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image If 40% of the U.S. and EU business owners do not have property and liability insurance, and 70+ % are underinsured, and the existing market is already more than US $60 billion in premiums, is there not an opportunity for growing the commercial line business, particularly for small and medium size enterprises (SMEs)? Of […]
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Patrick Kelahan is a CX, engineering & insurance professional, working with Insurers, Attorneys & Owners. He also serves the insurance and Fintech world as the ‘Insurance Elephant’. Just as swallows return to Capistrano, the insurance innovation world returns to Las Vegas for its InsureTech (sic) Connect conference, this year attended by 7000. Well, if Jay […]
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TLDR For the common good the policyholders will corporate with each other. The contribution of the policyholders is considered donations. To help those who need assistance, all their policyholders will pay their share. The liabilities are shared according to the pooling system of the community and losses are divided. According to compensation and subscription, […]
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image TLDR “If you wait by the river long enough, the body of your next article will float by.” (apologies, Sun Tzu) ” My colleague and friend, Thomas Verduzco-Weisel asked me recently about articles I write, “Do you keep a topic list or inspirational thought list?” I wish I was that organized and purposeful. My […]
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You don’t have to look very far to find an active insurance ecosystem- just visit the neighborhood insurance agent or contact a commercial broker. They have been fostering the ecosystem method of serving customers since before the term was moved into the front row at the innovation and InsurTech get-together.
TLDR. Read any of the volume of current discussion regarding insurance ecosystems and you’ll find references to smart device apps, on-demand, shopping or ride sharing companies that are adding insurance options (Paytm and LIC, Amazon and Acko, Flipkart and Digit) but these are not surprisingly in insurance markets that are developing through a ‘digital native’ business culture. Ecosystems per se have been a difficult ground up start in more developed insurance markets, e.g., U.S., Canada, and Europe. But what of the US and Europe- forget being part of an ecosystem?
A quick look at defining an insurance ecosystem finds:
Ecosystem- “An ecosystem is a new business paradigm in which firms use digital tools to leap over traditional industry boundaries or forge partnerships.” (WHY ECOSYSTEMS ARE THE FUTURE OF INSURANCE, Accenture).
Huh. Leap over traditional industry boundaries or forge partnerships.
Or this-
“we suggest that middle-market insurers may want to consider expanding their horizon well beyond the standard product and service options they typically offer policyholders (see figure 2). This would involve creating or joining a much broader ecosystem offering a wider range of business support solutions, as well as facilitating educational and networking opportunities for customers.” (Building new ecosystems in middle-market insurance, Deloitte)
Hmmm. Offering a wider range of business support solutions, as well as facilitating educational and networking opportunities for customers.
I suggest if we look past the urge to see ecosystems as a new paradigm in developed insurance markets you will find- the agency model. Not just the independent or captive agents who are churn and burn lead chasers, but the agents who have a holistic approach to building relationships (old school suggestion of recognizing inter-connectivity of business- nascent ecosystems.)
Digital ecosystems such as are noted above typically didn’t begin as systems; they were applications. WeChat was launched in 2011 as a mobile chat app by China digital giant, Tencent. Within four years it had developed by the popular demand of users and affiliate companies into being a 200 million users per month- wait for it- ecosystem of users and providers. The application was adding value to what was originally a form of communication. It was accessible, easy to use, had features that were meaningful in daily life. It’s said that WeChat was the impetus behind the explosive growth in use of QR codes in China.
How does that tie into insurance, or insurance ecosystems?
There are tens of thousands of insurance agents in the U.S. alone, each of whom is working to build business, retain customers, increase the actual or perceived value customers find in the agent’s service, in other words- working to sell a reason for the customers to interact with the agency more often than once per year.
Smart agents have figured ways to do this for years before digitization- sponsor little league, be active in the chamber of commerce, bring a dish to pass at the service organization luncheon, donate bicycles to good readers at school (Chris Paradiso !), names on bowling shirts, filling sandbags, holding a customer’s hand when a claim occurs, referring the accountant next door, keeping a bank account in the local 1st National, keeping abreast of business and tech changes, and so on. Building the value he/she could bring to customers, being a resource.
