Claim Changers

Let me begin with two thoughts:

1. We are the Nextgen Insurance Customer. We, the modernists don’t own cars, and oftentimes our homes! We are Subleters, Uber-takers, AirBnB-ers, Online Bankers, Connected Home-ers, Favor-ers, Entrepreneurs, and Explorers by way of Mapping Apps (remember the days when you had to STOP and WRITE DOWN directions?).
2. Insurance is synonymous with words like, ‘coverage’, ‘guarantee’, ‘indemnity’, ‘safeguard’, and ‘support’, yet baby boomers, gen-x, gen-y, and echo-boomers seem to universally FEEL differently. There is a disconnect between the coverage itself and the feeling that the coverage suits our lives.

We are living in a grey area – take Uber’s seemingly never-ending battle with the law in providing commercial insurance to their drivers, or Air BnB’s tenant/landlord wars that are waging on. There is no written law to enforce either side, but it’s on the horizon.  Insurance companies are paying close attention to the outcomes, as they will have a new avenue of entrance once the divisions become law.

While being increasingly watchful on innovation, insurance companies are still not using the oodles of data at their fingertips.  Those warm and fuzzies that we FEEL from the coverage we receive are dictated by predictive analytics – something insurance companies are no stranger to.

Here are the major issues:

• First, there is a need to feel secure, like if we lost something, we would get it back (insurance companies, are you paying attention?).
• Second, insurance companies will have to fall in line to accommodate.
• Third, customers need to feel the warm and fuzzies transfer from the new-age companies, to the insurance company that deals with them.

The landscape is changing, and it’s coming in like Miley’s wrecking ball.

Take Allstate for example: They are taking a formal approach, as many carriers do, to their analytics efforts which are largely used for claims fraud and telematics.  Eric Huls, Allstate’s SVP of Quantitative Research and Analytics said at this year’s Insurance Analytics USA Summit in Chicago, “Companies like Amazon, Netflix and Apple are really our competitors because they have set the bar as to what the typical consumer expects.  As an industry we are starting to use analytics to solve more complex problems than in the past but although insurers are evolving quickly, they are not evolving as quickly as the rest of the world.”

As another viable solution to these grey areas, some insurance companies are throwing around the idea of pay per use insurance. For example, according to Metromile in Canada, 65^%of drivers pay higher premiums to subsidize the minority who drive the most. So they have come up with a mileage system that is more economical and makes the most sense for different lifestyles.  This changes the way we insure our vehicles and will make for a more accurate accommodation of the modernists lifestyle.  Isn’t this nice for the modern city-goer?  Are you feeling the warm and fuzzies yet?

Well I cannot wait to see what’s around the corner knowing that insurance companies are becoming increasingly dynamic and willing to put the wheels in motion to advocate for the accommodation of their policy holders.

One thing is for sure, insurance companies are catching on to the lifestyle differences of their previous holders (think 70’s or 80’s lifestyle) as well as the fact that we need to rebuild the trust between the insurer and the insured. 5 years ago, insurance companies were modelled on taking customers from competitors.  Today, we the modernist, are the center of their decision making and it’s based on loyalty and realism.  In that spirit, I say here’s to the next 5 years.  Let’s continue shining light on the gray areas so that the future of insurance keeps looking bright.