“The data is there to price every home in America without asking a single question,” – But it’s rarely accurate and complete. I’ve tried some of these “low-friction” insurtech startup solutions and the coverage recommendations built from public data sources were simply wrong, and the quotes wildly out of line. Furthermore, what kind of risk management is that? They never ask about any unique exposures that I may have. Buying an insurance policy is not the same as depositing a check or transferring funds. Automating and reducing friction in transactions can only go so far when it comes to accurately identifying and covering loss exposures that can be life altering. Buying insurance is not and never will be as simple as buying a toner cartridge on Amazon.com. Insurtech can streamline the process but it cannot be a substitute for professional risk management services (though AI may eventually make inroads there). Insurtech WILL supplant the “order takers” in the industry, but they’re not providing much value anyways.
Agree with David on most points. Ease of doing business is the key thing most insurance companies need to get better at. Technology can help deliver on that by automating many functions, streamlinging processes, etc but insurance is and always will be a relationship business. When your home burns down or you are in a car accident, you want to talk to a person not a robot.
I attended InsureTech for the second year and the consensus agrees with both of you.
However, many people just want it to be simpler and will sacrifice cost savings if they can avoid a long application and many people also don’t want to spend any time with a broker. Those people will pay more for the convenience, even if they don’t know how much more they are paying.
The truly interesting thing is how claims and underwriting are going to change. WOW! Big Data is creating some amazing opportunities (imagine underwriting the time in a car instead of the miles driven, the actual routes driven to identify time spent on more dangerous routes, and the attention of the driver based on eye movements and you start to get a sense of what’s coming).
Some people were talking about developing a “driver reputation score” for every individual based on health, telematics in the vehicle that track historical speed and braking, and a dozen other factors. You would simply take your “driver reputation score” to any insurer and obtain a quote in seconds. (Big Brother loved it!)
Would you say that InsureTech Connect is worth going to? I almost went this year, but decided against it.
I agree that the average insurance buyer wants convenience and price rather than the coverage. I like to think of this as Lemonade insurance or even Hippo now. I don’t think it will be a real solution to successful families as these products are sub-par compared to companies like Chubb.
I don’t know if I agree with a driver reputation score on a personal level, but I think it could assist our industry in helping people to identify when they need to drive more responsibly.
I am not opposed to a driver reputation score, however, that does nothing to stop the issue of so many people driving without insurance. If you attend these events, they detail very well what is coming down the pike. I did not attend the InsureTech Connect, but have attended others that were similar.
What many companies would love, is a partnership with the auto dealers to install a permanent device in your vehicle that “tracks” your driving habits. How long you are in your vehicle, braking habits, acceleration habits and reaction times. They want to know if you are speeding (excessively) and just not being caught, or if your record is really as good as it appears.
Most things that become mandatory start off as an option. The little devices you plug in today for the insurance companies that allow them to check your driving habits for 30 days will become a new way to rate in the future. Currently, most only offer a 10% discount, on average, for doing really well with one of those in your vehicle. Ten years from now, the discounts may be much larger, but it will be permanently embedded in your vehicle when you purchase it. Big Brother will know where you are and what you are doing at all times. One convention I attended about two years ago in FL stated this could easily be done using your VIN and a chip placed anywhere inside the vehicle. Any Carrier wanting to insure you could go online and view your history in full. Whether we like it or not, it’s coming.
It is by far the best conference I have ever attended. If you are curious about where the industry is headed, it is fascinating.
7,000. people from 60 countries and most of them are really impressive, nearly all are very smart and fun to talk to and the speakers are just great. If it was a week long, I would stay the entire week.
I can’t recommend it enough. Not only did I see more clearly where the industry is headed, I also learned where technology is unlikely to change insurance.
I’m sorry but in the State of Florida, this statement simply isn’t true: “The data is there to price every home in America without asking a single question,” No one, and I mean no one has been able to get it right. for property underwriting in my state We agents can spend an hour rating and issuing homeowners policy (with the latest technology, algorithms, computer models and claims data available) and in just one policy term the rates and terms change and change dramatically, the selected company withdraw from the home’s zip code and claims (ike water damage, mold, construction defects and casualty hits) pile up. InsureTech is an awesome idea but actual end product just cannot back it up with results, especially in places like Florida (or Cali, or the Gulf Coast, etc.). I’m sure one day they will have it down but right now both the insurance companies and the uncontrollable loss environment is stopping them from getting it going.
