Welcome!

Cognitive Computing Authors: Yeshim Deniz, Ray Parker, William Schmarzo, Elizabeth White, Pat Romanski

Blog Feed Post

Insurance Disrupted - Crowdsourced Policies and Social Marketing

Peter Abatan
Program Manager
Mobility Services
Cognizant
All industries are being impacted by digital transformations and data analytics (read Code Halos) today. Social, mobile, analytics and cloud based technologies are capturing, transmitting and storing more information than ever before.  This information, or the use of information dominance as a strategy, will completely reorient the competitive landscape in many industries.  Information intensive industries, including the following, will experience the biggest disruptions:

  • Banking
  • Healthcare
  • Insurance
  • Education
  • Government
  • Media
  • etc

In this article, my colleague Peter Abatan shares his observations on digital transformations within the insurance industry.
***

The Insurance industry has traditionally been slow to change, but that is changing as crowd and social insurance models are beginning to emerge.

Companies like upstart BoughtByMany connect people with similar insurance requirements who are able to aggregate demand for products that insurance companies have hesitated to insure on an individual basis in the past.

Another start-up, InsureMyFriend embraces P2P to form a network with friends and family to lower the individual’s insurance premiums. Each approach has its benefits and both lend themselves easily to social media.  They have the potential to reduce insurance claims because consequences impact the entire group and social pressures are predicted to make people think twice about risks.

These two companies presented their business models at the London Insurance Disrupters meetup held at the end of April this year in London.

BoughtByMany has about 18,000 members in about 180 interest groups. Overall, the average discount negotiated has been around 18.6%. The attraction to the insurance companies that BoughtByMany brings, lies in the fact that the cost of acquisition is much lower relative to the other channels these insurance companies use to acquire customers, this also applies to InsureMyFriend.

Typically, 90% of their traffic is driven through Facebook in which customers join the group for which they are interested in.  Once joined, they can invite friends.

InsureMyFriend makes it possible for you to link up with friends and family that you trust and provide a way of managing the “pot of money” that you are all setting aside when a claim needs to be made. Since the syndicate is made of people who trust each other, the claims are likely to be very low.
However, if your network has too many claims, a certain percentage of the premium that everyone puts into the pot will be paid to an insurance company to cover larger than expected claims.  In the case where there are no claims, premiums are reduced in subsequent years.

This type of insurance lends itself to smaller items like smartphones and gadgets, as these are easy and cheaper to replace. Motor insurance for young people is another possibility for the BoughtByMany business model with the benefit of getting a 50% rebate or more on their premium if they can stay accident free after a whole year.  Such incentives are thought to change behaviours and encourage safe driving.

Even though social networks are the means by which groups are formed to buy insurance, this process does not lend itself to fully assessing the risk that members are exposed to. In other words the person who goes on holidays twice a year assumes less risk relative to the person who takes 5 holidays a year. Social media is less of an exact science compared to a person’s actual lifestyle and buying behaviour. Hence, while it may be that Facebook is the platform from where social and crowd insurance are promoted and grow, it will be platforms like Amazon, eBay, Walmart and JohnLewis.com where these types of insurance may flourish because they have more personal information (read more on Code Halos) on the individual and their lifestyle.

I wonder if these models alone will really disrupt the insurance industry to the extent that its current business model needs to change? I am not convinced it will.  It may require many more players in the market for the insurance sector to sit up and take notice. The biggest benefit at the moment is the low cost of acquisition for the insurer.  For customers it is the potential to get reduced insurance premiums and customized policies.

The disruption to the insurance industry may not come through crowd and social insurance alone, but through many changes that are impacting the industry at the same time:

  • Quantified self
  • IoT (internet of things)
  • Mobile technologies
  • Telematics
  • Analytics
  • Big data
  • Crowd sourced policies
  • Social insurance models
It seems, however, the biggest disruptions to insurance will likely come from businesses outside of the traditional insurance industry.

In developing countries where the insurance industry is not as mature, one could see the opportunities for the growth of social and crowd insurance where uninsured liabilities are very high and possible pay-outs for a non-fault accident are very low. It may be insurance co-operatives are formed to cover risks, rather than mainstream insurance companies. Members will own a stake in the co-operative encouraging them to take less risk in order to minimize payouts.

