Welcome!

IoT Expo Authors: Liz McMillan, Jnan Dash, Elizabeth White, Lori MacVittie, Roger Strukhoff

Blog Feed Post

Insurance Disrupted - Crowdsourced Policies and Social Marketing

Peter Abatan
Program Manager
Mobility Services
Cognizant
All industries are being impacted by digital transformations and data analytics (read Code Halos) today. Social, mobile, analytics and cloud based technologies are capturing, transmitting and storing more information than ever before.  This information, or the use of information dominance as a strategy, will completely reorient the competitive landscape in many industries.  Information intensive industries, including the following, will experience the biggest disruptions:

  • Banking
  • Healthcare
  • Insurance
  • Education
  • Government
  • Media
  • etc

In this article, my colleague Peter Abatan shares his observations on digital transformations within the insurance industry.
***

The Insurance industry has traditionally been slow to change, but that is changing as crowd and social insurance models are beginning to emerge.

Companies like upstart BoughtByMany connect people with similar insurance requirements who are able to aggregate demand for products that insurance companies have hesitated to insure on an individual basis in the past.

Another start-up, InsureMyFriend embraces P2P to form a network with friends and family to lower the individual’s insurance premiums. Each approach has its benefits and both lend themselves easily to social media.  They have the potential to reduce insurance claims because consequences impact the entire group and social pressures are predicted to make people think twice about risks.

These two companies presented their business models at the London Insurance Disrupters meetup held at the end of April this year in London.

BoughtByMany has about 18,000 members in about 180 interest groups. Overall, the average discount negotiated has been around 18.6%. The attraction to the insurance companies that BoughtByMany brings, lies in the fact that the cost of acquisition is much lower relative to the other channels these insurance companies use to acquire customers, this also applies to InsureMyFriend.

Typically, 90% of their traffic is driven through Facebook in which customers join the group for which they are interested in.  Once joined, they can invite friends.

InsureMyFriend makes it possible for you to link up with friends and family that you trust and provide a way of managing the “pot of money” that you are all setting aside when a claim needs to be made. Since the syndicate is made of people who trust each other, the claims are likely to be very low.
However, if your network has too many claims, a certain percentage of the premium that everyone puts into the pot will be paid to an insurance company to cover larger than expected claims.  In the case where there are no claims, premiums are reduced in subsequent years.

This type of insurance lends itself to smaller items like smartphones and gadgets, as these are easy and cheaper to replace. Motor insurance for young people is another possibility for the BoughtByMany business model with the benefit of getting a 50% rebate or more on their premium if they can stay accident free after a whole year.  Such incentives are thought to change behaviours and encourage safe driving.

Even though social networks are the means by which groups are formed to buy insurance, this process does not lend itself to fully assessing the risk that members are exposed to. In other words the person who goes on holidays twice a year assumes less risk relative to the person who takes 5 holidays a year. Social media is less of an exact science compared to a person’s actual lifestyle and buying behaviour. Hence, while it may be that Facebook is the platform from where social and crowd insurance are promoted and grow, it will be platforms like Amazon, eBay, Walmart and JohnLewis.com where these types of insurance may flourish because they have more personal information (read more on Code Halos) on the individual and their lifestyle.

I wonder if these models alone will really disrupt the insurance industry to the extent that its current business model needs to change? I am not convinced it will.  It may require many more players in the market for the insurance sector to sit up and take notice. The biggest benefit at the moment is the low cost of acquisition for the insurer.  For customers it is the potential to get reduced insurance premiums and customized policies.

The disruption to the insurance industry may not come through crowd and social insurance alone, but through many changes that are impacting the industry at the same time:

  • Quantified self
  • IoT (internet of things)
  • Mobile technologies
  • Telematics
  • Analytics
  • Big data
  • Crowd sourced policies
  • Social insurance models
It seems, however, the biggest disruptions to insurance will likely come from businesses outside of the traditional insurance industry.

In developing countries where the insurance industry is not as mature, one could see the opportunities for the growth of social and crowd insurance where uninsured liabilities are very high and possible pay-outs for a non-fault accident are very low. It may be insurance co-operatives are formed to cover risks, rather than mainstream insurance companies. Members will own a stake in the co-operative encouraging them to take less risk in order to minimize payouts.

