Author Archives: Kaenan Hertz

Chatbots: Insurtech vs Big Tech
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Insurtech funding thru Q3 2019 has hit record levels totaling about $4.4B (approximately 60% being P&C and 40% L&H).  Surprisingly, little funding attention has been made to the “Chatbot.”  Even though the simple chatbot provides immediate benefits to customers, agents, and employees.

According to an analysis of Coverager data, there have been 5 Insurtechs funded for approximately $35M to launch chatbots specifically focused on the Insurance vertical.  This amount pails in comparison to how much traditional tech providers like IBM, Microsoft, Amazon and Google have invested in chatbot technology.  Afterall, wouldn’t a carrier like to have a chatbot as smart as Watson was on Jeopardy or as ‘helpful’ as Alexa or Siri?

Chatbots can help you:

  1. Save Time
  2. Save Money
  3. Improve customer, agent & employee satisfaction
  4. Increase customers
  5. Can decrease errors
  6. Allow you to show some humor

So where do you start?

As with any project, start with the use case.  What opportunity or problem are you trying to address?  First, identify your use case then, identify what vendor to use.

Remember, you don’t have to start with customers.  There are perhaps even more use cases for internal staff or your brokers.

Now that you have a use case and realize chatbots can help, who should you consider partnering with? Insurtech or Traditional Tech?

Partner with an Insurtech if your current tech stack is outdated and/or you want to jump start training the bot specifically for insurance.

Partner with a traditional tech company to integrate easier with your current systems and/or knowing they will be around for the long term.  Unlike Insurtechs, some of the big tech companies provide their chat technology for free!

Here are 7 traditional chatbot providers to consider

  • AMAZON: simply put AWS Lex lets you leverage Alexa’s brains. If you are an AWS user – integration is easy
  • GOOGLE: Dialogueflow integrates with lots of services and is strong on ML analytics and understanding intent
  • IBM WATSON: No this isn’t just your Jeopardy contestant. Watson also includes a process for measuring the emotion of the user and transferring the conversation to a human if the user grows angry
  • MICROSOFT: AzureBot is about building enterprise-grade bots focused on controlling the data. It integrates with Cognitive services to make interactions more human-like
  • LIVEPERSON: is a completely integrated customer service platform.
  • LIVECHAT is a platform for supporting live agents with a collection of canned responses and commonly sought info
  • BOLD360: is about “bot and agent harmony” Its software aims to blend the work of humans and AI.

Here are 5 Insurtech chatbot providers to consider

  • Hi MARLEY: Insurance focused specializing in claims, underwriting and policy interactions. APIs to connect with Guidewire and Duck Creek
  • CLAIMBOT: Mostly focused on claims-based interactions. Delivers a seamless conversational chatbot experience on SMS, Facebook Messenger and any browser
  • INSURMI: Designed to guide consumers through the entire insurance customer journey from sales to claims to customer service
  • LEO: Focused on helping the insurance agent sell and service customers 24/7
  • https://www.pypestream.com: Focuses on conversational transactions that are AI enhanced


The Path Forward

As with any activity, it’s very important to pay attention to what’s going on outside your four walls and to identify the best use case.

Look at implementing chatbots thru four lenses:

  1. Will implementing a chatbot create new value for you and your policyholders?
  2. If you don’t provide chatbots, will you lose market share?
  3. How might chatbots destroy old paradigms, ways to interact, and insurance products?
  4. How can chatbots help improve operational efficiency and customer/agent/employee experience?

Evaluating the upside and downside of any new innovation positions you to better meet the changing needs of your agents, customers, & employees.

About Insurtech Advisors

Insurtech Advisors is dedicated to helping regional insurance carriers plan for the future today.  We help you identify and partner with Insurtechs.  This enables you to thrive and continue to meet the needs of your members, employees, and independent agents.

Car Subscriptions and the Future of Personal Auto Insurance
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As we all know, Millennial consumers expect speed, transparency, & online access.  This is true whether we are dealing with consumers or businesses.  There are some interesting developments that might impact personal auto premiums.

One of the most discussed is the sharing economy.  There is a generational shift in terms of car ownership.  People want alternative ownership or usage-based models.  Layer in Uber and Lyft, and it’s quite easy not to own a car. 

Ridesharing aside, car dealers and manufacturers are starting to sell cars via monthly subscriptions.  Currently, these lean towards the luxury market and standard in the monthly fee is insurance – with very generous limits.

BMW launched a program where you can subscribe to cars for as low as $998/mo.  Mercedes Benz has a program as does PorscheAudi’s subscription includes rentals through their Silvercar rental company.

What’s the benefit.  You exchange cars when you want.  You can drive an SUV one week and a coupe the next.

Volvo’s subscription resembles cell phone financing options and isn’t as generous.  You pay a fee for 24 months and can exchange after 12 months for a new model.  They are using Liberty Mutual to underwrite the policy

At the lower end, you have startups like Fair and Flexdrive who partner with local car dealers to provide subscriptions to used cars.  Both companies underwrite through Assurant.

Why should a Carrier care?

Instead of having a pool of hundreds of thousands of potential customers, carriers may be dependent on winning a couple of large global contracts.  In this case, the personal auto business will decline while a few commercial lines carriers will benefit.