How is it that agents can be the insurance ecosystems of today? If in China- have your QR code on WeChat, of course. Piggyback on the platform Tencent has constructed. But in mature markets where the insurance industry has tenure, the model has it’s own reference- ‘legacy’- and the availability of carriers is a fractured confusion to customers?
Active agents have the basis- relationships with collaborative businesses/organizations, and a pool of mostly content customers. How might the agent leverage these resources?
There are agents who are working to perfect targeted ecosystem plays, e.g., cyber insurance (Brett Fulmer, Joe Hollier, Ben Guttman in the US), or in unique SME plans (Michael Porpora ), or in facilitating service tools for high net worth customers (Kurt Thoennessen). A very good example of building an ecosystem/resource platform is Pat West whose firm, Hedgequote’s primary function is to be a resource for those needing information on insurance and potential firms from which to purchase.
I regret I do not know many agents working outside of the US, but some good examples who are building services beyond the basic sales model include Muhammad Ayodeji working in Lagos, Nigeria, (who in addition to representing insurance well posts traffic and accident updates through Twitter), or Mark Callanan in Sydney, Aus, who investigates crop and parametric options for the farmers and farm landowners in the country. And one never knows- the transition that German insurer DFV-AG has forged from being a more traditional carrier to digital expert may lead the firm into digital ecosystem land.
The point is that ecosystems can be insurance businesses that truly offer a wider range of business support solutions, as well as facilitating educational and networking opportunities for customers. Perhaps a clever player will build an ecosystem of business connections that is a digital repository of business links. Ecosystem is still be defined- agents can evolve beyond the world of sales quotas and discussions about premiums.
“Alexa, who does my insurance agent recommend for plumbing repairs?”
Patrick Kelahan is a CX, engineering & insurance professional, working with Insurers, Attorneys & Owners. He also serves the insurance and Fintech world as the ‘Insurance Elephant’.
I have no positions or commercial relationships with the companies or people mentioned. I am not receiving compensation for this post.
Subscribe by email to join the other Fintech leaders who read our research daily to stay ahead of the curve. Check out our advisory services (how we pay for this free original research).
TLDR Having the correct idea for underwriting, distributing, selling, adjusting, or scaling insurance may not be the right idea if the scheme is introduced or sold where the customer understands the plan but simply doesn’t accept it in cultural context. How and where one sells an idea in the connected global insurance industry might just be more important that what is being sold.
I had a great discussion with a very clever InsurTech company this week, Uncharted, a digital insurance sales facilitation and distribution entrant focused on health benefits and business SME markets (check out their website in the link- I won’t do their concept the justice they can). They are Singapore-based, building toward a global reach. The firm’s Chief Commercial Officer, Mark Painter, held my attention regarding how the firm was building its sales and distribution tools with the intention of giving carriers and brokers options and efficiencies from point of sale right through home office underwriting, binding and admin of data. Taking the teeth out of the unstructured data beast, so to say. Mark (who’s a pretty savvy finance and insurance guy now working alongside Uncharted’s founder, Nick Macey) recounted a recent experience in introducing the Uncharted system into a southeast Asia market carrier’s system, excitedly advising that significant sales admin improvement for the thousands of field agents will or had been gained for the carrier. That’s very cool.
But my follow-up question was: If the carrier’s products are traditionally sold by agents say, working off of scooters, meeting with small shopkeepers over tea, or noodles, and with the bound policy traditionally taking a few weeks to present to the insured, will an ‘instant’ policy innovation resonate with the known culture of doing business in the neighborhood? Will an app-based policy hold the same ‘worth’ to that analog customer? It might if the businessperson is comfortable with the growing use of digital ecosystems, it might not if the owner is not.
How the customer expects to transact business is the key- are you practicing innovation from the customer backwards?
