In this interview Graeme Dean, Head of Insurance, Cover Genius, looks at the insurtech landscape 2018, how to settle a claim worldwide within seconds, gig economy cover & more.
IE: A rapid roll-out is essential with any insurtech product in the current market, but how can brokers or online sellers make sure compliance is completely spot on for each country or trading bloc?
GD: We are authorised to sell insurance in the markets we operate. We run a disciplined and efficient compliance program that covers our entire operation and ensures that we meet all obligations in every jurisdiction that we do business in. The key though, is to retain a human-centred approach, at scale, for every market and every partner. How we approached GDPR compliance is emblematic.
While GDPR was a nightmare for most businesses, we were able to lean on underwriters for their guidance and we deployed our internal legal teams to truly understand the legislation, then our product and content teams were brought into the mix to design a compliant solution. An example “win” was that our GDPR statements in the policy wording are about 5 lines, whereas global insurers typically have 2 pages. By involving our product team we are able to ensure that users come first, and we’re pretty confident that users don’t want to read two pages of GDPR legalese!
IE: Global immediate claims settlement sounds a big leap forward, tell us more about how it works please, especially with complicated claims such as overseas drivers being in an accident, needing accom, flights home, medical treatment etc.
GD: The Cover Genius XClaim API, facilitates instant payments once a claim is approved. It executes payments in real time for over 90 currencies and countries and allows multiple forms of payout including credit card top-up, virtual prepaid cards, e-wallets but, most importantly, bank transfers which are notoriously difficult once you consider the lack of real time banking in all but a few countries, and the difficulties and costs associated with cross-border payments. When we turned on instant payments our NPS for claims increased beyond 80 which is considerably higher than global insurers whose NPS is typically under 10.
IE: Do you think we have hit peak insurtech?
GD: As stated, we enable global online companies to sell insurance to their global audiences. If online companies achieved anywhere near their potential it would be about £400bn that shifts from incumbents to online companies in the insurance lines that we target. Apple’s AppleCare insurance product alone has already gobbled up £6bn GWP that would previously have been covered – undeclared – by home and contents insurers. The other thing to understand in insurance is that it’s a slow burn. According to McKinsey, about 60% of insurtechs are enabling the incumbents.
Anyone who has sold into them knows it takes ages (Guidewire’s slow early trajectory is a case in point). So while we know of fintech focused VCs who have tapped out of the insurtech gamble because the growth curves are so dramatically different to fintechs, we do think the payoff will come but it will take many many years to get oversize returns.
IE: We live in a sharing/renting economy, how can cover genius help consumers get a better deal on short term driving cover, home insurance etc?
GD: We build policies that enable the World’s largest online companies to sell insurance. We’re able to win their business by taking on as much of the value chain as possible – this makes their customers happier than they would be if they were using a global insurer who tend to put risk first. We consequently manufacture policies with our partners and also co-create the entire customer experience – this novel approach is what they want to see.
IE: XCover is an off-the-shelf service for anyone who wants to sell insurance online, tell us how it might tweak localised data, so that say gadget insurance could be custom built to suit particular markets.
GD: We find that the customer needs differ in each market. For example, American car share sites use Cover Genius’ XCover platform to obtain collision damage insurance and supplementary liability policies, whereas we have partners in Netherlands who use XCover to sell excess reduction. Similarly, for online retail marketplaces, in Australia our Sunglass Replacement policy is very popular, but in UK the highest conversion rate is for whitegoods policies, particularly washing machines and dryers.
IE: Do you have any examples of gig economy cover? For example short term insurance for students doing courier work in summer, or parcel delivery at Christmas?
GD: We have short term liability insurance available through XCover platform
IE: Do you think Brexit will have any real impact on the cross border selling of insurance and the logistics of settling claims/liability?
GD: UK Companies will need to set-up international operations if the Brexit deal no longer permits passporting within the EU. For Cover Genius, given we currently operate in 60+ countries this doesn’t present a operational issue for us.
IE: Graeme, thank you for your time.