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InsurTech: Morphing Well with Brokers

I just ran across a couple of new perspectives on insurance websites. Both suggest brokers are leveraging technology to improve accuracy, decrease turn-around times, and continuously offer new products and services to engage customers.

And they are doing it their way.

Let’s start with AI in Insurance …

Edmund Zagorin, a procurement expert, offers some serious, new value-add to insurance executives in the article “Artificial Intelligence in Insurance: Three Trends that Matter” at Emerj Artificial Intelligence Research (formerly TechEmergence). At the outset, Zagorin offers trends which divert from many normal platitudes. For example, he provides A.I. in insurance “Insights Up Front,” namely:

    1. Behavioral Policy Pricing
    2. Customer Experience & Coverage Personalization
    3. Faster Customized Claims Settlement (including peer-to-peer (P2P) insurance

Each of these are explicated in business terms. Moreover, Zagorin provides clear reality. After responding to the majority of usage-based insurance, he is straightforward describing the minority’s interest:

Roughly a fifth of the market isn’t even interested. 21% of customers declined to participate in a UBI program when it was available and 81% of those respondents did so because they didn’t want their driving monitored,

That statistic is followed almost immediately by the statement that “Just because some carriers are getting sensor data doesn’t mean they are using it.”

And the candid explication continues with the last two sections, on “Customer Experience & Coverage Personalization” and “Faster, Customized Claims Settlement.”

So what’s the bottom line?

Zagorin focuses on P&C insurance, with a heavy weight from the consumer.  In conclusion, he notes that ‘Customers evaluate the performance of insurance products when they need to be paid, not when they make their purchase.’

Putting this another way, Zagorin says:

Unlike other products or services, customers are only able to form a judgment about the value that an insurance carrier delivers when the event being insured against takes place.

And as he leans on a final emphasis. Zagorin quotes Mike LaRocca, CEO of State Auto Financial, who put out the admonition to other execs: “The power of change is coming, and if we fail to see it, we could be dead too.”

What do you rhyme with ‘Orange’?

I tripped across an agents’ group that calls itself The Orange Umbrella – with a sub-headline of “Resources for the Modern Agent”under the aegis of the organization Precise Leads Inc.

I’m intrigued by the thinking that is going on. The headline (and only ‘line’) of a May 2018 post is “InsurTechs Have Potential, But Haven’t Gained Traction.” The author lays it out in the first paragraph:

Despite the buzz surrounding the rise of insurance technology startups, a recent survey indicates fewer consumers than expected are familiar with the leading companies among this growing sector of the industry.

That survey came from an April 2018 article from J.D. Power, who found that, with all the activity in the InsurTech environment, among 15,000 consumers who had looked for an auto policy quote,

only 6% recalled the names of well-known InsurTech startups such as Lemonade, Metromile, and Trov.

J.D. Power’s article notes that:

There’s never been a more competitive environment for auto insurers in the battle to win and retain business. According to the J.D. Power 2018 U.S. Insurance Shopping Study,SM a combination of record-low volumes of new insurance shoppers, consistent price competition among insurers and emerging “InsurTech” disruptors on the horizon have forced auto insurers into aggressive customer courtship mode. 

Orange is taking the position that their agents haven’t found widespread disruption with new and extant agents and customers.  That said, the agents are ‘future-proofing’ by: 

combining the cutting-edge support of up-and-coming InsurTechs with the trust and warmth of person-to-person interactions.

Orange notes that the agents should not immediately offload essential functions to a digital platform as an exclusive contact point.

That said, however, Orange suggests the agents “should nevertheless try to bring new digital offerings into their practice that complement interpersonal support.”

Orange puts it well:

As the J.D. Power survey shows, InsurTech startups haven’t fully caught the public’s attention — at least not yet. However, it’s only of matter of time before their services find wider adoption. By blending insurance expertise and strong client relationships with cutting-edge digital tools, insurance agents can up their game and level the playing field.

Agents are working hard, and earning points. What do you think?

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