Today, the regulatory environment is holding back the insurance industry from going through the disruptions that has shaped other industries.  It won't be long, however, before smart start-ups will begin to find ways to work around those barriers to provide a better service to the customer and in the process change the way we relate to insurance as a whole. One thing for sure, is that very soon the way we source insurance will change from how we know it today.

************************************************************************
Kevin Benedict
Writer, Speaker, Editor
Senior Analyst, Digital Transformation, EBA, Center for the Future of Work Cognizant
View my profile on LinkedIn
Learn about mobile strategies at MobileEnterpriseStrategies.com
Follow me on Twitter @krbenedict
Join the Linkedin Group Strategic Enterprise Mobility
Join the Google+ Community Mobile Enterprise Strategies
Recommended Strategy Book Code Halos
Recommended iPad App Code Halos for iPads

***Full Disclosure: These are my personal opinions. No company is silly enough to claim them. I am a mobility and digital transformation analyst, consultant and writer. I work with and have worked with many of the companies mentioned in my articles.

Read the original blog entry...

More Stories By Kevin Benedict

Kevin Benedict is the Senior Analyst for Digital Transformation at Cognizant, a writer, speaker and SAP Mentor Alumnus. Follow him on Twitter @krbenedict. He is a popular speaker around the world on the topic of digital transformation and enterprise mobility. He maintains a busy schedule researching, writing and speaking at events in North America, Asia and Europe. He has over 25 years of experience working in the enterprise IT solutions industry.

