Re-Imaging the Insurance Industry: What start-ups are showing us about the future of Insurance

Re-Imaging the Insurance Industry: What start-ups are showing us about the future of Insurance

The insurance industry is ripe for disruption. If you believe that the comparison sites have already transformed the industry, think again. The AirBnB of insurance is on its way.

Innovation is driven by need. It’s no surprise then, that when we look at the Insurance industry for examples of innovation we find them clustered around specific problems.
These problems are:

• Customers expect more.
• Millennials don’t buy insurance.


So, who actually likes their insurance company? Insurance companies offer a product whose value is only recognised when the worst happens. Apart from that the most common interaction the public have with their insurance company is googling ‘Compare Insurance’ and reaching GoCompare, MoneySupermarket or the Meerkat one (Yes, Comparethemarket), and when we receive the paperwork, you find out that you’re actually insured by another company which you’ve never heard of. If you studied your policy, you would find that these insurance companies also pass the risk on to some re-insurance company that you certainly never heard of. All of this didn’t used to matter so much before, but it does now due to the changing insurance landscape. The Amazon’s, Netflix & Pret-a-Manger’s of the world are offering more to people every day, which means consumers have begun expecting more from everyone, including their insurers.

The start-ups who understand this change have the potential to create enormous value and re-shape the entire industry. Looking at the current trends in this space, I am able to outline the three biggest ones: unlocking value for consumers, peer-to-peer insurance and experiential insurance.

Unlocking Value

Prudential Vitality – Prudential is an established player in the industry who have unlocked the value of insurance by linking it with the activities people can (and often don’t) do to improve their life – and ultimately lower their insurance premiums. Being an established player, this was a bold move and created a differentiated offering that can protect the same premiums. They even used gamification to engage their clientele with the activities they offer, at the same time linking them with the price. An example of this is their collaboration with Virgin Gyms, where they gave their customers a 50% discount on Gym memberships which essentially unlocked health benefits. On top of this your use of the game is tied into your reward scheme, meaning you get further discounts on cinema tickets and other treats based on your vitality status (e.g. how often you use the gym).

Peer-to-peer Insurance

Friendsurance, Hey Guevara and Bought by Many are ushering in the era of social selling. These innovators have identified a way to leverage the price lever by using the group buying power of a peer group to dramatically lower premiums. Peer-to-peer models have proven successful in everything from customer service to financing start-ups, and provide a compelling insurance offering. In the next 3 years I expect we’ll see this business model evolve as new start-ups provide infrastructure for groups of friends or peers to create their own insurance company.

Experiential Insurance

Berkshire Hathaway Travel Insurance joins a number of start-ups who are promising to remove any friction from the customer’s insurance experience. The value is created by allowing the customer to carry on with their travel experience rather than just providing any recompense. For example, their AirCare offering will automatically book you onto a new flight if you happened to miss your connection – removing the friction from complex situations.


There is one subset of customers who are proving particularly tricky for insurers to reach, namely Millennials. Those pesky kids who have grown up in a connected world don’t just have high expectations – they challenge everything. Even insurance. In the US a recent survey by the Princeton Survey Research Associates has shown that only 10% of millennials choose to have home insurance and 13% rental insurance. They simply buy what they think they need.

There are two trends which seem to be catching the attention of millenials, while still demonstrating an understanding of their needs. From pay-as-you go models that sing to the wallets of the millennials, to Human companies, selling their products to their hearts. These start-ups realised that for millennials insurance is no longer a logical sell to the brain, but needs to be connected to emotions.

Pay-as-you go
Metromile have identified a subset of users that they can focus all their energy on – young, upwardly, mobile and urban car owners. With a laser-focus they are able to create an authentic voice, a task proven very difficult for large cater-for-everyone businesses to achieve. With new technology to monitor miles driven, they can compete on price from a different angle and they also recognise new models of car ownership and the detailed problems that urban drivers face.

Be Human
Oscar is approaching Millennials with a human offering. With the ‘no interface’ movement and a return to natural form-factors Millenials want to be human. Their distrust of large corporates is closely mirrored by their love of other humans. Using technology behind the scenes to deal with the complexity of insurance allows Oscar to create a compelling human experience that proves they understand their audience.


A lot of the innovation that we are seeing in the insurance space focuses very clearly on the consumer. Over the next 3-5 years we are going to see new data sources being created everywhere. From wearables to telematics there will be data that can be used to disrupt the innovation industry much deeper in the depths of the value chain. Artificial intelligence combined with these data sources will allow innovations in underwriting and allow new models of risk management to be forged that will allow consumer experiences to be de developed that will appeal to Generation Z. Yes. Generation Z. When those Millenials grow up and start buying insurance (from their peers) the new generation who will have even wilder expectations and an entirely new belief system will come along. If you start looking deeper in the value chain for your current innovations you might be ready to serve Generation Z when they arrive.

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About Hugo Pickford-Wardle