The days of traditional fixed-term insurance policies (and traditional providers) could be numbered. By leveraging digital technologies, newcomers to the Swiss insurance scene are giving policyholders a fresh take on how to insure the things that matter to them. All it takes is a smartphone. Yet for the new breed of insurers, insurance is also about creating a community – and with “lifestyle-type” mobile apps giving instant access to services and claims functionality, young insurtechs are finely attuned to the digital engagement of users.
1. On-demand insurance
On-demand insurance is just one of the innovations nibbling into the business of traditional insurers – in Switzerland also. Swiss startup Lings is the first Swiss on-demand insurer. Instead of blanket household policies, Lings offers short-term single-item coverage limited (currently) to camera equipment and bikes. Through a mobile app, people simply pick the equipment they wish to insure, and can activate and deactivate cover at will. Claims are equally easy to submit and, with T&C that fit on a couple of pages, Lings promises less quibbling about payout eligibility.
2. Peer-to-peer insurance
Another Swiss startup is Versicherix: its planned peer-to-peer (P2P) insurance, still at the incubator stage, looks capable of challenging the whole idea of a single entity (in this case the insurance company) having stewardship of customer data, policies and pricing. Versicherix offers a blockchain-based platform as the foundation of its peer-to-peer network, making it unnecessary to have a central authority at all. Like Lings, Versicherix aims to make insurance truly customer-centric, and eliminate overhead for customers by “democratizing” the insurance business.
3. …powered by new tech
Insurtechs startups make some big promises. But they could progress fast – not least because they are stripping complexity out of the IT systems that power their business. Using microservice platforms, on which complex apps are built flexibly as independent services, companies can create new functionality quickly and economically, which removes many of the insurance industry’s formidable barriers to entry. A combination of digital technologies such as IoT, smart contracts (digital contracts executed by the consensus of computers) and artificial intelligence will enable these insurtechs to take the industry in a completely new direction.
Traditional players with their legacy IT and business models might need a fresh start to keep up. Some are already testing the waters. Lings, for example, was founded by Generali insurance, as a way to seed innovation across the Group. Others could follow –perhaps deciding that “if you can’t beat ‘em, join ‘em” is indeed the best response to new agile competitors in a fast-changing industry.
For ideas from Cognizant on how insurance companies can chart a stable course through the changes in the industry, download our white paper Insurance at the Intersection. You can also find specific case studies here.