Welcome!

@ThingsExpo Authors: Yeshim Deniz, Pat Romanski, Elizabeth White, Liz McMillan, Zakia Bouachraoui

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 serves as the Senior Vice President, Solutions Strategy, at Regalix, a Silicon Valley based company, focused on bringing the best strategies, digital technologies, processes and people together to deliver improved customer experiences, journeys and success through the combination of intelligent solutions, analytics, automation and services. He is a popular writer, speaker and futurist, and in the past 8 years he has taught workshops for large enterprises and government agencies in 18 different countries. He has over 32 years of experience working with strategic enterprise IT solutions and business processes, and he is also a veteran executive working with both solution and services companies. He has written dozens of technology and strategy reports, over a thousand articles, interviewed hundreds of technology experts, and produced videos on the future of digital technologies and their impact on industries.

IoT & Smart Cities Stories
IoT is rapidly becoming mainstream as more and more investments are made into the platforms and technology. As this movement continues to expand and gain momentum it creates a massive wall of noise that can be difficult to sift through. Unfortunately, this inevitably makes IoT less approachable for people to get started with and can hamper efforts to integrate this key technology into your own portfolio. There are so many connected products already in place today with many hundreds more on the h...
CloudEXPO New York 2018, colocated with DXWorldEXPO New York 2018 will be held November 11-13, 2018, in New York City and will bring together Cloud Computing, FinTech and Blockchain, Digital Transformation, Big Data, Internet of Things, DevOps, AI, Machine Learning and WebRTC to one location.
SYS-CON Events announced today that IoT Global Network has been named “Media Sponsor” of SYS-CON's @ThingsExpo, which will take place on June 6–8, 2017, at the Javits Center in New York City, NY. The IoT Global Network is a platform where you can connect with industry experts and network across the IoT community to build the successful IoT business of the future.
Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life settlement products to hedge funds and investment banks. After, he co-founded a revenue cycle management company where he learned about Bitcoin and eventually Ethereal. Andrew's role at ConsenSys Enterprise is a mul...
DXWorldEXPO | CloudEXPO are the world's most influential, independent events where Cloud Computing was coined and where technology buyers and vendors meet to experience and discuss the big picture of Digital Transformation and all of the strategies, tactics, and tools they need to realize their goals. Sponsors of DXWorldEXPO | CloudEXPO benefit from unmatched branding, profile building and lead generation opportunities.
Disruption, Innovation, Artificial Intelligence and Machine Learning, Leadership and Management hear these words all day every day... lofty goals but how do we make it real? Add to that, that simply put, people don't like change. But what if we could implement and utilize these enterprise tools in a fast and "Non-Disruptive" way, enabling us to glean insights about our business, identify and reduce exposure, risk and liability, and secure business continuity?
The best way to leverage your Cloud Expo presence as a sponsor and exhibitor is to plan your news announcements around our events. The press covering Cloud Expo and @ThingsExpo will have access to these releases and will amplify your news announcements. More than two dozen Cloud companies either set deals at our shows or have announced their mergers and acquisitions at Cloud Expo. Product announcements during our show provide your company with the most reach through our targeted audiences.
DXWorldEXPO LLC announced today that Telecom Reseller has been named "Media Sponsor" of CloudEXPO | DXWorldEXPO 2018 New York, which will take place on November 11-13, 2018 in New York City, NY. Telecom Reseller reports on Unified Communications, UCaaS, BPaaS for enterprise and SMBs. They report extensively on both customer premises based solutions such as IP-PBX as well as cloud based and hosted platforms.
To Really Work for Enterprises, MultiCloud Adoption Requires Far Better and Inclusive Cloud Monitoring and Cost Management … But How? Overwhelmingly, even as enterprises have adopted cloud computing and are expanding to multi-cloud computing, IT leaders remain concerned about how to monitor, manage and control costs across hybrid and multi-cloud deployments. It’s clear that traditional IT monitoring and management approaches, designed after all for on-premises data centers, are falling short in ...
The deluge of IoT sensor data collected from connected devices and the powerful AI required to make that data actionable are giving rise to a hybrid ecosystem in which cloud, on-prem and edge processes become interweaved. Attendees will learn how emerging composable infrastructure solutions deliver the adaptive architecture needed to manage this new data reality. Machine learning algorithms can better anticipate data storms and automate resources to support surges, including fully scalable GPU-c...