Well this prompted a comparison discussion of what the firm is working with in Zimbabwe, where most residents/customers transact business through smart devices using EcoCash, a mobile payment platform hosted by local telco, Econet. In this instance EcoCash has an approximate 80% market use penetration, and as such adding services to the ecosystem is an accepted practice. A company looking to make inroads into the market would be wise to joint venture with or leverage the Econet ecosystem rather than try to make inroads through traditional agencies. However- once established in the market the firm would be better able to bridge to traditional insurance channels for more complex covers, riding the market awareness built through use of local, accepted practices. Know what and how the customer expects to transact business and go with that flow. It ofttimes does not matter how wonderful your product or service is if the customers simply are not accustomed to how you market. The correct answer is not always the best answer.
There are plenty of examples of companies ‘growing’ their insurance products organically through other business relationships built through understanding local needs. Take for example the relationship of ride sharing platform Go-Jek and one of its investor firms, Allianz X. The ride sharing startup was a target of Allianz’s investment, but Allianz also recognized with Go-Jek that the drivers needed insurance, and the two firms collaborated within the bounds of the business model and driver culture to make insurance available within the local reach of drivers. Don’t be surprised if a similar insurance partnership approach isn’t carried into east Africa’s burgeoning ride sharing environment as the pair of firms extends its reach with their investment into Uganda-based ride hailing entrant, SafeBoda (a timely share by you, Robert Collins ). Innovation and marketing developed from business and local culture needs.
There are many examples of firms developing insurance innovations, many successful and many not so much. The takeaway for the reader from this posting- the firms noted above are working to apply clever innovation based on good ideas, but also on integrating the ideas into what fits a respective market’s expectations, and what businesses and customers are accustomed to. Ground-breaking innovation might succeed by circumventing that of which a market is accustomed, but in most cases a firm’s best investment is understanding what the locals want and how they want it, and simply following their lead. Is your approach just a correct answer, or the right answer?
Patrick Kelahan is a CX, engineering & insurance professional, working with Insurers, Attorneys & Owners. He also serves the insurance and Fintech world as the ‘Insurance Elephant’.
I have no positions or commercial relationships with the companies or people mentioned. I am not receiving compensation for this post.
Subscribe by email to join the 25,000 other Fintech leaders who read our research daily to stay ahead of the curve. Check out our advisory services (how we pay for this free original research).
Reposted from April 2018, as it is Chinese New Year for Zarc Gin, our regular Insurtech Expert based in China.
A couple of weeks ago, there were rumors of Walmart purchasing U.S. Health Insurer Humana.
I’ve written about the U.S. healthcare market a few times and thought this news was rather interesting.
As I started researching this topic, I decided to take a look at the U.S. healthcare market a bit more broadly.
During my research on Walmart and Humana, I uncovered some interesting facts and figures which help to further shape my opinion on the opportunities I see in the future of the U.S. healthcare industry.
While the initial sections are numbers focused (be prepared for a lot of numerical data!), I do touch on technology as well later on.
As such, I have structured this week as follows:
Getting a bigger slice of the $3,300,000,000,000 pie
There have been a number of large potential mergers in the U.S. Health Insurance & healthcare space, including:
Albertsons and Rite Aid also happened this year which, according to this article, included 2,569 pharmacies (the other 1,932 of which were transferred to Walgreens as part of another deal.)
As I read more and more about these various deals, both qualitatively and quantitatively, it became more clear what was going on.
And then, I read in this article, the following quote from Walgreens Chief Medical Officer Dr. Patrick Carroll:
“Why not use those locations as a strategy for healthcare?”
Then it all made sense. Allow me to share.
According to the Center for Medicare and Medicaid Services (CMS) National Health Expenditure Data (NHE), NHE grew 4.3% to $3.3 trillion in 2016, or $10,348 per person, and accounted for 17.9% of Gross Domestic Product (GDP).
Healthcare expenses are $3.3 trillion in the U.S. alone. That’s $3,300,000,000,000, folks.
I was curious as to what that $3.3 trillion broke down into, so I started digging deeper.
Included in the CMS link above are tables that have a number of ways to analyze this expenditure data (24 different ways to be exact).
If you are interested, please look for this link on the page:
Table 4 in the Zip file had some really interesting data:
Zooming in on that data, I found some even more interesting numbers:
Of the $3.3 trillion being spent on Health related expenses, $2.8 trillion was being spent on Personal Health Care ($2,800,000,000,000).
