the first insurance line, mobile phone insurance, we developed patented technology that removes the need for proof of purchase. This enables a smoother and faster claims process and allows customers to reduce their excess.”
Bourguignon believes that rewarding customers who don’t claim is something that sets SO-SURE apart.
The recent launch of the insurtech’s contents insurance offering embodies this customer-centric focus.
The app enables users to build their inventory in just a few taps and they can get up to 40% of their money back each year when no-one claims. Those that do claim, can expect most claims to be resolved within 72 hours.
“When all these areas are addressed, what we’re left with is this idea of win-win insurance — the sweet spot which means that we’re here for our customers when we’re needed, and when they don’t need us, they get rewarded. For us, it means greater customer loyalty, greater distribution and lower cost of insurance,” adds Bourguignon.
2. Superscript and comprehensive protection
“Hardening markets are forcing carriers to be more cautious, with shrinking appetites and increasing premiums,” he says.
But, Superscript’s “tech allows us to build more sophisticated customer risk profiles to better align their needs across a broader range of carrier appetites. Rather than being underwritten by a single carrier, we can divide the risk amongst many. This process allows customers to build up far more comprehensive protection with greater optionality, whilst binding insurers to the specific risks they want.
“Alongside our subscription-style delivery and integration capabilities, the offering becomes highly personalised and dynamic, ensuring customers are adequately covered now and as things change.”
3. Hiro, home insurance and smart home technology
Insurtech startup Hiro is creating a home insurance solution fit for 2021, by rewarding homeowners for taking the initiative in protecting their homes through the use of smart home technology. By taking such preventative measures to use video doorbells, smart cameras and leak detectors (amongst other technology) within their homes, a Hiro home insurance policy can save the homeowner money on the cost of their premium.
How it works? “The Hiro app scans a home to work out what technology is already in place before automatically applying a discount. Hiro offers customers a discount of up to 25% on their policies, with additional smart devices capable of reducing the cost of the premium. It’s a monthly contract with no cancellation or admin fees,” explains Krystian Zajac, founder and CEO of Hiro.
The home insurtech partners with over 30 smart home manufacturers to offer member-only discounts on the best protective technology.
“More than half of UK households own a smart device, but insurers have been slow to recognise their potential. Hiro’s recent research shows that homes with one or more smart devices are 35% less likely to have suffered a claim greater than £5,000 in the last five years, and 70% of homeowners with smart tech have not made a single claim in the last five years. This begins to show the potential that preventative behaviour can have on insurance,” adds Zajac.
Larger insurance companies have embraced a digital-first mindset to combat insurtech disruption
4. INSTANDA and no-code
“Digital transformation is allowing insurers with the essential tools to deliver customers excellent service without overextending precious resources. Although, we are still seeing evidence of a strong undercurrent holding innovation back,” he continues.
This is where partnering with insurtechs, like INSTANDA, can help insurers by providing technology that allows them to quickly and cost-effectively adapt their models, get to market in record speed and re-engage with their customers. Insurtechs offer the capacity for insurers to focus on adding value by innovating and iterating.
Wood explains that one way of achieving this is “by using no-code software, which enables providers to build and demonstrate working examples of new insurance products in a matter of hours. By offering the opportunity to innovate at scale, no-code platforms simplify and transform the way you deliver products to customers. Also, another advantage is that by collaborating with software companies like INSTANDA, the platform is designed to sit alongside or replace older technologies.”
5. Tapoly and SaaS
As mentioned, insurance has been a siloed business resistant to digital transformation, but things are changing and digital innovation is being embraced to improve the set-up between intermediaries and insurers.
Tapoly has done this by building an “end-to-end SaaS solutions for Wholesale and Retail to connect insurers with new and existing distribution partners to increase data sharing, communication and operational efficiency, particularly with SMEs and freelance customers,” explains Janthana Kaenprakhamroy, the company’s CEO and founder.
She continues: “Our analytics engine collects and amalgamates data from different sources across the globe using AI/ML techniques to accurately assess risk and enable automation by removing time-consuming manual processing. Our API can be integrated with online platforms, or white-labelled and integrated within existing platforms to provide bespoke insurance direct to consumers across different distribution channels. By improving these areas customers can secure required insurance as quickly and cheaply as possible.”
6. By Miles and car insurance
Looking specifically at car insurance, By Miles is on a mission to make car insurance fairer for the UK’s 19 million lower mileage drivers (or those who drive under 7,000 miles each year).
James Blackham, CEO at By Miles, explains that “we provide lower mileage drivers with an alternative to the one-size-fits-all approach of traditional annual fixed-price car insurance policies. With our pay-by-mile policies, motorists pay a fixed fee to cover their car while it’s parked, then a few pence for each mile they drive. And we cap the daily charge at a maximum of 150 miles in a day, so if you do a longer road trip – any additional miles driven after the first 150 are on us.
“Unlike pay-how-you-drive policies, we don’t use driver scoring or curfews to change the price of insurance – just the distance you drive. We measure your journeys using a Miles Tracker which drivers can easily plug into their car in seconds, and they can keep an eye on their monthly spending using our mobile phone app.”
Insurance cover is just one part of the service we offer as standard, according to Blackham. The car insurtech app also provides a Car Medic feature, which can scan an individual’s car to identify any faults, and they can warn drivers after a journey if they’ve driven through a congestion charging zone and may owe a fee.
“The events of the last year have highlighted the need for a more flexible alternative to traditional car insurance policies, which adapts to changing driver behaviours. In 2020, we calculated that car insurance companies saved over £1 billion on claims as a direct result of people driving less during lockdown. It’s unfair that consumers are paying for a service they’re not using.
“Meanwhile, our own customers’ premiums fell by 25% in 2020, directly in line with the reduction in their mileage, so each policyholder saved an average of £44 from the price they’d been quoted at the start of the year — and many are reporting having saved a lot more,” he adds, referring to the benefits of an on-demand, subscription insurance service.