This latest piece is by Nikolaus Suhr, CEO of Kasko, who argues that insurance has now evolved way past the first online revolution. Where we’re going, we won’t need roads…no, that’s a different movie. In fact, Nik says that right now, we have arrived at Insurance 3.0 and it is all about the need for speed.
OK, so, the insurance industry was ripe for change in 2015 when we incorporated, and it is ripe for change now. The difference being, we were on the cusp of the wave then, and now, things are happening. In fact, we are well into it, it is not a second wave, it is 3.0 now.
A quick, loose summary of what that means before we push on.
Insurance: Paperwork, door to door salesmen, phone calls galore and stone-age speed, or lack thereof
Insurance 2.0: Basic cloud computing at the backend, emails and online ads selling insurance, but mainly, the same ol’
Insurance 3.0: Lightning speeds, InsurTech startups riding the larger FinTech wave of innovation and incumbents actually paying attention, not just writing papers that claim they can see change happening
There are all sorts of players in the game, with B2C offerings springing up all over the place, not just within a stone’s throw of the nearest start-up meet-up in Old Street, London. Across Europe, the Americas, right through Africa, The Middle East, huge parts of Asia and into Australasia, there are InsurTech start-ups making ripples in a dormant beast that has slept for too long.
Right at the start before we had even met Seedcamp, we were offering instant short term car insurance to rental car users, since then we have moved cities and pivoted our business twice.
We have gone from B2C to a B2B2C intermediation model, but as so many of the fascinating start-ups out there are finding now, scaling and user acquisition is expensive slow work when you are starting from scratch. After a meeting with Baloise in Switzerland, we took another turn and KASKO as is was born.
Around then is when we coined the term “InsurTech as a Service”, as we had created a platform that can be used to build insurance products at a fraction of the time (One fifteenth to be picky) and cost (around a tenth) it used to take incumbents insurers and MGAs with legacy IT setups.
Just to make sure, that is 4-6 weeks instead of 18 months, and €50,000 instead of €500,000. Not bad for a team of 36.
Riding the FinTech wave
But yes, the world has changed if you roll in InsurTech circles. To the consumer at the other end, the neo / challenger banks are normalising trust in FinTech startups and insurance is one of the big areas to finally see that change helping now. For the banks, people have been swayed by amazingly simple UX and to be blunt, any offering that isn’t an evil megacorp bank that caused the crash or funded the bad guys, is going to be worth a punt for the millenials.
Insurance can’t be cool, can it?
Insurance hasn’t had that problem, it has a different one, Gen X, or whoever is most important this week, simply can’t be bothered with Insurance, and why would they, it is extraordinarily abstract, complicated and some might dare to say boring. Only now that the Monzos, Starlings and N26-es of the world offer insurance right from their beautiful apps with instant sign-ups and no-calls to a salesman, are we seeing youth uptake in insurance. People are being convinced that as part of the offering for a metal bank card, they need insurance, and they are going for it (for better or worse).
Insurance is now ‘cool’, ish. Thanks to amazing ecosystems provided by these FinTechs. But for the startup going it alone, the cost of user acquisition is mental – our advice, don’t sell yourself but find a way of providing your services and front end sexiness, to the suits and their networks that have been built over decades and reach all four corners of the world. Work together.
That is how we have found our swagger, building >40 products for >20 companies in the space of 36 months.
Of course, as a flexible team with an API-led product, we don’t just build products, we can design, distribute and run digital insurance products for any distribution channel without having to re-prioritise legacy IT systems.
So what’s next for insurance? Where is 3.0 going to take us and the partners we work with?
Well, the road is long, but there are e-scooters, flying cars, political upheavals, fracking, the boring company, a super sewer, London’s TFL unknowingly creating the biggest FinTech startup in the world and private companies taking people to space. Plus, some crazy developments in science occurring on a weekly basis…
People are going to need insurance, you are going to need to build products as fast as the techies can design new services- by the by, that is fast these days.