Appetite for Disruption: Rise of the InsureTech App

In 1984 Motorola released the first commercially available mobile phone, the catchily entitled DynaTAC 8000X. ‘The brick’ as it was affectionately known as, weighed in at 1.75lb. (The equivalent heft of four iPhone XR’s.) A plaything of the nouveau riche, the DynaTAC cost an equally hefty $3,995, roughly equal to $10,000 in today’s money.

Only a few decades later and the mobile phone is ubiquitous and somewhat less expensive. The smartphone is now our camera, atlas, web browser, calendar, games console, entertainment centre, dating agency, encyclopaedia, reading library and for some, insurance provider.

Recent events have brought the burgeoning InsureTech app world into a sharp focus:

  • In November, New York based Lemonade announced their imminent entry into European markets
  • December saw British start-up Brolly launched their Assets feature, allowing customers to assemble their disparate covers under one roof.
  • In January, Cuvva, providers of short-period car cover, announced temporary taxi insurance for part-time private hire drivers.
  • Next month, the gestating Honcho begin beta testing their reverse auction technology.

It’s easy to forget how we got here. Not just from the customer perspective but also as an industry. Disruption is not becoming the new norm, it already is. (Read our resource here about disruption in the insurance world) InsureTech isn’t just out of the gates, it’s half way around the track; apps are reaching the ‘new’ markets that insurers once consigned to the basket of unprofitability.

The early days

Early insurance apps, (which shall remain nameless), were not much more than wrappers for extant websites or kludged web services. Limited in functionality, they brought little to the customer experience. With many lacking smart phone optimisations, users were forced to pinch-and-zoom to read tiny text, or suffer endless glitches.

Those early incarnations have done little to leverage the power of the device on which they were downloaded. Only a few years later and Insuretech apps are now rising to the challenge. By placing front and centre the kind technology and experiences which draw customers to using them, the InsureTech app is on the verge of true revolution; the realisation of the capabilities and possibilities today’s smartphones present.

The Wrisk app utilises gamification to increase levels of user engagement. Meanwhile, Lemonade’s AI chatbot guides customer through the quote process, as if exchanging messages with a trusted friend. The Kasko2go app promises to immediately assess vehicle damages and pay a motor claim in under fifteen minutes and Sherpa’s recommendation algorithm, lovingly entitled ‘The Brain’, reduces the complexities of life insurance into a simple holistic journey.

Disruption in the future

While names such as Bewicka, Goose and Kasko2go might not be well known now, they may well be in the future. As these solutions gain traction, those tech-savvy users, having grown up with the online world, will adopt such solutions as naturally as anything else in their techno-centric ecosystem.

In the same way that an Apple Watch is now more powerful than the Cray-2 supercomputer which famously outwitted chess Grandmaster Garry Kasparov in 1997, the insurance industry is empowering itself to meet the challenges of 21st century customers. Apps and device-independence are moving to the foreground, driven by customer demand for solutions which not only address their real-world insurance needs but are available at the click of a button.

Explore our insurance resources here.