Today, the regulatory environment is holding back the insurance industry from going through the disruptions that has shaped other industries.  It won't be long, however, before smart start-ups will begin to find ways to work around those barriers to provide a better service to the customer and in the process change the way we relate to insurance as a whole. One thing for sure, is that very soon the way we source insurance will change from how we know it today.

************************************************************************
Kevin Benedict
Writer, Speaker, Editor
Senior Analyst, Digital Transformation, EBA, Center for the Future of Work Cognizant
View my profile on LinkedIn
Learn about mobile strategies at MobileEnterpriseStrategies.com
Follow me on Twitter @krbenedict
Join the Linkedin Group Strategic Enterprise Mobility
Join the Google+ Community Mobile Enterprise Strategies
Recommended Strategy Book Code Halos
Recommended iPad App Code Halos for iPads

***Full Disclosure: These are my personal opinions. No company is silly enough to claim them. I am a mobility and digital transformation analyst, consultant and writer. I work with and have worked with many of the companies mentioned in my articles.

Read the original blog entry...

More Stories By Kevin Benedict

Kevin Benedict serves as the Senior Vice President, Solutions Strategy, at Regalix, a Silicon Valley based company, focused on bringing the best strategies, digital technologies, processes and people together to deliver improved customer experiences, journeys and success through the combination of intelligent solutions, analytics, automation and services. He is a popular writer, speaker and futurist, and in the past 8 years he has taught workshops for large enterprises and government agencies in 18 different countries. He has over 32 years of experience working with strategic enterprise IT solutions and business processes, and he is also a veteran executive working with both solution and services companies. He has written dozens of technology and strategy reports, over a thousand articles, interviewed hundreds of technology experts, and produced videos on the future of digital technologies and their impact on industries.

