Insurtech, from Evolution to Revolution

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While I can’t deny we live in an exciting time for the insurance industry, with all the new technologies and new entrants in our industry, the more I see, the more I want to see. Just when you think you have looked at something amazing from say Trov, then you see Lemonade, and then Slice, and then others. But as interesting and powerful as their propositions are, and these new players are making us believe again in the industry, you know that further potential exist and so what we see today feels more like an Evolution than a Revolution.

Back in 2008, a year after the iPhone was launched I was the COO of RSA Insurance in Chile, we were the market leaders in P&C, and with my team we started designing an App to help our Personal Lines clients with FNOL processes plus a few nice features like finding and getting directions to our nationwide network of branches, communicating with our call center with one tap, and even a flashlight (these were the days before Apple included one within iOS).

So in 2009 with a lot of marketing behind us we launched and it was a great hit, downloads were many, I was interviewed for newspaper articles and radio, our App was Top 10 in Chile (ahead of Facebook at one point!). But just as we went up, we went down, not because the app was not good but because others came to market, and sadly we were all doing the same, we were using a new technology to display old processes, and as exciting as it was, we were just trying to Evolve, individually and then collectively with our competitors.

So today we see more and more players using new technologies, a lot more sophisticated than an App one must recognize, but all kind of similar. And the more players try to do the same, as in trying to Evolve, the less advanced we are going to be in the eyes of our customers, because fundamentally we are using new technology to display old processes: Quote, Buy, Claim, Get Paid. Whether we have the ability to cover things (with Trov), or get the benefit of using AI and chat-bots (like Lemonade), new tech is aiding us to do kind of the same, and that is not bad, but is an Evolution.

Enter 2018 and beyond, the future of the future! And the potential to combine these new technologies to reposition how Insurance delivers “Risk Management” is embedded in our everyday lives, in other words we aim for a Revolution. In a world of self-driving cars and IoT devices where we all thought Insurance was to be dead, we incorporate, through Location Intelligence and AI, different mechanisms to get help from our Insurtech, with simple things like the best routes to take our kids to a friends house, and once there, notify us that they are safe (remember when we were told, call me when you get there? Or these days we say, text me/send me a WhatsApp when you get there?). As we are gone on holidays and one of our water pipes break while we are thousands of miles away, the sensors can contact the plumber to minimize the damage and solve the problem.

Your insurance company could do all that, integrate all these new capabilities, with partners perhaps, but building a Risk Management Ecosystem that works for you, all embedded in an ever present set of coverages that fit your lifestyle and helps regularly rather than occasionally when you have a claim and the risk has become an issue. Don’t get me wrong, Insurance companies should be there and then too and they should be as easy to deal with as the new players are evolving the industry now, but Insurance can be so much more if we only look forward to the Revolution. As Matteo Carbone said in his recent Article “Insurtech is the way to keep the insurance sector relevant”, my perspective and description of the Revolution is related to the combination of his four axes (4 Ps): productivity, profitability, proximity, and persistence, where we aim to be relevant and revolutionary at the same time.

We have come a long way in the Insurance industry, we have survived and adapted over the centuries, yet this time around we have the opportunity to leapfrog ourselves and reposition our services to society, becoming a lot more relevant in everyday lives. In many respects new players have taken that role without offering the active Risk Management component, but just as Facebook and Uber have penetrated the fabric of our lives, it won’t be long before they figure a way to add that component to their stack of services. That should provide us with the sense of urgency necessary to take the lead and Drive the Revolution!