That’s a lot of money.
And of that $2.8 trillion, $2.2 trillion is being funded through Health Insurance.
That doesn’t tell the whole picture though.
What do all these (potential) mergers mean?
In addition to the research I found above, I found some more stats which painted a much broader idea about the conclusions that I was beginning to draw.
US Health Insurer market share
According to Health Payer Intelligence, in 2016, the top 5 health insurers payers in the U.S. are:
With a population of 326m people in the US, these 5 companies have coverage for 162 million people (or 49.7% of the population).
Pharmacy market share
In terms of prescription revenues, the pharmacies in the US are split as follows:
And in terms of number of pharmacies, the top 10 can be found here (according to SK&A Pharmacy Data):
Pharmacy Benefit Manager market share
Pharmacy Benefit Managers (PBMs), according to Wikipedia, are third party administrators that ‘are primarily responsible for developing and maintaining the formulary, contracting with pharmacies, negotiating discounts and rebates with drug manufacturers, and processing and paying prescription drug claims’ and ‘As of 2016, PBMs manage pharmacy benefits for 266 million Americans.’ (that’s managing the prescriptions for 81% of the population…)
According to Statista, in 2016, the market share is as follows:
Pulling it all together
Looking back at the potential mergers mentioned in the first section, we have a high possibility of:
Not to mention the fact that United Health Group (#1 Health Insurer in terms of revenue and subscribers) owns Optum Rx (third largest PBM). They have upped their health care presence in the past few years by buying MedExpress Urgent Care, which has 203 locations.
One may think that Anthem (#2 Health Insurer in terms of revenue and # of subscribers) is missing out, but maybe they have some benefits to sitting on the sidelines and it’s no wonder there is some chatter relating to potential antitrust violations within these deals.
If I look at all of these facts and figures, it looks like these companies are aiming to build mini ecosystems for their customers, in an effort to start getting a bigger piece of the $3.3 trillion mentioned before…most specifically, the $2.8 trillion being spent on personal health care.
After all, if these companies can offer it all ‘in-house’; meaning prescriptions, simple doctor visits through their in-store clinics and a mechanism to have it paid for through Insurance benefits, then consumers may only need to go to hospitals for specialist visits and more serious ailments. This should ultimately lower the cost of health care, while also shifting some of that $2.8 trillion to some different hands.
How Technology can help
Technology will play a key role in enabling this to happen.
Ecosystems
From that article, I analyzed the Online to Offline (O2O) capabilities within their Ecosystem:
Online through use of the Good Doctor app, a policyholder can:
Offline, Ping An has developed a network of hospitals, physicians, pharmacies and more, which will allow the policyholder access to services they can’t get through the online platform
All of these players are aligning the essential businesses in order to build these ecosystems. The Insurers already have relationships with the hospitals as well, which should help in bringing it all together.
IoT
Florian Graillot, Insurtech influencer and partner at astorya.vc recently wrote a great article in Coverager on Digital Health. A few points he mentions:
Having more information on customers and being able to ‘track’ their health, will help to fuel the ecosystem. This will enable all the participants in the value chain (doctors, pharmacies and Insurers) to know more about their customers on a real time basis, hopefully helping with more preventative measures and ultimately bring costs down. As Florian states, ‘Insurers need to develop an ecosystem of technologies and startups around them to address their current challenges: increase number of touchpoints with customers ; understand behaviors to better prevent risks ; and reduce costs of healthcare.’
I highly suggest reading the full article.
Blockchain
Health Insurance probably has the most amount of data being transferred than other lines. This is due to the numerous amounts of players involved in the process as well as the amount of information on a customer that can be available.
Further, Health Insurance data is the most personal of personal data.
As such, something like blockchain, to help with the transfer and security of data seems like a solution that can help.
A Blockchain Health Alliance including Humana, Quest Diagnostics, Multiplan, and UnitedHealth Group’s Optum and UnitedHeathcare units has formed recently in an effort to ‘improve data quality and reduce administrative costs associated with changes to health care provider demographic data’.
Further, CB Insights has done a study on ‘5 Blockchain Startups Working To Transform Healthcare’.
