For health and safety reasons we didn’t start a fire on the Zoom call, and neither did Billy Joel, but we did learn about the latest changes in home insurance, data and the Internet of Things.
IE; Thanks for setting this up Danny, how is Pro MGA Solutions involved with Hiro?
DM: Pro MGA Solutions is always looking to get involved with companies (MGAs) that are doing something new, different and offering the customer a better proposition. That customer can be a broker or insurer, as well as the policyholder of course. What impressed me about Hiro is that they’re building a brand not just solving a few home insurance problems with apps and data, because what they’re doing is completely different from the “sell it and forget it”, traditional approach to home cover.
IE; Krystian, everything has changed in 2020, what’s the impact been like on home insurance and where are we heading in 2021?
KZ; Well – while it’s obviously been a pretty horrible year for most people, one positive side effect of the lockdown is that it generated huge amounts of data on previously untested scenarios. For example – we had a theory that burglaries and occupancies were negatively correlated, but until everyone started working from home full time, we had no way to validate it. Now we can say with certainty that occupancy lowers the odds of a burglaryso we’ve doubled down on “simulate occupancy” methodologies, aka “Mockupancy”.
IE; Interesting, how does it work?
KZ; Ever seen “Home Alone”? It’s like a high-tech version of that! We harness smart devices like smart speakers, smart lighting, etc., and we make them behave as though you’re at home when you’re not. The key is for it not to be too regular or would-be intruders might see through it. It can also be context-aware – a video doorbell could detect that someone’s at the front door, and trigger the sounds of a dog barking or human voices via a smart speaker. It can be very authentic.
Hiro doesn’t have access to any of the data in those devices, we can’t spy on them or take control – it’s about empowering the consumer to protect their home and giving them the tools to make it happen.
IE; You chose a subscription model too, is that proving more popular like PAYG car insurance right now?
KZ; Sure, the market is changing fast and a monthly plan lets the consumer have total control. They can switch the insurance on or off like a utility – it’s more in line with other services in the customer’s life, like Netflix for example.
IE; Do you think that more technology will prompt tenants to take out Contents cover, which has traditionally been a very hard sell?
AW; It’s hard to say. But I think the idea of actively protecting your belongings is very persuasive – and our research suggests people respond very positively to the peace of mind that it provides. Even if you’re fortunate enough to never need to claim on your insurance, you can check up on your home from anywhere in the world; check that your family got home safe from work or school… I definitely think it’s easier for customers to see everyday value with a hybrid technology and insurance play like this, versus a traditional “paper” policy. Maybe if people start thinking more about how to protect their contents with technology, we’ll see that reflected in their choice of cover.
IE; So will we see more data integration in 2021 across the board, not just in home insurance?
AW; I think it’s a no-brainer, provided it’s done in a way that respects user’s privacy. It’s important to be very transparent with people about what data you’re collecting, how you’re using it, and collect explicit consent. A great part of what we’re doing with Hiro is we don’t need access to any of your personal data – it’s nothing like telematics, for example, where your insurer is actively monitoring you. We just trawl through the data, work out what actions people can take to avoid the most common causes of claims, and then try to help them act on it. In the future we want to introduce context-aware features like monitoring the national police database and warning you if, say, there’s an uptick in bike thefts in your area – “hey, here’s an evidence-based guide on how not to be a target, written by a reformed bike thief”.
IE; So Hiro becomes the local crime-fighting hero, helping you record sounds on your smart speaker and feed them through your doorbell?
KZ; It’s a cliché, but prevention is better than cure! Even during lockdown we’ve seen community spirit grow and grow – a lot of neighbourhoods have set up WhatsApp groups, for example. There’s a definitely an angle where – in the future – we could crowdsource information on incidents in your area and have a kind of “neighbourhood watch” within Hiro itself.
IE; You see some healthcare insurers or insurtechs right now building up investment on Crowdcube or other platforms, getting future customers to buy into the brand just as it’s taking off. Do you see that happening more in 2021 too?
KZ; Yes we are launching a crowdfunding platform early in the New Year. We have investors already of course, but the value of having smaller private investors joining us via crowdfunding is huge in the long run.
DM; It comes back to building your own brand and winning customers over through trust, and brand values, which is one thing that Pro MGA Solutions Pro-Global love to see as an MGA. It’s exciting to distribute new products that have a loyal fan base and develop new ideas by involving the policyholders much more than in the past. It is important that the insurance industry sets up an eco-system of prevention, as well as claims settlement.
KZ; You know there is research that says 1 in 4 people move house after burglary – they just don’t feel safe in their own home anymore. There is a long term effect on your general wellbeing which goes way beyond settling the claim and replacing damaged items.
Insurance claims are measured in money but there’s a huge, unseen mental health cost that goes along with them too.
AW; Insurance is in this weird stand-off with customers, where claims are the number-one cost centre for insurers – and if you look at the data, they pay something like 99% of claims – but then if you go to customers, 7 in 10 people say their insurer will try anything to wriggle out of paying a legitimate claim. And it comes down to the fact that customers perceive themselves as almost “competing” with their insurer over the same pot of money – in their mind, the insurer wants to keep the money as profit, and they’ll do anything to dodge a claim. But if you’re working with your insurer to protect your home and avoid those claims altogether – if you can get to a space where you’re a trusted advisor, equipping homeowners with the tools to protect themselves and their families, and maybe never even need a claim – suddenly everyone’s interests are aligned and you’re playing on the same team for the first time.
KZ; Exactly, you can call it something like “gamified coaching”. You detect a spike in car theft attempts in an area and alert your customers – they appreciate it, they’re safer, and maybe your claims costs are lower downstream too. Or even very simple things like checking the sealant around baths and showers once or twice a year – a lot of the mitigations are easy, quick and surprisingly low-tech. It;s ultimately about actionable data. Something that policyholders can use immediately, take action.
IE; Educational chat, thank you everyone.