The only thing that is certain about the future is that there is a constant change, which creates surprises and risks around every corner. This week's surprise is Wow Air's financial failure ̵
While most of us may regret Wow's closure far from, Wow's instant shutdown was a cold splash of reality to thousands of people stranded far from home. Many thousands of other people have permanently lost their prepaid flights. The airline's insolvency is not covered by most travel insurance policies. Some of these purchases will be covered by credit card companies, but many real people run into a risk and are now lost substantially when they encrypt to buy their flights again via another operator. [i]
This is just an example of how change creates surprises and risks. Management of change and risk has always been the insurance area. Our industry is capable of helping people cope and give them a small measure of security in the middle of an uncertain world. Since this world is in the midst of great change, we should also be in the midst of anticipating how we can cover these risks and how we can serve those who are guarded.
Travel is a great place to start. We know that travel arrangements are in flux. High-speed trains in Florida and California may be the forerunner of more rail travel. Autonomous techniques can contribute to fewer personal vehicles. Younger generations rent longer than owning a home. Distracted driving increases. The sharing economy allows homeowners to rent out their homes. It also contributes to a growing supply market.
In Majesco's recent management report, we build a business model for future insurance customer . We look carefully at how investigated consumers who make or share insurance decisions make their own relationship with insurance. We also investigate how up and coming technology and lifestyles are set to influence insurance product and service. In last week's blog we told why business models have to change to meet future customers. In today's blog we will give an insight into why future products and services must also change. To do so, we should look at two types: current and future lifestyles and current and future technologies
Reduce Payment Value and Subscriptions
Since cloud technology and subscription-based services are growing (and they are growing), future customers are looking for simplification of products and services to free themselves from many different payments to uniquely different units. Customers will ask, "Can't I just consolidate all these services under the same umbrella so I don't have to track every source of recurring transactions?" This can very easily be a disruption to insurance because some efficient consolidators are already there. The insurance companies should note the very high penetration of Amazon.com accounts into the Gen Z (83%) and Millennial (89%) segments (see Figure 2). If Amazon decides to enter the insurance market, they have a large built-in base of loyal customers who look after them for almost everything in their lives. These segments are not "indoctrinated" in the way older / existing insurance works and they will work with companies like Amazon – whose processes already make them comfortable in other areas of their lives.
Insurance products and services that fit the future customers can look much more like Amazon services than our traditional products today and cover more areas of life with less division between types of insurance. Can travel insurance be combined with life or car insurance? Would we change the definition of what a "whole life" policy is and what it covers?
Removing Art Mistakes and Sharing Economies
Platform companies like Fivvr.com and Freelancer.com allow people to Make money from their talents and passions by connecting them to companies that need their skills for specific projects or for limited engagement. The latest research by Upwork and Freelancers Union estimates that 56.7 million Americans worked as freelancers in 2018, an increase of 3.7 million from 2014. [ii] Our research has shown that there is a stable range of 10% to 20% over all generations who have worked as an independent entrepreneur in the Gig economy.
Platform companies such as Uber, Lyft, VRBO and Airbnb allow people to free their assets from limiting personal use and adjusting their time by connecting them to people who are willing to pay to use their assets or services on request. Because many personal assets such as cars, homes, or homes in the home can mean significant periods of unused and cost to their owners, these platforms provide millions to make money on a scale that was never possible before.
Our survey confirms that the consumption of services in the sharing economy is very strong and growing. Rideshare services like Uber and Lyft have been used most by all generations (compared to other sharing platforms tracked in our survey), but above all by Gen Z and Millennials. Gen Z-participation jumped sharply from 45% to over 60% this year. Gen Z had a strong 10 percentage point bullet in the use of home or home rental services, while Millennials showed a 9-step increase in renting a car through a service like Zipcar or Turo. With this increase in use, there will be an increase in new insurance and risk products.
The need for insurance for the liquid to shift back and forth from personal use to business use has been a major challenge for the industry. In the United States, rideshare insurance is available from at least a handful of carriers in all states, but there is still an underserved market estimated at 50% of all rideshare drivers without coverage. [iii] In some ways, finding products and services that fit the future customer can have more to do with a business model shift than a new product and service shift. It will have to happen before the other is possible.
Coverage for homesharing hosts is somewhat behind the ridesharing coverage. When the industry has grown, confusion has also arisen over coverage options. The NAIC suggests that the hosts can purchase a rental policy or rent only for guests who can prove that they have their own homeowners, tenants or personal liability insurance. [iv] ISO filed home management coverage options in 2016 and some major companies such as Allstate and Lexington (AIG) offer specific homeehare policies. [v] Slice has established itself as a front runner in this market with its innovative mobile managed, on-demand, pay-per-use home insurance supplement. But in many ways, this market is still "up to ceiling" and can be open to further innovative thinking. How can insurance companies create a complete insurance picture that does not leave uncomfortable gaps between owners and tenants?
Current and Future Technology
If the insurance companies are serious about developing products and services that help individuals and companies handle the world's future changes and surprises, they will also be serious about using connected devices and future technology to reduce the effects. of surprises at their companies.
Connected devices create a digital ecosystem that is an ideal environment for insurers to start protecting themselves and their customers. Because they use connected devices to develop new products and services, open new distribution channels, improve processes, and improve customer engagement, they will also use them to predict weather, unit failure, health issues, and behavioral changes. Connected devices to more than report; They can also provide valuable information and recommendations reduce the risk to their customers who are covered.
In our 2017 survey, fitness trackers were the most widely used monitoring devices for all
generations. The popularity dropped slightly this year, especially among Boomers, but fitness trackers still have one of the highest penetration rates for all connected devices.