It’s 10:18 pm on a Friday night when the red minivan parks and scratches the door of the neighbor’s car. Clear case for motor insurance. But how to regulate the damage? Who owns the vehicle, how to reach the injured party? A call to the responsible insurance broker at this time: no indication. Only three days later, someone will be available there.
Young digital insurers turn the traditional insurance industry upside down: their offers are available all the time and everywhere, changes can be made in real time by the customer, damages can be reported directly via the app. According to a recent survey by Adcubum Deutschland GmbH, 69 percent of Germans can imagine taking out insurance completely online. And the numbers are rising: 57 percent in the previous year. Customers expect lower costs, availability in the evenings and at weekends, and more flexible contracts.
No contradiction: flexibility and insurance
How can this go with insurance, which almost everyone owns, such as the liability, household or dental insurance? Your degree requires a lot of research and proactivity of the customer. Often insurance brokers help to get through. If the event of damage then occurs, insured burrow through file folders and paper mountains: How high is the damage coverage and access the liability even with the loss of keys? Tedious and time-consuming then also the settlement with the insurance company.
Insurtech start-ups in the field of insurance technology have long relied on digital solutions. Their product has little to do with the traditional way of insuring. Emerging Insurtech star-ups pick out specific parts of the value chain and improve or digitize them. Some start-ups reinvent the processes. For example, digital insurers allow their clients to manage, expand or terminate their insurance coverage in real time, with no brokerage deadlines or paperwork.
Mobile first: insurance to go
According to the Adcubum study, many insured persons have already had positive experiences with the digital offerings – and more would be required: around two-thirds of respondents could imagine taking out motor insurance, liability insurance or home contents insurance online. After all, half of them would take out accident insurance and health or supplementary health insurance online.
A study by Bitkom Research in March 2019 comes to a similar conclusion. The pollsters surveyed about 1,000 Germans aged 16 and 16, whether they would conclude insurance exclusively by smartphone. The result: So far, only about five percent of respondents have used the smartphone to take out insurance. One third can imagine doing so in the future. Especially among younger people, readiness is around 33 percent.
Design, ease of use, simplicity – these are the promises of digital insurers that turn the annoying “insurance” issue into a simple, sustainable positive experience for their clients. Thanks to the smartphone, the customer can not only quickly get the desired insurance coverage on the move. For example, with the help of location data, he can be informed by his insurance company about existing, suitable offers, for example when he is at the airport and traveling abroad or wants to quickly assure his equipment on the way to a ski holiday.
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Artificial intelligence creates fairness for insured persons
But what about the insurance advisor on site? And is the online business safe at all? Insurtechs are increasingly turning to self-learning systems that are capable of automatically exposing insurance fraudsters, minimizing risk, or dynamically adjusting prices. Machine learning makes it possible to learn from the behavior of customers, to refine risk profiles and to determine whether a single customer is trustworthy. And that is certainly for the benefit of the community: the insurance process becomes objective again.
This is where digital insurers apply exactly where people can ever fail. They rely on the self-determination of the customer and a positive insurance experience; in an industry that at times tends to be immobile and intransparent. And that’s their big advantage: faster processes and last but not least fair, objective insurance, for example through the use of artificial intelligence. Chatbots help around the clock with questions and in case of damage. Always in the pocket of a smartphone, digital insurers are becoming a loyal companion, conveying flexibility and guaranteeing on-demand security. This makes them a real alternative not only for younger customers and the digital arts.
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Christian Wiens is the founder and CEO of the Heidelberger Insurtech startup Getsafe. His mission: challenge one of the world’s largest industries. The experienced digital entrepreneur is a trained mechanical engineer and industrial engineer with a strong technical background.