Commercial brokers and insurers should have the millennial generation on their minds in order to stay relevant in the digital world, according to one of today’s leading insurtech start-ups.
Citing a study by Capgemini, specialist insurance provider Digital Risks said Generation Y consumers are more likely to buy insurance from technology companies compared to other customer segments.
“With today’s start-ups increasingly consisting of digital-native millennials, the traditional offline broker approach is no longer going to cut it,” said Cameron Shearer, co-founder and CEO of Digital Risks, a firm that provides covers tailored for digital businesses and their needs.
“It’s the Uber and Airbnb generation that we should be thinking about,” Shearer told Insurance Business in an email.
Shearer said today’s start-ups expect a seamless online customer experience, along with transparent communications, pricing and personalised products that flex around their needs.
“In a fast-moving world, risks and requirements can easily change on a month by month basis, so long-term contracts are outdated. It’s no longer enough to just sell the product and forget about it until the following year.”
According to Shearer, brokers and insurers also need to evolve to cater to the risks that businesses face today and the way that they work, with digital businesses less concerned about the traditional threats of fire, theft and flooding.
“The UK tech sector has been growing faster than any other part of the economy for several years and now represents at least 350,000 businesses, worth a combined £152 billion in revenues annually,” Shearer says. “Cyber-attacks and data breaches are two of the biggest risks currently facing these businesses, yet no other insurance provider has developed a specialist and digital-first offering that meets their needs.”
Insurance Business: What are the issues in the industry that Digital Risks hope to change?
Cameron Shearer: Unlike other online providers, which offer a simple price comparison or consolidate the customer’s risks to a single underwriter, our system considers risks individually, placing them with the most suitable underwriter – more akin to traditional broking. It’s the first of its kind online, which means more competitive pricing and better products, plus a seamless, single transaction for the customer.
We’re also challenging the inadequacy of insurance for SMEs online with monthly subscription-style products, so businesses can change or cancel at any time, without the need to project their requirements annually. That means businesses are more accurately covered and only pay for what they need.
Our flexible offering also allows us to support start-ups and SMEs with more proactive risk management, encouraging them to consider potential threats on an ongoing basis. With Digital Risks, we provide regular advice and support to help clients minimise their risk exposure, via a brand that resonates with our target audience.
IB: Where do you see digital brokers such as your company in five years?
CS: In the next five years, there are opportunities for providing ongoing risk management support to businesses, enhancing the customer experience through mobile, and using data analytics to better understand customers’ risk profiles and price premiums more fairly. Business insurance will become increasingly real-time and interactive, just like the world we live in and the services we have become accustomed to today.
One area that we can see developing is in personalisation, with insurers proactively rewarding customers for managing and minimising their risks, even by using penetration testing to measure their system vulnerability to cyber-attacks, for example.
There is also a huge role for data analytics to improve claims services, ensuring that losses can be accurately measured and customers compensated - for example, social network data could be used to understand the scale and likely cost of reputational damage following a cyber breach.
Mobile in insurance, even in personal lines, is still in its infancy but there are huge opportunities for insurers to deliver real-time and interactive information to business customers, enabling them to track their needs and cover, to be sure they have the right protection as their needs change.
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