Which ‘category killer’ will reign supreme (if at all)?
When it comes to ‘category killers’, two of the biggest and most famous are Walmart and Amazon.
We have been focused on Amazon coming into Insurance so much. I wrote about this earlier this year, when Amazon, JP Morgan & Chase and Berkshire Hathaway teamed up to announce that they would be ‘partnering on ways to address healthcare for their U.S. employees, with the aim of improving employee satisfaction and reducing costs’.
I am still bullish on the prospects of this venture and I know Amazon knows a thing or two about building an ecosystem and how to use data. However, the potential of Walmart buying Humana does have me very intrigued.
They have a massive head start to Amazon in terms of building their healthcare ecosystem. After all, it was only 3.5 years ago that they announced the goal ‘To Be The Number One Healthcare Provider In The Industry’. This includes:
Further, earlier this week, Walmart announced a redesign of its website and Amazon ‘put a pause on its plan to sell prescription drugs to hospitals’.
Summary
OK, are you still with me? I know this has been a long article.
This topic interests me because it has been the single most mind-boggling item for me to deal with since moving back to the U.S. I can’t believe how complex the system is here as well as how expensive it is.
It is really an area that needs a lot of help.
I know some of these mergers as well as Amazon’s foray into the larger picture of U.S. Health Insurance are still hypothetical. However, they are important to monitor for the future of healthcare for people living in the U.S.
In addition to these events from the large Health Insurance incumbents and tech players, I also wouldn’t discount some of the work that Oscar are doing, as well as AXA, which has recently entered an agreement with Oscar and also acquired Maestro Health.
Now that I have looked at the breakdown of spending a bit more, I do believe the companies spearheading these large mergers are aiming to provide their customers with preventative measures, ‘offline’ one-stop shops (clinic plus pharmacies) and online facilities (teleconsulting and pharmacy refill/delivery).
This will ultimately help them with getting a bigger piece of the $2.8 trillion.
Let’s hope all these efforts also help to reduce that actual dollar amount from a consumer spend perspective.
Stephen Goldstein is an experienced Insurance executive and Insurtech dealmaker with a core focus on growing revenue, launching go to market initiatives and advising industry leaders.
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The Theme last week was Tech giants are serious about insurance
The Theme this week is Insurtech action from China. The Chinese market is a fast growing one for InsurTech. It can be enlightening to see, compare and learn from the Chinese market. We look at 3 news stories illustrating this theme. These stories illustrate actions made by China, from China and for China.
For more about the Front Page Weekly CXO Briefing, please click here.
For this week we bring you three stories illustrating the theme of Insurtech from China.
Story 1: Insurtech is the future infrastructure of insurance, says ZhongAn CEO
Extract, read more on Reinsurance News:
“A joint report by the recently-launched Fintech Research Institute of China’s largest online-only insurer ZhongAn and the financial advisory firm KPMG claims insurtech will enable a more efficient, compatible, balanced and humane insurance ecosystem.”
This is more like a perspective by China (Zhong An), but it is a perspective based on actions in motion. Zhong An has been building its multi-industry ecosystems including auto service, consumption, financing etc. since its founding. Ecosystem is all about partnerships and collaborations, and InsurTech is the core of those partnerships.
Story 2: China’s Attention to Israel Smart Vehicle Market Creates Insurtech Opportunities
Extract, read more on The Times of Israel:
“The Chinese auto industry is yearning for smart-car technologies. In December 2017, the National Development and Reform Commission, China’s chief economic planning agency, revealed a three-year plan highlighting the development of the smart cars industry as a national priority. Without a doubt, by 2020 one in every two new cars sold in China, the world’s leading car market, will be an intelligent one.
Despite popular hype pertaining to autonomous cars, most people don’t understand how highly dependent these cars are on a sense of place. This means that if the map the autonomous car is relying on to navigate is wrong, then the autonomous vehicle is bound to make mistakes as well. French mega insurer AXA for example, is one of the many car insurers tackling this issue.”
The causality chain is a little long here. In short, the promotion on electric cars in China can create new business opportunities for auto insurance and InsurTech can be a big part of it. This is actions from China.