Cloud Expo Breaking News
Scott Jenson leads a project called The Physical Web within the Chrome team at Google. Project members are working to take the scalability and openness of the web and use it to talk to the exponentially exploding range of smart devices. Nearly every company today working on the IoT comes up with the same basic solution: use my server and you'll be fine. But if we really believe there will be trillions of these devices, that just can't scale. We need a system that is open a scalable and by using the URL as a basic building block, we open this up and get the same resilience that the web enjoys.
Cloud Computing is evolving into a Big Three of Amazon Web Services, Google Cloud, and Microsoft Azure. Cloud 360: Multi-Cloud Bootcamp, being held Nov 4–5, 2014, in conjunction with 15th Cloud Expo in Santa Clara, CA, delivers a real-world demonstration of how to deploy and configure a scalable and available web application on all three platforms. The Cloud 360 Bootcamp, led by Janakiram MSV, an analyst with Gigaom Research, is the first bootcamp that introduces the core concepts of Infrastructure as a Service (IaaS) based on the workings of the Big Three platforms – Amazon EC2, Google Compute Engine, and Azure VMs. Bootcamp attendees will get to see the big picture and also receive the knowledge needed to make the best cloud decisions for their business applications and entire enterprise IT organization.
The Internet of Things is a natural complement to the cloud and related technologies such as Big Data, analytics, and mobility. In his session at Internet of @ThingsExpo, Joe Weinman will lay out four generic strategies – digital disciplines – to exploit emerging digital technologies for strategic advantage. Joe Weinman has held executive leadership positions at Bell Labs, AT&T, Hewlett-Packard, and Telx, in areas such as corporate strategy, business development, product management, operations, and R&D.
SYS-CON Events announced today that DevOps.com has been named “Media Sponsor” of SYS-CON's “DevOps Summit at Cloud Expo,” which will take place on June 10–12, 2014, at the Javits Center in New York City, New York. DevOps.com is where the world meets DevOps. It is the largest collection of original content relating to DevOps on the web today Featuring up-to-the-minute news, feature stories, blogs, bylined articles and more, DevOps.com is where the thought leaders of the DevOps movement make their ideas known.
There are 182 billion emails sent every day, generating a lot of data about how recipients and ISPs respond. Many marketers take a more-is-better approach to stats, preferring to have the ability to slice and dice their email lists based numerous arbitrary stats. However, fundamentally what really matters is whether or not sending an email to a particular recipient will generate value. Data Scientists can design high-level insights such as engagement prediction models and content clusters that allow marketers to cut through the noise and design their campaigns around strong, predictive signals, rather than arbitrary statistics. SendGrid sends up to half a billion emails a day for customers such as Pinterest and GitHub. All this email adds up to more text than produced in the entire twitterverse. We track events like clicks, opens and deliveries to help improve deliverability for our customers – adding up to over 50 billion useful events every month. While SendGrid data covers only abo...
SYS-CON Events announced today that the Web Host Industry Review has been named “Media Sponsor” of SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Since 2000, The Web Host Industry Review has made a name for itself as the foremost authority of the Web hosting industry providing reliable, insightful and comprehensive news, reviews and resources to the hosting community. TheWHIR Blogs provides a community of expert industry perspectives. The Web Host Industry Review Magazine also offers a business-minded, issue-driven perspective of interest to executives and decision-makers. WHIR TV offers on demand web hosting video interviews and web hosting video features of the key persons and events of the web hosting industry. WHIR Events brings together like-minded hosting industry professionals and decision-makers in local communities. TheWHIR is an iNET Interactive property.
SYS-CON Events announced today that O'Reilly Media has been named “Media Sponsor” of SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. O'Reilly Media spreads the knowledge of innovators through its books, online services, magazines, and conferences. Since 1978, O'Reilly Media has been a chronicler and catalyst of cutting-edge development, homing in on the technology trends that really matter and spurring their adoption by amplifying "faint signals" from the alpha geeks who are creating the future. An active participant in the technology community, the company has a long history of advocacy, meme-making, and evangelism.
SYS-CON Events announced today that Verizon has been named “Gold Sponsor” of SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Verizon Enterprise Solutions creates global connections that generate growth, drive business innovation and move society forward. With industry-specific solutions and a full range of global wholesale offerings provided over the company's secure mobility, cloud, strategic networking and advanced communications platforms, Verizon Enterprise Solutions helps open new opportunities around the world for innovation, investment and business transformation. Visit verizonenterprise.com to learn more.
SYS-CON Events announced today that TMCnet has been named “Media Sponsor” of SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Technology Marketing Corporation (TMC) is the world's leading business to business and integrated marketing media company, servicing niche markets within the communications and technology industries.
"In my session I spoke about enterprise cloud analytics and how we can leverage analytics as a service," explained Ajay Budhraja, CTO at the Department of Justice, in this SYS-CON.tv interview at the 14th International Cloud Expo®, held June 10-12, 2014, at the Javits Center in New York City. Cloud Expo® 2014 Silicon Valley, November 4–6, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading Cloud industry players in the world.
"We are automated capacity control software, which basically looks at all the supply and demand and running a virtual cloud environment and does a deep analysis of that and says where should things go," explained Andrew Hillier, Co-founder & CTO of CiRBA, in this SYS-CON.tv interview at the 14th International Cloud Expo®, held June 10-12, 2014, at the Javits Center in New York City. Cloud Expo® 2014 Silicon Valley, November 4–6, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading Cloud industry players in the world.
“We are starting to see people move beyond the commodity cloud and enterprises need to start focusing on additional value added services in order to really drive their adoption," explained Jason Mondanaro, Director of Product Management at MetraTech, in this SYS-CON.tv interview at the 14th International Cloud Expo®, held June 10-12, 2014, at the Javits Center in New York City. Cloud Expo® 2014 Silicon Valley, November 4–6, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading Cloud industry players in the world.
Almost everyone sees the potential of Internet of Things but how can businesses truly unlock that potential. The key will be in the ability to discover business insight in the midst of an ocean of Big Data generated from billions of embedded devices via Systems of Discover. Businesses will also need to ensure that they can sustain that insight by leveraging the cloud for global reach, scale and elasticity. In his session at Internet of @ThingsExpo, Mac Devine, Distinguished Engineer at IBM, will discuss bringing these three elements together via Systems of Discover.
The Internet of Things promises to transform businesses (and lives), but navigating the business and technical path to success can be difficult to understand. In his session at 15th Internet of @ThingsExpo, Chad Jones, Vice President, Product Strategy of LogMeIn's Xively IoT Platform, will show you how to approach creating broadly successful connected customer solutions using real world business transformation studies including New England BioLabs and more.
All too many discussions about DevOps conclude that the solution is an all-purpose player: developer and operations guru, complete with pager for round-the-clock duty. For most organizations that is not the way forward. In his session at DevOps Summit, Bernard Golden, Vice President of Strategy at ActiveState, will discuss how to achieve the agility and speed of end-to-end automation without requiring an organization stocked with Supermen and Superwomen.