TLDR The volume and variety of insurance/InsurTech news is almost too much to keep track of, even if one tries to keep focus on one insurance line, one region, one company, legacy vs. innovation, etc. And of course, I like to keep up with all. Foolishly, because a jack of all trades remains a master of none, even in the digitally aware environment.
In any case here’s a sampling of what caught my attention during the past week:
Auto telematics help inform driving decisions for the elderly (and maybe create a sales opportunity for scooter sales What was rolled out originally as an app to measure driving habits for taxis and fleets by Orix Auto Corp evolved into a clever tool for the elderly and their families to broach the subject of safe driving, and whether a person has requisite driving skills. In turn, many who choose to surrender their auto driving rights have found a measure of freedom using motorized wheelchairs or scooters, e.g., devices rented by Whill, Inc. Japan Today Thanks, Robert Collins
InsurTech builds a market for a complementary product.
Equipment breakdown claims grow in a booming economy
“Equipment breakdown now rivals fire loss in both frequency and severity of claims, driven by the booming economy and human influence, according to an FM Global analysis of large property-related losses greater than $3 million released Tuesday.”
Sure, it’s one firm, but what??? Rivals fire losses for frequency and severity???
“Lack of maintenance was a factor in two-thirds of equipment breakdown losses in 2018, while nearly half had a significant human element impact or influence, FM Global said.”
InsurTech opportunity– IoT devices to monitor equipment performance, maintenance, automated repair, and controlled shut down. Keep in mind equipment failure equates directly to loss of use and profitability issues. This speaks to changes in underwriting, policy forms/exclusions, changes in indemnity paired with parametric for a new sort of indexed parameter. Business Insurance
AIG unit off the hook for non-property damage arising from flood
“A flood sublimit in a property policy applied to all losses arising out of a flood, not just property damage, a federal appeals court ruled, reversing a lower court’s ruling against an American International Group Inc. unit.”
An AIG insured filed suit for loss of use (time element) claims, a contention the appeal court said was unfounded as the policy sublimit was deemed to include all claimed losses, not just direct property losses. Policy provision/endorsement wording and existing case law- insureds need to understand and/or ensure their broker does. While this is an insurance ‘due diligence’ issue that is not new, this is another innovation opportunity- policy language/unstructured data analysis. Chris Cheatham of RiskGenius has done yeoman’s work in providing a service to allow companies to “better understand policy language and create more efficient underwriting workflows,” but that does not force a company to understand what coverage applies. Business Insurance
InsurTech opportunity- automated learning from denials of coverage– this flows both from the insured to the carrier, and vice versa. Same principle applies to analysis of litigation- learnings for all.
Which P&C Insurers Made the 2019 Fortune 500?
Let’s not consider the 500, let’s consider the top 100 companies on the list, of which 7 are P&C insurers. Why care for this article? Well, the seven firms represent $535 Bn in annual revenues, and employ in total 658,000 insurance professionals (not including those populating tens of thousands of agencies). That’s a lot of financial clout, and 658K pros (estimated one million with all carriers included)? Innovation opportunity– Think what the input from an informed constituency of that size could contribute to insurance innovation and the industry’s future but are in whole discouraged from doing so. (roll this up to the global top ten- $917 Bn capitalization, hundreds of thousands of staff)
Unleash the innovation Kraken, P&C industry, free the staff! – the only real problem that would be had will be what to do with all the great ideas. PropertyCasualty360
GetSafe CEO Predicts Lemonade Will ‘Struggle’ In Germany
“Lemonade will have to struggle in Germany,” GetSafe co-founder and CEO Christian Wiens told Carrier Management vie email. “The market is regulated and complex, and the domestic InsurTechs are in no way inferior compared with Lemonade.”
“While Lemonade is a fantastic storyteller, they concentrated on their brand and not so much on their product and technology,” Wiens said. “Germans, on the other hand, prefer to do it the other way around.”
First sentence- seems the industry cognati agree- plenty of DE innovators already in play across all covers.
Second sentence- not so sure. Lemonade has been a mostly transparent sharer of the principles behind its policy form, and certainly speaks a lot of its favorite bot, Maya. GetSafe is no technological slouch as its easy app and MGA-based operation has brought together backing (Munich Re) and leverage of changing customer needs in its property insurance platform.
InsurTech opportunity- harken back to business school– what are your market threats, and who is manifesting a potential competitor’s novelty, and can you iterate more effectively based on what new entrants are bringing to your base? Lemonade’s substantial financial backing can help them bring a ‘square peg’ to a DE ‘round hole’, so why not shamelessly and fashionably imitate? Don’t denigrate the disruptor of the disruptors- re-disrupt (is that a word?) Carrier Management
Plenty to see here, as they say, but don’t rest too long on one news feed- too much of one good thing could cause info-indigestion.
Best approaches I have found- watch what your respected connections watch and watch what smart persons in tangential industries watch- there are bound to be meaningful overlaps. Don’t limit yourself to one region’s news, don’t limit yourself to one line of thought. Read the contrarian’s point of view. And understand that the next best thought may come from an unexpected source/country/post/medium/neophyte/expert/anything.
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.
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