I try to stay abreast of developments in the insurtech field, especially those involving so-called industry “disrupters.” One way I do that is by subscribing to Shefi Ben-Hutta’s daily Coverager newsletter. If you want to stay informed on this subject, there isn’t a better resource I’ve found.
A recent newsletter included this quote from an insurtech:
“Never prioritize customization (think: tailored policies) over convenience (the opposite of the need to create a digital inventory prior to getting an insurance quote). After all, convenience wins every time.”
This demonstrates the fundamental problem with the vast majority of insurtechs I’ve looked at: They simply don’t get it. Virtually (no pun intended) all of them focus on alleged convenience and the “customer experience.” One startup says they can quote your homeowners insurance in 5 seconds with only an address.
None of them really talk about identifying loss exposures that can’t be ascertained from (often notoriously inaccurate) “big data,” the most important starting point in the insuring process.
And, as the quotation above implies, the righteous focus of a good insurtech should be entirely on fast and easy not on customizing an insurance package that actually addresses customer loss exposures.
Why? Because that’s what consumers want…fast, easy, and cheap! When my son was young, he would have happily lived on a diet of chicken nuggets and M&Ms. That sure would have made life more convenient for me and my wife…a semi-annual trip to Sam’s or Costco for frozen chicken and candy and a little microwave time. But it wouldn’t have been good for him. He understands that now and eats responsibly, but he wouldn’t have as a child if left to his own naïve and uninformed (or misinformed) desires.
Consumers often don’t understand the risks they face and the insurtechs I’m familiar with don’t seem to be the least bit interested in educating them and assisting them in properly and adequately managing their exposures to potentially catastrophic, life-ruining loss. That’s what insurance professionals do. Too many insurtechs are selling “fast, easy, and cheap” wrapped up in a shiny technology package. What are you selling?
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Bill Wilson
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Bill I am sorry but you are the one missing the boat. Do more people eat at an exclusive restaurant or at McDonalds. tailored coverage is nice and maybe even needed by the 1%. It is not for the rest of us slobs that live among the unwashed. These start ups are going after and will successfully acquire business on this group because they can beat the expenses. The largest risk pool always wins in the risk pooling arena.
The “unwashed” have a greater need for adequate insurance coverage because the 1% are better able to withstand a serious financial loss. The startups may be successful, but that doesn’t mean that’s a good thing, just as a daily diet of Big Macs is not a good thing. But I question how successful they will be and their motives for their reason for existence. I suspect most are interested in hyping what they’re doing then selling to the highest bidder which likely will be huge entrenched entities. In the meantime, I’ll continue to point out what I believe to be their deficiencies.