@ThingsExpo Stories
DX World EXPO, LLC, a Lighthouse Point, Florida-based startup trade show producer and the creator of "DXWorldEXPO® - Digital Transformation Conference & Expo" has announced its executive management team. The team is headed by Levent Selamoglu, who has been named CEO. "Now is the time for a truly global DX event, to bring together the leading minds from the technology world in a conversation about Digital Transformation," he said in making the announcement.
"Space Monkey by Vivent Smart Home is a product that is a distributed cloud-based edge storage network. Vivent Smart Home, our parent company, is a smart home provider that places a lot of hard drives across homes in North America," explained JT Olds, Director of Engineering, and Brandon Crowfeather, Product Manager, at Vivint Smart Home, in this SYS-CON.tv interview at @ThingsExpo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
SYS-CON Events announced today that Conference Guru has been named “Media Sponsor” of the 22nd International Cloud Expo, which will take place on June 5-7, 2018, at the Javits Center in New York, NY. A valuable conference experience generates new contacts, sales leads, potential strategic partners and potential investors; helps gather competitive intelligence and even provides inspiration for new products and services. Conference Guru works with conference organizers to pass great deals to gre...
The Internet of Things will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform. In his session at @ThingsExpo, Craig Sproule, CEO of Metavine, demonstrated how to move beyond today's coding paradigm and shared the must-have mindsets for removing complexity from the develop...
In his Opening Keynote at 21st Cloud Expo, John Considine, General Manager of IBM Cloud Infrastructure, led attendees through the exciting evolution of the cloud. He looked at this major disruption from the perspective of technology, business models, and what this means for enterprises of all sizes. John Considine is General Manager of Cloud Infrastructure Services at IBM. In that role he is responsible for leading IBM’s public cloud infrastructure including strategy, development, and offering m...
"Evatronix provides design services to companies that need to integrate the IoT technology in their products but they don't necessarily have the expertise, knowledge and design team to do so," explained Adam Morawiec, VP of Business Development at Evatronix, in this SYS-CON.tv interview at @ThingsExpo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
To get the most out of their data, successful companies are not focusing on queries and data lakes, they are actively integrating analytics into their operations with a data-first application development approach. Real-time adjustments to improve revenues, reduce costs, or mitigate risk rely on applications that minimize latency on a variety of data sources. In his session at @BigDataExpo, Jack Norris, Senior Vice President, Data and Applications at MapR Technologies, reviewed best practices to ...
Widespread fragmentation is stalling the growth of the IIoT and making it difficult for partners to work together. The number of software platforms, apps, hardware and connectivity standards is creating paralysis among businesses that are afraid of being locked into a solution. EdgeX Foundry is unifying the community around a common IoT edge framework and an ecosystem of interoperable components.
Large industrial manufacturing organizations are adopting the agile principles of cloud software companies. The industrial manufacturing development process has not scaled over time. Now that design CAD teams are geographically distributed, centralizing their work is key. With large multi-gigabyte projects, outdated tools have stifled industrial team agility, time-to-market milestones, and impacted P&L stakeholders.
"Akvelon is a software development company and we also provide consultancy services to folks who are looking to scale or accelerate their engineering roadmaps," explained Jeremiah Mothersell, Marketing Manager at Akvelon, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
"IBM is really all in on blockchain. We take a look at sort of the history of blockchain ledger technologies. It started out with bitcoin, Ethereum, and IBM evaluated these particular blockchain technologies and found they were anonymous and permissionless and that many companies were looking for permissioned blockchain," stated René Bostic, Technical VP of the IBM Cloud Unit in North America, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Conventi...
In his session at 21st Cloud Expo, Carl J. Levine, Senior Technical Evangelist for NS1, will objectively discuss how DNS is used to solve Digital Transformation challenges in large SaaS applications, CDNs, AdTech platforms, and other demanding use cases. Carl J. Levine is the Senior Technical Evangelist for NS1. A veteran of the Internet Infrastructure space, he has over a decade of experience with startups, networking protocols and Internet infrastructure, combined with the unique ability to it...
22nd International Cloud Expo, taking place June 5-7, 2018, at the Javits Center in New York City, NY, and co-located with the 1st DXWorld Expo will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud ...
"Cloud Academy is an enterprise training platform for the cloud, specifically public clouds. We offer guided learning experiences on AWS, Azure, Google Cloud and all the surrounding methodologies and technologies that you need to know and your teams need to know in order to leverage the full benefits of the cloud," explained Alex Brower, VP of Marketing at Cloud Academy, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clar...
Gemini is Yahoo’s native and search advertising platform. To ensure the quality of a complex distributed system that spans multiple products and components and across various desktop websites and mobile app and web experiences – both Yahoo owned and operated and third-party syndication (supply), with complex interaction with more than a billion users and numerous advertisers globally (demand) – it becomes imperative to automate a set of end-to-end tests 24x7 to detect bugs and regression. In th...
"MobiDev is a software development company and we do complex, custom software development for everybody from entrepreneurs to large enterprises," explained Alan Winters, U.S. Head of Business Development at MobiDev, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
Coca-Cola’s Google powered digital signage system lays the groundwork for a more valuable connection between Coke and its customers. Digital signs pair software with high-resolution displays so that a message can be changed instantly based on what the operator wants to communicate or sell. In their Day 3 Keynote at 21st Cloud Expo, Greg Chambers, Global Group Director, Digital Innovation, Coca-Cola, and Vidya Nagarajan, a Senior Product Manager at Google, discussed how from store operations and ...
"There's plenty of bandwidth out there but it's never in the right place. So what Cedexis does is uses data to work out the best pathways to get data from the origin to the person who wants to get it," explained Simon Jones, Evangelist and Head of Marketing at Cedexis, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
SYS-CON Events announced today that CrowdReviews.com has been named “Media Sponsor” of SYS-CON's 22nd International Cloud Expo, which will take place on June 5–7, 2018, at the Javits Center in New York City, NY. CrowdReviews.com is a transparent online platform for determining which products and services are the best based on the opinion of the crowd. The crowd consists of Internet users that have experienced products and services first-hand and have an interest in letting other potential buye...
SYS-CON Events announced today that Telecom Reseller has been named “Media Sponsor” of SYS-CON's 22nd International Cloud Expo, which will take place on June 5-7, 2018, at the Javits Center in New York, NY. Telecom Reseller reports on Unified Communications, UCaaS, BPaaS for enterprise and SMBs. They report extensively on both customer premises based solutions such as IP-PBX as well as cloud based and hosted platforms.