First, it was fintech, and now it’s insurance. Entrepreneurs around the world are beginning to tackle one of the most obtuse, least understood industries out there. From car insurance to cyber insurance, consumer protection is among the most old-fashioned, analog services in existence, and ripe for an upgrade. Luckily, startups are starting to take notice.
Drones to driverless cars, hoverboards to healthcare: the breadth and depth of things needing fast, efficient, modern insurance is growing by the day. Unfortunately, the insurance industry still hasn’t caught up to the needs of the modern consumer. Insurance companies rely on systems built around paper documents and cold calling. It’s a very personnel-heavy industry: more than two million jobs result from the insurance industry alone. By one estimate, there is an average of three duplicate processes within each customer sale. All this inefficiency leads to a terrible customer experience.
Customer experience is just one facet of the change taking place. Millennials are another big driver for entrepreneurs looking to update the insurance experience. As the largest demographic in the marketplace, millennials have different expectations for how service should work. According to IBM, nearly three out of four millennials prefer to resolve their own customer service issues. They want digital solutions, preferring technology to human interaction. Most of all, they don’t want a company to waste their time.
The combination of these factors has led to some smart, creative solutions from startups around the world seeking to revolutionize the insurance industry. These companies are putting new emphasis on speed, better information, and digital solutions. Here are three standout companies revolutionizing the insurance industry.
Jooycar improves car insurance
Jooycar is a hot new startup out of Latin America taking car insurance to the next level. While not a direct insurance provider, Jooycar gives savvy consumers a new way to find the right solution for their driving style.
Jooycar’s platform turns your car into a SmartCar, tracking driving behavior in real-time to give you a snapshot of your travel history, vehicle diagnostics, and driving performance. With this information, drivers can save money, time, and angst when selecting the right car insurance for their personal habits. Jooycar’s device removes the experience of dealing with an inefficient, insurance agent, long online questionnaires, and obtuse questions about driving habits. Instead, drivers instantly see a digital snapshot of their performance and can select a smarter insurance solution.
Jooycar is using some seriously advanced technology to provide firsthand information for a consumer looking to save time and money on their car insurance. Each consumer gets a telematic hardware device and an account to access its car-connected services both through a portal and mobile app. The device sends feedback on things like driving style, travel history, damage reports, car performance diagnostics, geofencing alerts, and more to provide a comprehensive overview of the driver’s needs. With this information, users save an average of 40% on their insurance bill by selecting a smarter policy for their unique habits.
Oscar offers customized healthcare insurance
Healthcare is a hot topic in the US — and one of the more complex and headache-inducing industries to try to sort out. Enter Oscar. This company is a “better kind of health insurance company” now valued at $1.5 billion just a few years after its launch in 2013.
Oscar is a millennial-friendly healthcare solution that focuses on design and technology to provide comprehensive, customized care. The company uses an online search function to let patients search for their symptoms, and then match with a doctor that suits their needs. With the Oscar app, subscribers can manage their digital ID card, prescriptions, find doctors, and receive perks from step-tracking and other activities. Oscar focuses on services that make life easier for patients, including free generic drugs, free calls to doctors, and a handful of free primary care appointments.
Of course, the impact of politics has been felt throughout the health insurance industry, and the jury’s out on the promising future of Oscar. It will be interesting to see how the app can continue to offer its premium service within the changing regulatory environment of the healthcare industry. Regardless, take note of the way this startup has tackled the overall experience of shopping for and interacting with health insurance.
Lemonade changes home and renters insurance
Speaking of a great digital experience, Lemonade Inc. is the first peer-to-peer insurance company that uses a bot, called “Maya,” to customize home and renters insurance. It’s the perfect solution for the sharing economy and for commitment-phobic millennials seeking to protect their stuff.
Millennials want to drive cars and live in nice houses without the responsibility of owning them. A Goldman Sachs report found that 60% of millennials would prefer to rent things like homes and cars rather than own them. From Zipcar to Airbnb, anything shared needs to be protected.
Lemonade is making the insurance process simple, straightforward, and transparent: perfect for those customers who don’t own property or have the time to understand complicated contracts and premiums. With renter’s insurance starting at $5/month, Lemonade takes a fixed fee out of a customer’s monthly payments, pays reinsurance (and some unavoidable expenses) and uses the rest for paying out claims. The model treats premiums as if they were still a customer’s money and returns unclaimed remainders in their annual ‘Giveback’ feature: leftover money is donated to causes policyholders care about.
If you’re doubting the appeal of this model, don’t. In 2015, they raised $13 million in funding led by Aleph and Sequoia Capital. The company reports that 87% of their customers are first-time insurance holders, indicating millennials are flocking to their model in droves.
The average consumer needs effective, comprehensive insurance now more than ever. Between Jooycar, Oscar, and Lemonade, we’re excited to see how the industry will rise to the challenge.
