An experienced supporter of new #FinTech start-ups alluded recently to the fact that Disruptors may not always realise how far-reaching their disruption actually may be... If you think about virtual meeting rooms as an example, it is not just serviced office space that get's impacted, but public/business travel firms, hotels, fuel companies, etc. etc.
In much the same way, #InsurTech may not always come from disgruntled or disillusioned entrepreneurs who've had enough of the traditional insurance market and think they can do it a better way; it may in fact come from alternative industry sectors.
Following a recent Webinar hosted by TU Automotive on Usage Based Insurance, I decided to do a quick internet search to see who is getting involved. It might surprise some to realise that Vodafone are researching into this technology, but when you realise the vast potential of the smartphone, I'm sure you'll appreciate that this sort of development was inevitable for mobile service providers...
The question is: 'Who else is going to get involved?'
The private motor insurance market has faced a number of long-term challenges. Relatively short purchasing cycles mean that motor insurance policies typically come up for renewal every six to 12 months. The industry has a high churn rate, and competition is fierce for the more profitable low-risk drivers in the more favourable geographies. The removing of gender as an underwriting factor (EC Gender Directive) is beginning to have a major impact on premiums. Profitability has been the main focus for many providers, with premiums being too low and claims inflation going through the roof.