It’s not disruption, innovation, or reaction to pandemic that is prompting change in the insurance industry- it’s all of those and more. Look at the news that comes in fire hose volume and force- Hippo raising $150 million for a $1.5 billion valuation as an MGA, Burn to Give continuing to build its social benefit life insurance offering in LatAm, and Aditya Birla Health Insurance realizing its Indian market agents’ sales habits have changed, probably for good due to Covid-19 and loss of collocated customer access. These are but a few of the insurance change points that are seen as occurring- right now.
Patrick Kelahan is a CX, engineering & insurance consultant, working with Insurers, Attorneys & Owners in his day job. He also serves the insurance and Fintech world as the ‘Insurance Elephant’. image source
It was several years ago when the innovation/InsurTech drums began to beat, with plenty of startups and entrepreneurs speaking of the big change needed and occurring in staid old insurance. There were bold statements that insurance would not be recognizable in its old form within a few years. Five or six years later, the five trillion-dollar business continues in great part as its old self. But if one watches, there are significant initiatives that may give us a view of how some markets and some lines will appear in the near future.
Who needs to be full stack when an MGA’s options are enough?
Right off I am not saying Hippo Insurance may not in time ‘graduate’ to being a full stack homeowners insurance carrier. The firm has already grown into an active organization serving twenty nine of America’s states, has acquired a carrier, Spinnaker, acts in part as its own reinsurer, has options for customers in home maintenance and damage prevention, Sheltr, and in spite of a pandemic business environment recently accessed an additional $150 million in funding in anticipation of going public in 2021. CEO Assaf Wand is a veteran of the InsurTech wave, and his firm has outlasted most of the many insurance startups that responded to the disruption call to arms since 2015. Why Hippo as a success story? Like distant homeowner’s cousin Lemonade, Hippo did not try eat the entire insurance elephant, it implemented an idea for the beast and ensured its financial risk was diversified. And the company was promoted and managed well.
A pandemic forces the sales hand of Aditya Birla Health Insurance Company
If you are not familiar with the health insurance industry within India you may not be aware that product distribution has traditionally been a person-to-person transaction, a societal trust handshake in the sales/purchase of the thirty or so regulator approved health insurance products. There are now Covid-19 policies that the Insurance Regulatory and Development Authority of India (IRDAI) has mandated to be made available to the public. But the realization has hit- how do you distribute such products if customers are used to buying from agents/brokers/runners, etc. and what of claim administration?
Mayank Bathwal, CEO of Aditya Birla Health Insurance knows that answer- the company retools to be fully digital. In a recent Livement article , Mr. Bathwal recounts the challenges of no home visits, dealing with claims with less paper documentation, and customers’ concerns with health insurance as a whole due to Covid-19’s spectre of increased claims and some resistance of providers for ‘cashless’ service. It’s a view of the health insurance market in the country as a whole, or as my in the know colleague, Anand R, remarked,
“Is this how it will be? Digital enablement of agents or possible innovation for the entire agency channel?”
Well, customers will adapt and expect virtual service (PolicyBazaar leverages that aspect through digital aggregation of insurance options), and firms like Lucep PTE will help firms migrate into the omnichannel customer access and response world that is evolving.
Life insurance can be of more benefit that simply a distribution after the named insured dies
Insurance companies have been wrestling the idea of how to keep life insurance customers engaged in their respective policy for decades. Of course for most of that period the hoped for engagement was with investing funds in a policy, annuity, or such. Now a company out of Chile, Burn To Give, has made its way to greater exposure with its mission of, “Inspire Healthier Communities by Creating a World of Change.”
Okay, that’s cool, but the company is a group life and health insurer that as a public benefits company engages insureds in better habits, and contributions for greater good. Clever- group health (employers pay, employees and employers benefit), cover that grows with good habits, telemedicine, well-being programs including classes and prizes, wearables, program portability, and for the subscribing firms- data insights. It’s a new way of combining employee benefits and charitable contributions that also revert to employee wellness. Innocuous insurance with feel good aspects. Leveraging tech, data, and world-first attitude. The passionate brainchild of Eduardo Della Maggiora, and thank you Hugues Bertin of Digital Insurance LatAm for posting the company’s work.
Just three off many insurance innovations/InsurTechs that have found a niche, adaptation, or customer accommodation. Don’t be surprised when the pandemic business interruption coverage gap(s) are tackled, or health insurance parametric plans hit the market. Maybe even special event cancellation cover for pandemics or other black swan events. Plenty of opportunity for change and plenty of markets looking for change. It’s all in how one sees it or looks for it.
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