Early in April it was reported that one of the new-style phone app insurance providers had secured $45million funding, bringing its total backing to $85million.
This level of funding underlines an important growth area for insurtech – one that draws on the lifestyles of the millennial generation, the needs of the sharing economy, and in particular the power and ubiquity of mobile phones and apps.
Trov, the company in question, is trying to develop a solution for on-demand insurance that will enable users to buy cover for specific products and timeframes through a smartphone app. Another company, TRiCE, is about to go live with a similar concept that enables consumers to buy annual and temporary cover after answering only a handful of questions.
Insurance when you want it, how you want it
Smartphones capitalise on the needs and preferences of today’s ‘always connected’ consumers, who like to organise their lives online and make purchases through mobile technology. Consumers want speed and control, self-service, products and services that are ‘on demand’ and tailored to their particular needs. Smartphone apps provide this flexibility and focus.
According to Deloitte’s 2016 Mobile Consumer Survey, 81 per cent of adults in the UK have smartphones. That’s a huge route to market for insurers and the ability to reach customers through smartphone products is already shaping insurtech in many areas.
Pioneers such as TRiCE, Metromile, Cuvva and Slice are all exploring the rich potential of apps for everything from monitoring driving performance to pay-as-you-drive insurance and bespoke cover for independent workers in the sharing economy.
Disrupt or be disrupted
Many insurance products no longer fit the needs of today’s digitised and sharing economy, or the lifestyle and aspirations of members of the millennial generation. This means that insurers must work with technology partners to create connected solutions that bring products directly to consumers through their smartphones.
If insurers fail to act, others will step in – not least mobile network providers, who can enter the insurance market by using their existing connection with customers. To a degree that’s already happened: O2 is the first mobile operator in the UK to offer a car insurance service, O2 Drive, via a mobile app.
At RDT, we help insurers adapt to market and economic changes and Trice is one example of a recent client development. We work closely with our insurance partners to create digital solutions, using highly developed data enrichment, that meets the needs of their customers and create competitive advantage.