Story 3: Munich Re strikes Insurtech partnership with Plug and Play in China
Extract, read more on The Intelligent Insurer:
“Munich Re has partnered with Plug and Play, a Silicon Valley-based accelerator and corporate innovation platform, to collaborate with emerging Insurtech startups in China.”
Actions for China. Munich Re has been cultivating in Chinese market for a long time. Plug and Play just started its InsurTech program in China this year. They are tapping into Chinese InsurTech from all aspects from accelerating startups, sharing innovation with incumbents etc.
As a market, China has great potential both in individual business and corporate business. As an innovation base, Chinese InsurTech is equipped with mobile Internet features. Either way, it is an attractive destination for global insurance industry.
Zarc Gin is an analyst for Warp Speed Fintech, a Fintech, especially InsurTech-focused Venture Capital based in China.
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Prediction #2 from my 2018 Insurtech predictions focused on 2 buzzwords that I thought would be quite prevalent this year; API and Ecosystems.
For APIs, this centered around a couple key premises:
There are quite a number of companies within the Insurance industry now offering APIs across the Insurance value chain. There have also been a number of new API announcements over the past couple of months.
This week, Clearcover, an Insurance MGA headquartered in Chicago and currently selling auto policies in California launched an expanded API offering for its product.
I had the chance to catch up with Clearcover’s CEO and Co-Founder Kyle Nakatsuji to learn more about his background, how Clearcover compares to other incumbent and startup Car Insurance companies as well as what their expanded API offering is all about.
Kyle’s background and why he started Clearcover
Kyle started his career as a startup attorney. In 2013, he left to co-found American Family Ventures (the VC arm of American Family Insurance) along with Dan Reed.
‘I spent four years there investing in all sorts of really cool insurtech startups. At the beginning, we were mostly investing in software companies that sold to the Insurance industry. Towards the end of 2014 and early 2015, Insurtech started gaining momentum and people started getting interested in the category. We started to see all sorts of really interesting startups that were no longer just doing things that were adjacent to Insurance, but were actually trying to be integrated in the insurance value in a more meaningful way,’ Kyle explained to me.
He went on to add, ‘One of the things that we got really interested in as we started exploring Insurtech more in-depth was this idea we called incidental Insurance. What we believed was that if you could use a modern technology stack and APIs to integrate Insurance more naturally and seamlessly in places where it was going to be highly relevant to people, you could give them great customer experience, make the product easier to buy and use, and also save them a lot of money because you could avoid spending on things that end up driving costs.’
With this in mind, Kyle left American Family Ventures in 2016 and founded Clearcover with co-founder Derek Brigham. They decided that Car Insurance was the right line of business to start experimenting with this model.
‘In P&C, we thought that the last fundamental distribution innovation was back in the 1930s, when GEICO started selling its product without the traditional commissioned agent. In doing so, they were able to dramatically change their cost structure as an insurance company. Because of that, they were able to offer the product for less money. Fast forward 80 years, the Internet came around and it changed how much money people spent or where they put their money, but it didn’t fundamentally change anyone’s (Insurance carrier) cost structure the way that the first distribution innovation did. So, when we looked at what categories where customers serve to benefit the most from the affect of our distribution and business model, it was clearly Car Insurance.’
Clearcover went live with auto products in California February of this year. As of today, they have sold over 6000 policies with annualized written premium approaching $10 million USD. Their premium run rate for the year is $17-18 million USD.
Clearcover’s Value Proposition
When it comes to startup Car Insurance providers in the US, many look to Root and Metromile.
Both are fully-licensed Insurers, have raised some recent large funding rounds ($90m Series E for Metromile and $100m Series E for Root) and have Usage-Based Insurance (UBI)offerings within their products.
Further, because they are fully-licensed Insurers who file quarterly earnings, their financials are regularly analyzed by Insurtech Influencer Matteo Carbone and Deputy CEO of P&C Partners for SCOR, Adrian Jones (a great quantitative analysis I must say!).
