Insurance is a trillion-dollar industry, and it’s also one dominated by very old institutions. So it’s catnip for disruption. And a big part of this inevitable disruption of the insurance industry will be driven by user-generated content (UGC).
InsurTech startups, as they’re known, are promising to make insurance less of an adversarial industry and more customer-focused.
Just think of the number of times you have felt like punching a member of a claims department when they’re supposed to be providing a service you have paid for. You’re not the only one: only 42% of customers think their insurer can be counted on to provide good service.
This doesn’t seem right.
— Neos (@getneos) January 25, 2017
Many of these InsurTech startups are promising to improve their service with UGC. From wearable technology to social media data mining, here are just some of the practical ways UGC will revolutionise insurance.
1. Help customers fill out forms
There’s nothing more boring than typing in your details, particularly if it’s for an insurance policy.
Digital Fineprint, a startup which has just been accepted on the Accenture accelerator scheme, can fill out insurance application forms automatically using social data from Facebook and LinkedIn. They say ‘conversion rates increase by up to 400%, users are happier and we help to build a stronger engagement between the insured and the insurer’. Sounds good to us!
2. Keep customers safe and healthy
The Internet of Things is helping insurance companies get closer to you to ensure you stay safe. It’s not altruistic; it means you’re less likely to put in a claim.
For example, the health insurance company Aetna has plans to make the Apple Watch cheaper for its customers to help them hit their exercise targets. Warning: there have been studies that show that people wearing these fitness trackers can end up losing less weight due to inflated expectations. So keep the scales, you still need them.
We’ve already spoken about Liberty Mutual Insurance, who partner with smart-home technology company Nest to provide its smoke and carbon monoxide monitor to customers free of charge. Customers feel safer (because they’re using the monitor) and noxious gases won’t poison them. The insurers also get more data, and customers even receive a discount on their insurance premiums for their cooperation.
3. Sell more policies
30% of consumers would never choose an insurance provider without reading at least one piece of user-generated content. The car, home, pet, travel and life insurance company LV= uses reviews to maintain an open, honest and transparent relationship with potential or existing customers. This has helped the insurance company in many ways – from reassuring customers to climbing up the search pages.
4. Prove customer claims using UGC
UGC has been invaluable in proving insurance claims. In a car accident? Take a photo to prove what really happened.
But you’d better watch out! You can invalidate your claim if you share a snap while you’re on holiday. Posting photos of you sipping a mojito on the beach could alert burglars to your absence and make them more likely to pay a visit to your house.
A spokesman for the Financial Ombudsman Service said, rather sensibly: ‘It’s possible that your insurance cover could be affected if you explicitly announce your plans on social media. You wouldn’t put a poster up on your front lawn saying you’re going on holiday.’
5. Help set policy prices
Some brands are using social media to find out more about their customers. Post a Facebook message with too many exclamation points and you might be impulsive and possibly prone to accidents (of any kind!). Your policy suddenly might become a little more expensive.
Through data, personalisation and AI, we're on the cusp of 'smart insurance' that can know what people need insurance for before they've even thought about it. - Highlight to share -
Selfies and questionnaires could also be used to determine your real age (forget about when you were born). For example, the ‘Vitality Age Calculator’ reveals your body’s true age and tells you about the effect your lifestyle is having on your body (groan) and what that means for your life expectancy.
And there are yet other exciting developments in the InsurTech pipeline.
For example, insurers could look at your Facebook profile and use your location status updates to work out both how often you travel and also where you travel in order. They’ll use the information to determine your policy – so you won’t have to count on your fingers.
Or what about this: the security provided by Blockchain technology could mean you receive compensation automatically without going through claims departments. Getting rid of this step would also reduce premiums – making it easier and cheaper for the customer.
So there you have it – insurance is having its moment of personalisation.
The brands involved are finally realising they’re the professionals and better at knowing what people need than the people are. Through data, personalisation and AI, we’re on the cusp of ‘smart insurance’ that can know what people need insurance for before they’ve even thought about it.
The question is – will a customer trust an insurer enough to let them sort out their policies for them? We’ll let you refer to number three again.