Technology, such as chatbots, will not diminish a broker’s value but will instead improve the user experience for customers wanting a direct online service for simplified insurance, says
Cove Insurance co-founder Brett Wilson.
Cove will use a chatbot to connect to its customers via Facebook Messenger and to sell fire and general products when it officially launches next year.
Wilson, who is also a former
Tower chief financial officer, said Cove is trying to facilitate a self-service portal for consumers and didn’t see that as competition for brokers because Cove’s offering will be aimed at the “simple, more widely understood end of the market.”
“Anything that needs to be tailored or that deals with slightly unusual underwriting requirements is unlikely to fit our model,” he said. “We won’t have an offline underwriting resource, or come up with bespoke terms – this is where a broker adds a lot of value for a customer.”
Wilson said Cove believed there was room in the market for a provider that focused on youth - people that might have things or buy things before they acquired items of larger value, such as houses.
“Typically (young people these days) will have a smartphone, computer and a car – so we see those as essential to the products we offer,” he explained. “Over time, we will broaden the item insurance out into a full contents policy creating a bridge between the two, so that if someone has insured a phone and a computer, it might be easier for us to offer them a bundle that covers the balance of their personal items for a marginal amount of additional premium.
“Our goal is to have a small bundle of relevant policies that would look after most people and their family’s insurance interests.”
Cove is unlikely to stretch to people who have multiple properties, and a lot of personal items at the higher end of net worth. Instead it will be useful for families and people who want to easily complete insurance transactions online, Wilson added.
“We want to enable self-service,” he explained. “It’s seldom that you can get all the way through an (online) underwriting process without being referred by a provider’s website back to a customer call line - and then you have to phone them up and go through the long winded, old fashioned way of doing business. This is what we are trying to overcome.
“I think of it as a parallel to banking where years ago, when the ATMs came along, it was fantastic because you didn’t need to go to the bank in your lunch hour and stand in a queue with everyone else to get some cash, you could go to the wall at a time that suited you.
“We’re focused on making the user experience, the customer journey, much more intuitive and able to be completed (online). When I renewed my personal insurance in the last 12 months, I went to each of those insurers (market competitors) for my car, home and content insurance and couldn’t complete with any of them, I had to phone them.”
A lot of the online services available from current providers just mimic traditional paper forms that a person or a customer representative would have completed in a branch or in a call centre.
“So, you work through a series of online forms online, it’s not a particularly enjoyable experience,” he said.
“The chatbot interface presents a much more intuitive process to work through. It’s automated, and, if you login via Facebook, we’ll have your name, age, address (if that’s available). We’re focusing on auto-completion of the information fields where possible and asking a minimal number of additional questions, and trying to make that intuitive and simple, and as convenient as possible. We’re looking to build a chatbot interface which no-one else is using to complete the sales journey.”
Wilson said Cove’s competitors weren’t using this technology for sales but mainly to answer customer service enquiries and more general enquiries. He expects to start selling towards the end of the first quarter (2018) and will phase a rollout of the firm’s products; starting with mobile phone and car insurance, and potentially electronic devices, and then moving on to cameras and contents policies during phase two.
Wilson added that Cove’s goal was, within a year (from the day it starts selling), to have a full range of personal products. Cove has signed a non-disclosure agreement with an international provider that will include bilateral underwriting.
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