Netflix vs. HBO and the Race to the Insurance Customer

The goal is to become HBO faster than HBO can become us, the chief content officer of Netflix said four years ago.

In the insurance world, InsureTech Connect Conference founder Caribou Honig thinks traditional insurers and insurtech startups are facing a similar challenge. To him, it’s about speed.

The question is whether the innovation executives (HBO) from within existing insurance companies that have been around for 30 or 300 years can reorient their customer-facing technology in time or whether the technology-focused startups (Netflix) trying to become the next generation of insurance companies can build the strengths and capabilities that the incumbents already have.

In the long run, the winners will have to assimilate both. They will have to have both the strengths and capabilities of the HBOs and the Netflixes of the world, Honig told conference attendees.

Oliver Wyman’s Prashanth Gangu agrees that the pace of change is an issue. To be relevant in the future, carriers will need to adapt, create new insurance products and new capabilities for customers who will want them to manage their entire risk environment. “Incremental changes are not enough for incumbents,” he said. The configuration of one-on-one connections of insurer to customer may not fit the purpose going forward. Instead, carriers will need a service platform that maximizes the value of the entire ecosystem and not just one-to-one connections. That’s a tall order for carriers. But for their part, insurtechs also face a steep climb. They will need to “go beyond the low-hanging fruit.”

Eric Boyum, managing director for the technology and communications sector at Aon Risk Solutions, said a lot of what insurtechs are doing is not all that exciting but is “simply doing what, frankly, the industry really ought to be able to do.” The industry should forget the hype and embrace the cutting away of “low-hanging fruit,” he suggested.

One incumbent poised to take on the challenges of the next decade is CSAA Insurance Group, an AAA insurer. For the past six years, the home and auto carrier has been imagining a future of autonomous cars and mobility-on-demand.

The company has been reinventing its core business operations to operate in this new world. The strategy is to stay focused on customers’ changing needs and that focus suggests there may be opportunities in the blurring of lines between personal and commercial lines insurance, according to Paula Downey, president and CEO.