How many times have you spent a significant percentage of your day searching your company’s database for one small, yet critical piece of information? How many times have you been hours into a cumbersome search and thought, “Does it truly have to be this hard?”
If you have ever negotiated with me, you know that I start at a central point: what is fair? My contract law professor would laugh at me right now; she declared on the first day of class that there is no such thing as "fair." I disagree. I believe that in life and business, we all have a sense of fairness. Whether we choose to follow that sense is the question.
I've been reading about the history of insurance to understand how we got here. Here's a quick story from one insurance book.
There once was a membership association called the American Insurance Underwriters (AIU). The AIU acted as an agent for member insurance companies in international markets. Each member insurance company held a percentage of the AIU pool by which payments and liabilities were assigned.
In the 1960s, an insurance company and AIU member bid on a contract to insure a large church in Boston. But the insurance company didn't bid the insurance like everyone else. Instead, the underwriting team created a tailored contract with its own rate calculations, "rather than the standard forms and prices other (AIU) insurers had agreed to use."
The incumbent insurer was not pleased:
Chris Augeri was discussing the idea of visually simulating products around the time that Tracy Morgan was rear-ended by a tractor trailer. The driver of this trailer for Wal-Mart was largely at fault for the collision. This is when Chris began to look at using these products to help avoid crashes in the future, and to better train truck drivers. He began contacting the federal government and the Global Insurance Accelerator to gather interest in his company.
At first when Chris joined the accelerator and was working on recruiting early investors, Driver Spotter was a hardware company. Some of the best feedback that Chris got from investors was that the initial start-up costs of $25 million, was too much. In order to bring in investors, he had to find a way to decrease costs. Chris decided to pivot the company, after realizing that he could bring that cost way down if he changed into a software only company. In the last round of funding, they raised $750,000, as a result of redirecting their company.
On April 27, six #insurtech startups will pitched at the Global Insurance Symposium. RiskGenius will be posting a series of articles on the Global Insurance Accelerator companies. We look forward to seeing you in Des Monies!
Steve (Pablow’s CEO and co-founder) is an avid traveler, he’s been to around 50 countries, and loves the “buzz” of going to new places. His parents immigrated from Ireland to Australia when he was one, and he used to travel a lot with his mom when he was younger. Traveling is something he loves and feels comfortable doing. He’s been involved in travel technology for the last 17 years, and the last 4 years in travel insurance. He saw a gap in the way travel insurance is created, sold, and what travelers are actually wanting for their insurance. Traditionally, travel insurance is sold in a one-size-fits-all manner, so that it can be applied to a larger number of people, but oftentimes that isn’t what customers are actually looking for. Pablow is looking to change that via predictive analytics.
On April 27, six #insurtech startups will be pitching at the Global Insurance Symposium. RiskGenius will be posting a series of articles on the Global Insurance Accelerator companies. We look forward to seeing you in Des Monies!
Hesus (CEO and founder of WeSavvy) suffered from a lifestyle that some of us are guilty of at one point or another. Poor eating habits, not exercising enough, never working off those extra pounds gained from working at a desk job or from former college days. In 2013, after having a revelation about his weight and health, he lost over 50 pounds by running and eating healthy. Despite his decrease in weight, his insurance premiums increased the next year.
Insurance companies aren’t rewarding those willing to change their lives and become healthier, thus creating the need for WeSavvy. Their mission is to put policyholders first by rewarding them for reaching their fitness goals, and to continue to incentivize them with cash/other bonuses when they increase their activity levels. This will ultimately improve their overall health and well being, while rewarding them with cash points and benefits on their insurance premiums.
Traditionally, health and life insurance is set-up so that young policyholders subsidize older ones. Premiums continuously increase, regardless of increased (or decreased) risk based on health. Often-times younger healthy policyholders end up paying more and more, which can cause them to not want to get things like life insurance, and cause dissatisfaction with their current health insurance policies and premiums.
You probably remember Watson from when this cognitive computing system defeated two human champions during a three-day match on Jeopardy. This happened about five years ago, and generated a positive PR storm for IBM and the future of AI and analytics. Even more important than the $1 million prize, was the fact that in order to beat its human adversaries, Watson could not simply just recall facts, but had to use reasoning, interpret statements contextually, and strategize.
For those unfamiliar, Watson is a “technology platform that uses natural language processing and machine learning to reveal insights from large amounts of unstructured data”. Watson performs two key functions in its commercial application; those being answer customers’ questions, rapidly interpret insights, relationships, and patterns from important information that it extracts from provided documents. IBM claims that 80% of data today is unstructured, meaning that it comes from news articles, social media posts, and other sources.
If you like this article, then you will love our upcoming ebook about Insurance Technology. Want a copy? Just sign up for our newsletter to the right and you will get a copy! Thanks for reading. -Chris
It's been a good ride over the last year for the insurance technology ("insurtech") community. In 2015, insurtech raised over $2.6 billion. In the first quarter of 2016, insurtech broke a record for money raised.
And yet, I am looking at the companies that are emerging from these fundraise events, and I keep thinking, "Really, that's it?"
There have been some outliers. Lemonade and other peer to peer companies are interesting to me because they have an opportunity to create fundamentally new technology that connects people and just happens to also provide insurance through the connection. I am still awed by the magic of Uber and I hope a Peer to Peer company can replicate that experience.
But when it comes to other insurtech innovations emerging with funding rounds -- well, I am a bit underwhelmed. I call these companies the Aggregators and the Process Improvers.