“The data is there to price every home in America without asking a single question,” – But it’s rarely accurate and complete. I’ve tried some of these “low-friction” insurtech startup solutions and the coverage recommendations built from public data sources were simply wrong, and the quotes wildly out of line. Furthermore, what kind of risk management is that? They never ask about any unique exposures that I may have. Buying an insurance policy is not the same as depositing a check or transferring funds. Automating and reducing friction in transactions can only go so far when it comes to accurately identifying and covering loss exposures that can be life altering. Buying insurance is not and never will be as simple as buying a toner cartridge on Amazon.com. Insurtech can streamline the process but it cannot be a substitute for professional risk management services (though AI may eventually make inroads there). Insurtech WILL supplant the “order takers” in the industry, but they’re not providing much value anyways.
Agree with David on most points. Ease of doing business is the key thing most insurance companies need to get better at. Technology can help deliver on that by automating many functions, streamlinging processes, etc but insurance is and always will be a relationship business. When your home burns down or you are in a car accident, you want to talk to a person not a robot.
I attended InsureTech for the second year and the consensus agrees with both of you.
However, many people just want it to be simpler and will sacrifice cost savings if they can avoid a long application and many people also don’t want to spend any time with a broker. Those people will pay more for the convenience, even if they don’t know how much more they are paying.
The truly interesting thing is how claims and underwriting are going to change. WOW! Big Data is creating some amazing opportunities (imagine underwriting the time in a car instead of the miles driven, the actual routes driven to identify time spent on more dangerous routes, and the attention of the driver based on eye movements and you start to get a sense of what’s coming).
Some people were talking about developing a “driver reputation score” for every individual based on health, telematics in the vehicle that track historical speed and braking, and a dozen other factors. You would simply take your “driver reputation score” to any insurer and obtain a quote in seconds. (Big Brother loved it!)
Craig,
Would you say that InsureTech Connect is worth going to? I almost went this year, but decided against it.
I agree that the average insurance buyer wants convenience and price rather than the coverage. I like to think of this as Lemonade insurance or even Hippo now. I don’t think it will be a real solution to successful families as these products are sub-par compared to companies like Chubb.
I don’t know if I agree with a driver reputation score on a personal level, but I think it could assist our industry in helping people to identify when they need to drive more responsibly.
I am not opposed to a driver reputation score, however, that does nothing to stop the issue of so many people driving without insurance. If you attend these events, they detail very well what is coming down the pike. I did not attend the InsureTech Connect, but have attended others that were similar.
What many companies would love, is a partnership with the auto dealers to install a permanent device in your vehicle that “tracks” your driving habits. How long you are in your vehicle, braking habits, acceleration habits and reaction times. They want to know if you are speeding (excessively) and just not being caught, or if your record is really as good as it appears.
Most things that become mandatory start off as an option. The little devices you plug in today for the insurance companies that allow them to check your driving habits for 30 days will become a new way to rate in the future. Currently, most only offer a 10% discount, on average, for doing really well with one of those in your vehicle. Ten years from now, the discounts may be much larger, but it will be permanently embedded in your vehicle when you purchase it. Big Brother will know where you are and what you are doing at all times. One convention I attended about two years ago in FL stated this could easily be done using your VIN and a chip placed anywhere inside the vehicle. Any Carrier wanting to insure you could go online and view your history in full. Whether we like it or not, it’s coming.
It is by far the best conference I have ever attended. If you are curious about where the industry is headed, it is fascinating.
7,000. people from 60 countries and most of them are really impressive, nearly all are very smart and fun to talk to and the speakers are just great. If it was a week long, I would stay the entire week.
I can’t recommend it enough. Not only did I see more clearly where the industry is headed, I also learned where technology is unlikely to change insurance.
I’m sorry but in the State of Florida, this statement simply isn’t true: “The data is there to price every home in America without asking a single question,” No one, and I mean no one has been able to get it right. for property underwriting in my state We agents can spend an hour rating and issuing homeowners policy (with the latest technology, algorithms, computer models and claims data available) and in just one policy term the rates and terms change and change dramatically, the selected company withdraw from the home’s zip code and claims (ike water damage, mold, construction defects and casualty hits) pile up. InsureTech is an awesome idea but actual end product just cannot back it up with results, especially in places like Florida (or Cali, or the Gulf Coast, etc.). I’m sure one day they will have it down but right now both the insurance companies and the uncontrollable loss environment is stopping them from getting it going.