- 3'30 min
When start-ups shake up insurance
If insurance companies are accelerating their digital transformation in order to hold on to their position, it is because their business model is increasingly being challenged by inventive start-ups.
Big Data continues to revolutionise the business world. For two years now, start-ups have begun investing in the insurance sector, after finance and banking (FinTech). Taking advantage of this more open market, they are carving out a place for themselves with a wealth of disruptive innovations.
In the US, for example, Insurify Evia are proposing to compare car insurance service providers in a very simple way: the client just needs to send them a photo of their number plate in order to immediately receive a personalised list of provider offerings by SMS. Closer to home, French start-up Inspeer allows you to reduce your car insurance excess by sharing it jointly with other internet users.
Predictive Big Data for personalised solutions
The greatest strength of start-ups lies in their capacity to go beyond the traditional framework of insurance cover (age, state of health etc.). Their algorithms cross-check billions of pieces of data from the internet and beyond to create behavioural profiles and provide predictions. And on top of everything, they can offer a more precise prediction of the risk and therefore the possibility of offering highly personalised cover.
Trov has taken this personalisation to the extreme. The American start-up is offering to insure the objects we hold most dear, in real time, by using a simple smartphone app. As for Oscar Health Insurance, they give their policy holders smart wristbands in order to encourage them to get active. Each user must reach and exceed personalised physical activity goals in order to stay fit, while the highest performers are rewarded with gift cards or a lower price on their insurance.
Traditional insurers pay close attention to new start-ups
Most start-ups place the sharing economy at the heart of their strategy. Their instincts are strong and they are more prompt in offering products in tune with current use (flat-sharing, car-sharing and transactions between private individuals). However, the new arrivals are still a long way from competing directly with insurers. All the same, they do not hesitate to integrate them into their value chain, sometimes as investors, other times as partners.
In 2013, Axa launched the Axa Seed Factory, a seed fund for internet start-ups in the banking and insurance sector. At the end of 2015, Aviva unveiled the Open Innovation competition to identify start-ups suitable to participate in the group’s strategy or an investment programme.
Crédit Agricole Assurances in the race for innovation
For its part, Crédit Agricole created Le Village by CA in Paris over two years ago, aimed at helping new businesses grow, and plans to open twenty or so more of them in France by 2020. Crédit Agricole Assurances partnered with Le Village by CA in June 2015 to test out the new innovations with the start-ups accommodated there, including smart objects, Big Data, crowdfunding and recruitment. Internally to CAA, the Innovation Challenge, which was launched at the start of 2016, created the conditions for a common culture and the creation of new ideas. 150 participants were asked to develop their concepts during creativity workshops based around the themes of the “Insurer in my Pocket” and “The Insurer in the Sharing Economy”. Several promising projects were awarded with prizes and are now beginning the incubation phase. Other projects which did not win prizes were still very convincing and are also in the process of being developed.
The mutual model for building new offers together
Just as receptive to technological advances proposed by the “pure players”, mutual insurance companies also have a strong card up their sleeve: enhancing the value of policyholders. Some plan to finance projects or develop new products which have previously been validated by their members, in much the same way that Crédit Agricole develops apps with its CA Store community. In this way they want to demonstrate that a traditional social media can be a source of innovation.
5 French start-ups who are innovating in insurance
Last June, the specialised website Frenchweb identified 5 innovative French internet start-ups in the insurance sector. In addition to Inspeer (see above), the following have also emerged in 2016:
Shift Technology: B2B fraud detection software - http://www.shift-technology.com/
Wizzas: bulk purchase in the world of insurance - https://wizzas.com/
Fluo: bank card insurance detection app - https://www.fluo.com/
Lifesquare: white label online insurance sales platform - http://www.lifesquare.fr/