Is Insurtech dead before it started?
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Many people around me say that insurtech will be THE disruptor of re/insurance, but I don't think it will be in terms of advice. I believe that insurtech will be a great enabler for our business, but not a disruptor.
Take my colleagues, for example. We have a lot of smart millennials working for us here at elipsLife, and I often like to test ideas with them.
I noticed that they google everything. So I asked, "How do you choose insurance?"
Their answer was very interesting: Most said something like, "I wish I had someone to fully advise me."
So I was surprised to learn that millennials approach the insurance purchase process pretty much the same way that I do – they want to buy through someone they trust.
Why? Because insurance is probably one of the most complex and personal products that you can purchase. For complex L&H products online, unassisted sales is difficult. Building trust will take longer if we only use digital channels since there will be customers who will always prefer a person above a machine.
Giving all of your personal data away to someone you don't know for a risk assessment is a real challenge for most people… private things that sometimes your friends don't even know about you such as, what's your income? Do you have an inheritance? What's your family wealth? Do you have a luxurious lifestyle? Are you promiscuous? Are you healthy?
I am already hesitant to give this volume of personal information to a stranger, much less a robot, which is something that I cannot touch, feel or understand.
But it's when traumatic events happen – exactly the ones that insurance is designed to cover – that insurtech proves its worth. When you are obliged to give information about the death of your spouse, for example.
The claims setting is ideal for insurtech innovation because people tend to not want to dwell on traumatic experiences. When bad things happen to me, I don't like to talk about it. Disability, death, accident, etc. in these situations, both insurtech and the end customer can win from the speed and impersonality. That's why in the back office claims setting, which is driven by rationality, facts and figures, I believe that insurtech can add a lot of value.
At elipsLife, we've embraced insurtech by building one of the best digital and integrated platforms in the business.
Ultimately, we have a lot of theories about how to close the protection gap via technology, but the variables behind how much insurance a person needs will always be highly bespoke and personal… and that means – when it comes to closing the protection gap – it's all about people.
Insurtech is hardly "dead before it started," but I believe it will change our industry more on the back end than the front, the latter of which is more driven by trust, chemistry, and long-standing relationships. At elipsLife, we've become fully digital in the backend of our business, including reserving and claims. Our vision is to be a fully-fledged digital player but we will also build in personal interaction at points in the process where we believe humans are preferable to robots.
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