While these type of UBI offerings can be an interesting propositions for consumers, they are not for everyone. ‘With a lot of these UBI-based products, you have to drive around for a while before you can get a quote. It’s not the type of system which lends itself well to relevant moments, because you have to commit to the insurance process for a very long time before you can make a decision,’ Kyle shared with me.
Personally I agree. While I like the concept of UBI, it is a bit of a commitment to me in terms of time and my personal data that I am not willing to give.
Building on the concept of incidental Insurance which Kyle mentioned to me above, is where Clearcover stands out in the current new offerings of Car Insurance in the US.
‘Kudos to them (Root and Metromile) for positioning and marketing this way. For us, we have an Insurance product that doesn’t have a lot of complexity to it and is of really high quality, which also doesn’t require you to do much different than you would do if you were buying from a GEICO, Progressive or a State Farm. The difference is that the technologies that we’ve built allow us to deliver a better customer experience at a much lower price. Further, the use of integrated channel partnerships and our API to deliver the product in moments when it’s relevant to people allowing us to be more efficient with our advertising marketing money compared to what incumbents and startups spend,’ Kyle said.
‘When we launched, we began with a product called Quote API, which helped us to work with price comparison engines and neo agents (digital agency platforms). These were places where the customer is already looking for an Insurance quote. The Quote API also works in places like online shopping for a car, financing for a vehicle and online personal finance managers. We think these areas were where we thought seeing an insurance quote would be relative to people and signed up a whole bunch of partners really quickly to use that API.’
Expanded API Offerings
‘What we’re now launching is an expanded API platform with more integration options for a partners outside the insurance industry so we can go directly to a consumer whether it’s when they’re shopping for a car, financing a vehicle, managing their personal finances, getting a loan, looking for ways to save money on bills, exploring different vehicle options, etc.’
‘There’s all sorts of opportunities for us to now say, look, you are doing something where Insurance is relevant, if you’re interested in saving a bunch of money, here’s a really easy way to start and finish that process with Clearcover. We’re expanding the breadth of opportunities to bring Insurance to people when it’s going to be relevant to them, but the time in which they can go from interested shopper to Clearcover customer [and all while saving a bunch of money] is the fastest it’s ever been,’ Kyle explained to me regarding their new API offering.
‘By the end of Q3 2018, we should have somewhere around 20 integrations live and that’s just the beginning.’
Some of the companies they are working with are Cars.com, Gabi, Insurify and The Zebra (to name a few). They are also starting to add more independent agencies as they continue the move some of their business online.
If you are interested in learning more about their API for your business, visit this link. A further write up of their expanded API from Clearcover’s VP of Product, Adam Fischer, can be found here.
Summary
As I was preparing for this article this week, I was speaking with one of my closest friends, who is in the tech industry. I told him that this week’s article was on APIs. His reply was ‘oh, are APIs now the buzzword for Insurtech? That’s soooo 3-4 years ago, bro.’
Well, we know the Insurance industry has taken some time to catch up to the rest when it comes to digital and innovation. Once we are in it, though, there is no turning back.
There are a number of reasons why the API is important to the Insurance industry. As mentioned at the beginning:
Ryan Hanley, now CMO of Bold Penguin, wrote a very interesting article last week about the value of APIs. In this, he highlighted the APIs of Lemonade, Ask Kodiak, Roost, Bold Penguin and Risk Genius.
A list of all Insurer, Intermediary and Enabler APIs can be found here from Coverager. You can also find links to many of the Insurance APIs themselves here.
Looking at all of these offerings, one can see that APIs are adding to the flexibility that needs to come into our industry.
What Clearcover is doing is leveraging the concept of that flexibility along with the power of the ecosystem (the other buzzword mentioned in Prediction #2) to create cost-savings that they pass along to customers in the form of significantly more affordable car insurance paired with great service.
The combination of these two buzzwords and the concept of incidental Insurance may help to turn it from a product that is sold, not bought, to one that is bought without the need to sell.
Stephen Goldstein is an experienced Insurance executive and Insurtech dealmaker with a core focus on growing revenue, launching go to market initiatives and advising industry leaders.
Get fresh daily insights from an amazing team of Fintech thought leaders around the world. Ride the Fintech wave by reading us daily in your email.