Technology is transforming the financial services industry.
With that transformation comes abundant opportunity, yet many legacy insurers are struggling to address both the changing consumer demands and the structural flexibility needed to defend competitive advantage.
Whilst many successful insurers are fast followers, a range of well-funded start-ups are addressing (at pace) a range of challenges like risk commoditisation, contract flexibility, claim assessments, payment scheduling, cost to serve, rewards and more.
There is a tipping point at which plucky young upstarts become genuine competitors and mobile digital solutions are driving the acceleration towards that tipping point.
Let’s take a look at some interesting consumer facing start-ups, who large insurers can look to for inspiration. These niche start-ups are laser-focused on the end user and what really matters to them.
Instead of paying a fixed fee, with Laka you pay based on the collective claims of everyone each month (up to a fixed ceiling).
This community-first approach has paid dividends for the brand, as not only is there a real sense of ‘looking after your tribe’, but also their marketing and advertising hangs on their customers recounting how easy it is to claim, with no depreciation or excess.
Claims are handled via their digital platform, which you can log in to via Facebook, Strava or email. It is modern, simple and plays directly to the consumer-needs of millennial cyclists.
They closed out a $4.7 million funding round in early 2020, led by LocalGlobe. LocalGlobe’s Partner Remus Brett commented on the London based start-up:
“The beauty of Laka, is it returns insurance to its pure, mutual heritage. Laka’s members and their shared interests incentivise positive behaviour which in turn benefits the entire community. These principles are over 300 years old, the difference being technology and increasing consumer awareness that traditional insurance models, with complex clauses, excesses and a painful claims process are fundamentally broken.”
Well said Mr Brett.
Pet Insurance is different to a lot of insurance, as there is a real heart to it. You are providing healthcare for a member of your family, rather than buying cheap commoditised insurance to keep your car on the road.
Waggel’s website states “Pet insurance sucks’, then rolls through an owner and pet duo who “changed it”. Their mission is to re-imagine pet insurance to make it a simple, enjoyable and digital experience.
Waggel’s USPs range from partner rewards schemes to fully digital claims, real-time claim tracking to online behaviour consultations. They also make annual donations to their charity partners on their members’ behalf.
They are making pet insurance for pet owners with a simple, single policy with no hidden nasties, no confusing paperwork or ‘gotcha’ clauses.
They also have a community where you can become a Waggeler. What’s not to love.
Cuvva started out trying to address a simple problem. No one offered short-term car insurance by the hour, and in trying to solve that problem they realised that the traditional insurance model is a bit broken, filled with time delays, middlemen, paperwork, jargon and outdated systems.
So they built an app-based service that is fast, modern and simple.
From choosing a policy to buying it, viewing your documents to getting help, everything is taken care of in the app. That’s why there is no contact number, because there are no queues on the app, no need for you to verify a bunch of personal details before asking for help and their response time in-app is less than 1 minute.
Better for the customer, but also better for the business, as they are doubling down on the most scalable channel, mobile.
At the moment they offer temporary car cover, van insurance and learner driver cover, but they will soon offer pay-monthly motor insurance that you can cancel anytime.
Also, hats off to their name, which is so enjoyable to say in the cockney tone of a young Ray Winstone.
These examples only really cover the route to market and customer-orientated insurance offerings that are entering the market. There is even more disruption occurring in the digitisation of information and digitalisation of processes within the insurance sector. If you have a digital problem that you want to discuss with a passionate group of purposeful experts, Waracle can help. Get in touch with our team today via our contact form today.