How NeoInsurance is disrupting traditional Insurance

Insurance Disruption

How NeoInsurance and Insuretech are changing the way we cover consumers

In my last blog we looked at a series of Machine Learning approaches for personal line insurance products. For a lot of traditional insurance companies that is seen as progression, but there nothing in that blog which is pushing the limits of what is possible in Insurance. Who is pushing the insurance field forward? It is the Insuretech and NeoInsurance companies.  

What is NeoInsurance/Insuretech?

Neo is defined as new or a modern form or development. With NeoInsurance we are looking at a modern form of insurance. NeoInsurance companies take a tech first approach to providing cover, aiming to simplify the process of obtaining cover and offer targeted cover to those who would struggle to insured by traditional insurance companies.

In a recent article on TechCrunch - Why 2022 insurtech investment could surprise you | TechCrunch, TechCrunch performed a round up of the current wins and losses in NeoInsurance and Insuretech. In 2021, NeoInsurance start-ups saw 566 funding deals to a total value of $15.4 billion in capital – a 90% gain over 2020. Insuretech is set to continue to explode in 2022.

Why should you care about NeoInsurance? Did the taxi industry care about Uber? How does the hospitality industry feel about Airbnb? They might not have been worried to begin with, but now both companies dominate their industries. Why? Because the incumbents were not fast enough to change. The big players in insurance, need to embrace new ways of working before they are over-powered by a new wave of targetter start-ups.  

GetSafe - Getsafe | Insurance can also be simple. | Download Our App! (hellogetsafe.com) are an example of a NeoInsurance company. GetSafe operate in the UK and Germany and offer cover powered by their unique platform, they replace the need for manual paperwork with smart bots and automation. They already have over 300,000 customers and that number is increasing.

As an insurance consumer, think about how difficult it is to speak to your provider because you bought a new bike, or because you inherited some jewellery. NeoInsurance is designed to simplify the process of changing cover 24/7 and empower you to always have the right level of cover. NeoInsurance is designed to understand consumer behaviors, if you insure your items outside of the home, but your GPS locations only have you outside at <5% of the time and only in your local, low risk area, NeoInsurers are developing tools to better understand their consumers to offer cover which suits them. GetSafe offer 24/7 access to your policy and allow you to make changes in real-time without having to pick up the phone and speak to someone (or realistically wait to speak to someone).

Insuretech Gateway (an incubator and VC fund) note that insurance needs to evolve to meet the new demands faced by the modern workforce. They also recognise that significant protection gaps are emerging. Two thirds of economic losses resulting from natural disasters were not covered by insurance, Insurance has avoided natural disaster because it is too hard to predict, and the cost of claims can be astronomical. They also note that the fastest growing workforce is freelancers and that 96% of freelancers do not have income protection. Insuretech Gateway are incubating start-ups to solve these problems and offer tech-first solutions. The freelance economy has highlighted that the US healthcare insurance system is not designed to support gig-based workers.

How do you transition from a traditional Insurer to a NeoInsurer?

The better question to ask is what happens if you do not? NeoInsurance is rapidly growing, and the market will become more challenging and competitive. Startups will offer hyper-focused policies based on the needs of your customers and they have already begun taking you customers. The key to survival is knowing your customers and understanding what they need, exploring segments which are under covered and using Data Engineering and Artificial Intelligence to offer targeted policies to meet the needs of traditional, new, and emerging markets.

How is this all achieved? It is through the application of Data + AI at scale. The important part of the who interaction is speed and response. It is no longer enough to just look backwards at what has happened, you need to look forward to fully understand not only how you made a sale, but why, and how many more will you make. Advancing Analytics are experts in the Data Lakehouse, an approach designed to support this exact scenario. As a quote is requested, it is sent to a live machine learning model which takes in everything we know about the customer, rather than just their initial details. By having all their data located, in a form which is optimised for hyper-retrieval we are able to make better decisions in real-time.

Advancing Analytics are a Data + AI company. We help our customers build platforms to better understand their customers. We combine Big Data and AI to allow our customers to recognize and respond to risk in real-time.

Get in touch if you would like to understand how Advancing Analytics are helping our customers disrupt Insurance with Data + AI.