A Response to Some Insurtech Claims
There’s a popular word this year that I’m really tired of. It may not be bothering you so much, but I’ve read it so much that it’s become this year’s “it is what it is” for me.
Disruptive; adjective; relating to or noting a new product, service, or idea that radically changes an industry or business strategy, especially by creating a new market and disrupting an existing one: (dictionary.com, definition of disruptive)
Every insurance startup or insurtech company is telling us how they’re planning to disrupt the insurance industry. They’re going to single-handedly turn the insurance world on its ear by the magic of big data, custom apps, and chatbots. Here is what their story seems to be, “The insurance industry has been asking you crazy questions, ripping you off, and enriching themselves at your expense. We’re here to stop all of that.”
Over the next few weeks, I’ll give you a few statements, their implications, and (hopefully) a reasoned response to them. After a couple of hours of writing, I looked down and saw how long this had gotten. I decided that it would be serving you best by making this a short series, rather than a (very) long article. You’re welcome.
Here we go.
Statement #1: We do good!
Lemonade wants you to “Forget everything you know about insurance.” They are going to give you: instant everything, killer prices, big heart. They made a big splash recently announcing their 2017 Giveback.
Implication: The insurance industry does not do good. Insurance companies take your money, give you nothing in return and to top it all off, they don’t do any good for you, your community, or your planet. We’re the good people. Buy insurance from us and be a good person, too.
Response: I reviewed their website and I have determined that they’re not doing any more good than other insurance companies. You might argue that other insurance companies are doing even greater good than they are. I just want to give a quick thought about their “forget everything” mantra before we move to the meat of my response. I reject their “forget everything” statement. I sat at my desk with a friend of mine that’s an underwriter and we walked through the application process. It feels a lot like other personal homeowners’ applications that we’ve worked on in our past. So let’s park that forget everything bit. The biggest difference is that I don’t have an agent to talk to, I have a chatbot and a website.
On to my response on their statement. The rest of the insurance world does good, too. Let’s look at a few ways that insurance does good.
Can we stop with the rhetoric that insurance companies don’t do good?
Next time, we’ll discuss statement #2: It’ll just take a few seconds!