Insurance FinTech – Start-ups or upstarts?

Unless you’ve been under a rock for the last few years you’ll be well aware there are waves of technology companies driving innovations that are starting to take grip on the insurance sector.

Many are dismissing these as fads and nothing to do with insurance or that these ideas will be peripheral to how insurance is written, bought or how claims are paid. They see them as insurance pretenders, upstarts, NOT start-ups.

I’m not so sure. We’ve all heard the Uber and WhatsApp analogies and although there will undoubtedly be some start-ups that have very clever solutions looking for a problem to solve; consumer trust in insurance companies remains low and it’s not looking to get better anytime soon.

Many see insurance as a one-sided game – consumers faithfully pay every month and insurers will put every hurdle in the way and list exclusions as long as your arm trying not to pay. The happier people are to look to alternative channels, the more options there are to have external disruptors come in and change things.

During disruption and market change the natural question is who loses? Lemonade, is one of the big but quite names currently on the scene. What will their offering be? Who will they cause a panic for; brokers, insurers, or reinsurers? Time will tell, but with backing of big names and big money things are certainly getting interesting.

Some of the disruption will obviously come from existing insurance businesses; forward looking firms building out digital business from within, and embracing the potential of data & analytics, mobile ubiquity, social platforms and digital channels, turning them into real business tools. It’s not about just having a great website. These tools and channels have proven to be give great customer insight – behaviours, desires, needs and also an instant and dynamic channel to feedback on product and company performance – good and bad.

In recent months I’ve seen some very interesting products and ideas with a vast range of uses; from biometric authentication, Blockchain – dealing with digital assets, smart contracts, clever ledgers and product providence, to robo-advice, micro-insurance and drone deployments for disaster rescue and medical emergency.

These firms love showing off ways they can make your life easier, simpler and better, and who doesn’t want that?

High levels of engagement are a very enticing way to increase consumer confidence and loyalty.

The obvious difference is that the start-ups put engagement and innovation at the very heart of what they do. What their customers love is the service; speed, seamlessness and flexibility the platforms and tools offer.

The winners in the digital insurance race undoubtedly will be those who put this approach as an integral part of their strategic plan.

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Written by Stewart Taylor.

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