“Insurtech” developments are big news even if the tone has changed – it is less about total industry disruption and more on how new technologies can be enable change.
It can be hard to keep up with the stream of new developments so the objective of the “Insurtech Pulse” is to focus on very recent news around one specific topic.
We will cover SME, Life, Auto, Homeowners and even cross policy topics such as customer service (bots, chat) and millennial marketing. If you want to receive regular updates from The Insurtech Pulse – register at the bottom the this page.
For this issue, we consider Small and Medium Enterprises (SME) insurance.
Is the SME insurance market ready for change? According to panelists at Advisen’s Casualty Insurance Conference including: Sarah Street, at XL Catlin; John Heveran, Liberty Mutual; and Alex Schwarzkopf, Pillar Technologies – the answer is YES.
All the panelists agreed that small commercial lines are are open to significant disruption on the broker side where small premiums don’t warrant the necessary resources. Essentially the sales model is broken and change could actually grow the overall market.
Next Insurance recently changed its status from a digital commercial broker to a licensed carrier while raising an additional $83 million in financing to bring its total to over $130 million. Both MunichRe and Nationwide contributed to the new funding. Next Insurance, run by the founders of Check, Inc. aims to deliver insurance to very specific small businesses such as photographers, yoga instructors, contractors and childcare facilities. Next Insurance’s own research claims that 44% of small businesses have never had insurance. The study also found that 74% of businesses wanted their insurance coverage to start within a week, and 49% wanted it to begin the same day. This just does not happen with traditional insurers according to Next. To accommodate this requirement, Next introduced Live Certificate, offering instant proof of insurance and digital real-time policy validation. The Live Certificate can be emailed or shared with anyone as verifiable proof of an active insurance policy.
The company makes the bold claim that traditional carriers and local agents cannot provide policies tailored to the specific requirements of the thousands of different types of small businesses nor can they understand the needs of each profession so they adopt a “one size fits all” approach. Next determined that every profession has very specific requirements such as expensive and portable equipment for photographers or very distinct liability requirements for yoga instructors or child care facilities. Next started building knowledge one profession at a time and now building by adding expertise and policies.
While Next largely uses its own online application with all the insurtech “bell and whistles” such as built-in AI and chatbots, the company has branched out through a new form of distribution. One channel is GoDaddy, the web hosting company, that provides online services to many thousands of small businesses and is now able to offer business insurance. A more specific channel is the Association of Certified Handyman Professionals (ACHP) to who’s members Next provides specialty insurance replacing a previous relationship the association had with a brokerage. Next writes policies for ACHP handyman professionals that feature general liability coverage, property damage, medical claims and more and is available through the ACHP’s website.
Commercial broker CoverWallet announced that Hanover Insurance is the first US insurer to use its online B2B agent platform. Hanover, instead of finding or building an alternative direct channel for lower premium policies is solving the problem by providing agents with a consumer-facing platform for real-time quoting, underwriting, binding, billing, and servicing. Hanover is totally committed to the independent agency channel so the solution to help minimize the required agent resources required to write micro-small commercial business better fits its strategy.
- Small business owners overwhelmingly say breadth of coverage, not price, is the number one consideration when buying insurance for their companies.
- Only about half of small businesses reviewed their insurance coverage in the past year.
- Of those that did review policies, just 21 percent leverage recommendations about insurance coverage.
- The top three concerns of small business owners include data breaches, loss of employees and business interruption.
As part of the partnership Chubb made a minority investment in Bunker which also has Hiscox and American Family as shareholders.
Allstate launched ABIE (pronounced Abby): Allstate Business Insurance Expert, a chatbot to provide insurance answers to small business owners.
Allstate acknowledges that “small business owners are savvy business people who do their research when looking for solution providers.” The company says that why they developed ABIE – to help answer initial questions and make the conversation with their Allstate agent even more productive. Reading between the lines – to save agents some of the time needed to write low premium policies.
Atlanta-based digital commercial broker UnBrokerage announced a rebrand – claiming that the name didn’t tell its true story. UnBrokerage is now called Layr and was established in 2016 with an online platform for small business insurance shoppers to quote and purchase coverage from several insurers, including CNA, Chubb and AIG. It promises an online proposal in 12 minutes and access to a management portal to allow policyholders to generate certificates of insurance and/or initiate claims. A big part of its differentiation is that it offers an entirely new commercial insurance model that allows businesses to get the insurance they need (from trusted insurance carriers) without speaking to a human all while paying for it monthly on a credit card.
So much for the perception that insurance is a relationship business.
Y-Risk, a specialty underwriting management company announced GigProtect.com a website that enables independent contractors to purchase insurance and investment options typically offered by large employers. The company claims that GigProtect.com is a one-stop shop for contractors working as freelancers, working independently through staffing firms or running a small business. Products sold through GigProtect include healthcare, life insurance, professional insurance, and general liability. In reality it is little more than a nice looking portal linking to branded pages on other provider websites such as Hiscox, eHealth and Blackrock.
Y-Risk is a division of Allstar Financial Group.