The Bulls

  • Subscriptions simplify ownership and consumers like that
  • Small businesses will like the fact they can increase or decrease vehicles as business needs change
  • The biggest carriers and brokers will dominate

The Bears

  • Consumers and businesses still want to own the vehicles
  • Profitability and risk exposure is unknown
  • It’s only attractive for a small segment of the population

The Path Forward

As with anything, it’s very important to pay attention to what’s going on outside your four walls.

Look at the move to subscription auto thru four lenses:

  1. Will this type of product create new value for you and your policyholders?
  2. If you don’t provide a similar product, will you lose market share?
  3. How might this destroy old paradigms and insurance products?
  4. How can this type of product help improve operational efficiency and customer experience?

Evaluating the upside and downside of any new product innovation positions you to better meet the changing needs of your agents, customers, & employees.

Insurance agents should partner with Insurtechs
Could InsurTech Startups Be Friends—Not Foes for the Insurance Agent?

FacebooktwitterlinkedinmailI recently wrote an article about how Insurance Agents can benefit from the Insurtech Ecosystem.  The Insurance agent or broker should look to partner with appropriate Insurtechs, thus bringing their insurance industry enhancements into their Agency and giving them a competitive advantage.

You can read more @IndAgent:  Could insurtech startups be friends not foes?

Insurtech Advisors helps connect small and mid-sized insurance carriers and agents to the advances occurring in the Insurtech space.  We do this by working individually with each partner to help them understand how to innovate and implement some of these external Insurtech ecosystem advances into their current processes in a cost and resource efficient way.  Additionally, we strategically invest in early stage Insurtech startups, where their offerings can benefit our member insurance carriers or agents.  For more information, please contact us at: info@insurtechadvisors.com or +1.929.282.2031.

3 Reasons Why Smaller Insurance Carriers Need to Leverage Insurtech Advances

FacebooktwitterlinkedinmailInsurtechs can help improve efficiency

Effective customer relationship management (CRM) is key to successful business, especially when it comes to smaller insurance carriers where the focus is on the client relationship. No matter the carrier size, speed, efficiency and effective delivery are the keys to running a successful insurance business. However, in reality, the smaller insurance carriers are falling behind on the efficiency and speed spectrum, and the innovative digital and larger insurance carriers who employ the latest tools and techniques, ranging from utilizing new data sources, robotic process automation (RPA), advanced data analytics such as machine learning and cognitive computing, to IoT (Internet of Things), are gaining market share.

These tools and techniques are increasing the digital and larger carrier’s speed, underwriting prowess and efficiency.  For instance, in one area alone, their speed in delivery of quotes (whether Personal or Commercial Lines) can be real-time and they allow binding and paying online.  Although small and mid-sized traditional insurance carriers are still in existence, to stay market relevant, and increase their growth and profitability, they need to partner with new start-ups also known as Insurtechs and firms providing technological infrastructure to insurance firms. Here are three reasons why this is necessary:

  1. Competitive-Edge:

Insurtechs have a natural competitive edge over traditional insurance carriers, because of their lack of legacy systems and typically narrow focus.  This leads to a much quicker service delivery model. What customers have expected traditional insurance carriers to deliver in weeks; Insurtechs are now delivering in minutes or hours.  So, in order to reduce the efficiency gap in service delivery models, insurance carriers can partner with Insurtech startups to yield innovation and overall total efficiency.

  1. Internal Efficiency

Legacy insurance carriers are slow in execution because the internal processes are slow, i.e. the long cycle between brokers, carriers, underwriters and customers, and lack of digitization of customers’ requirements or customer files.  If all the file work is still actually on paper and not digital or in the cloud, then it means searching for and acting on information does not take seconds but takes minutes or even hours. Thus, in this scenario the larger and more digitized carriers win again.  The small and mid-sized insurance carriers can overcome this gap by strategically partnering with Insurtechs in a very cost-effective manner.

  1. Effective and Improved Service Delivery

To compete with Insurtech and key insurance players in the industry, the smaller insurance carriers need to have an effective service delivery model, which reduces the dependence on long communication channels, and is completely customer oriented. In order to do that, and to compete with digitized larger carriers and Insurtech startups, traditional smaller carriers need to show a willingness to adapt and innovate.

Insurance service delivery models are changing, and to deliver per the changing environment, smaller insurance carriers need to start by identifying and then partnering with start-ups who are providing services to help insurance carriers adapt and work on improving their service delivery model.

Recommendation:

Small and medium sized insurance companies should start to track investments and advances that are emerging within the Insurtech community and consider partnering with Insurtechs. Partnering with Insurtechs and other digital service providers will enable these carriers to transition from a traditional service delivery model to an innovative customer-centric and technologically enabled model. Partnering with Insurtechs will not only jump-start the carriers’ digital transformation but will prove to be a mutually beneficial alliance for both sides — the carrier will benefit from new techniques and digital infrastructure such as cloud based services in a very cost efficient manner thus improving their speed to market, while the Insurtech will benefit from the carriers’ legacy customer base and industry knowledge which will ultimately improve profitability/Return-on Investment for both partners.

Insurtech Advisors helps connect small and mid-sized insurance carriers to the advances occurring in the Insurtech space.  We do this by working individually with each member carrier to help them understand how to innovate and implement some of these external advances into their current processes in a cost and resource efficient way.  Additionally, we strategically invest in early stage Insurtech startups, where their offerings can benefit our member insurance carriers.  For more information, please contact us at: info@insurtechadvisors.com or +1.929.282.2031