On a mission to restore trust
It might be a complex and difficult challenge for large, incumbent carriers to embrace new technology, but they must find a way to do it if they are to compete going forward, said Dylan Bourguignon, chief executive of so-sure, an insurtech company offering mobile insurance and which returns a percentage of the premium to customers if there is no claim.
Bourguignon said the use of such technology will be vital for the industry—but insurers should also regard it as only part of the solution and that many will require a far more fundamental review of their company culture, policies and procedures.
“We are an insurtech company so it is naturally key to our strategy. Leveraging insurtech is essential for incumbents if they wish to address their customers’ distrust of insurance—let alone engage with their insurer,” he said.
“The incumbents have too much legacy in their IT and processes which makes it very hard for them to rip out the old to redesign the new. However, addressing fundamental customer insurance needs is not resolved by tech alone. A complete rethink with a consumer-centric approach is required.”
Bourguignon said that so-sure has taken advantage of data and technology to create new and innovative products. “We use data and technology to go beyond creating new products: we created a new insurance model.
“We are addressing the fundamental problem in the consumer market, which is distrust. We have taken insurance back to its 17th century roots, with a true mutual/social model using 21st century technology and data to make it scalable,” he said.
Technology can also prove key to addressing the protection gap; he said so-sure is addressing this challenge by designing consumer-centric, relevant and reliable insurance products.
“The insurance industry likes to say that individuals are not insured enough. However, can consumers be blamed when there are many insurance products that don’t do what is written on the tin, and you see the detail only in the small print?
“We are on a mission to restore consumer trust in insurance and as an industry we won’t resolve that problem or increase share of wallet if we allow bad or useless products to be sold,” Bourguignon said.
He added that part of the solution can be found in the use of micro insurance, although he also expressed a word of caution on exactly how this challenge is tackled.
“If micro insurance is addressing a core need, then absolutely. However, my limited understanding of emerging markets suggests that health insurance is one of the core needs: people in the middle classes can bankrupt themselves through medical bills.
“If micro insurance is applicable in a reasonable and sustainable way, then that is great. If it is just another means for insurers to make money at the consumer’s expense, then it is not contributing to promoting the value of insurance, which would be sad.”
But, he stressed, insurers have a long way to go in terms of innovation before they reach customers’ ever-growing expectations, informed by the age of technology.
“If you consider the pace of innovation in the industry, the question is: is it fast enough for whom? It’s probably fast enough for the industry, as the incumbents haven’t experienced much innovation throughout the preceding decades,” Bourguignon said.
“However, from a consumer perspective, I believe the answer is a resounding no. Nowadays, technology allows consumers to have items delivered to their front doors the same day they ordered them. But it can take weeks for an insurance claim to be processed and settled.
“Insurance has some way to go before it matches up to consumer expectations, when the bar is being set very high by other industries. Insurance must adapt and catch up fast.”
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