Oct 22, 2020

Cover Genius and Intuit to provide bespoke products for SMBs

Cover Genius
Intuit
SMB
Insurance
William Girling
2 min
Insurtech leader Cover Genius has teamed up with software company Intuit to develop insurance products specifically for small-medium businesses (SMBs)
Insurtech leader Cover Genius has teamed up with software company Intuit to develop insurance products specifically for small-medium businesses (SMBs...

Insurtech leader Cover Genius has teamed up with software company Intuit to develop insurance products specifically for small-medium businesses (SMBs).

The former company, which recently raised AU$15m for its partnership expansion plan, has stated that its first solution will be called ‘Shake Shield’ - a parametric insurance solution designed to provide swift financial support in the event of an earthquake. 

The product has been underwritten by Palomar Excess and Surplus Insurance Company, reinsured by Swiss Re and will be initially available to SMBs in the California area via Intuit’s QuickBooks.

Giving reassurance to small businesses

Both companies have expressed satisfaction with the collaboration, with each highlighting that a tech-driven response to the numerous stress factors affecting small businesses is required. 

“Cover Genius’ superior technology and customer-first approach align well with our overall strategy to deliver the right tools and services to help small businesses succeed and offer peace of mind to our customers,” said Mauricio Comi, Head of SMB Insurance, Intuit. 

“In the current climate, businesses are looking for products that can help protect them when things go wrong and Shake Shield is the first of many that we will explore with Cover Genius.”

Mitch Doust, COO for the Americas, Cover Genius, added, “Over the past few years, we have all experienced natural catastrophes like the coronavirus pandemic, earthquakes, wildfires and floods which highlight the need for businesses to receive timely financial support from their insurance companies.

“We are thrilled to team up with Intuit, a Fortune 500 company that is committed to a technology-first approach to insurance that drives better outcomes for small businesses. We are also excited to expand the collaboration into additional commercial insurance products down the line.”

Emerging themes in SMB insurance

Cover Genius and Intuit’s collaboration matches the prevalent trends in SMB insurance recently highlighted by McKinsey & Co:

  • Moving to digital insurance channels is now ‘table stakes’
  • Insurtech is becoming an ‘enabler’ or optimisation partner for incumbent carriers, as opposed to a market disruptor: 61% of surveyed companies fell into this category

The company also highlighted the following:

  • Omnichannel engagement is becoming the norm, but person-to-person customer interaction is still important
  • Commercial lines are resistant to standardisation and still require agent participation 

Achieving success in the modern market will, McKinsey suggests, be predicated on combining these four themes in a successful strategy. “Leading carriers will be those that empower the carrier–agent relationship with data and analytics while still remaining adaptable to the multiple channels that customers choose for interaction.”

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Jun 19, 2021

Insurtechs are winning the race with legacy system companies

Insurtech
Insurance
AI
Technology
Tom Allen, Founder, The AI Jou...
3 min
Insurance has long been due an overhaul. The AI Journal’s founder Tom Allen explains how innovative insurtechs are changing the incumbent narative

Nestled in its own place within the world of financial services, insurance is arguably more unpopular than retail banking.

That’s hardly surprising given that, from a customer service perspective, insurance is something of an off-kilter transaction. You pay a sizable premium in exchange for a service you hope you will never have to use. This image problem is exacerbated by ubiquitous tales of insurers not paying out when it is time to make a claim.

The insurance sector has long been due to an overhaul, and this is where the disruptive force of insurtech comes in - one of fintech’s most upwardly mobile subcategories. Accordingly, last year, insurtech in the UK alone attracted £262m in investment, a growth of 60% on 2019, according to Tech Nation. Insurtech’s momentous growth has been captured in a new report by The AI Journal exploring this burgeoning sector. 

What exactly is insurtech?

Put simply, insurtech refers to technological innovations that seek to make insurance cheaper to buy and more efficient to use. In a similar vein to fintech, the large, established institutions have been dipping their toes into insurtech, but it’s the disruptors who are genuinely looking to shake up the status quo, diving into and exploiting those areas that traditionalists have little imperative to explore.

Examples are price comparison sites (one of the earliest forms of insurtech that was eventually snapped up by the insurers it initially sought to disrupt), claims software, customisable policies, or even smart-tech-enabled dynamic policies whose premiums can fluctuate depending on changing circumstances.

The latter, for instance, could use someone’s fitness tracker or smartwatch to monitor fitness levels, thus reducing the premium of a life insurance policy; or track a GPS system that records the location of a car and assesses risk levels accordingly.

Most consumers tend to shop around for their insurance needs and perhaps end up buying their contents insurance with one provider, their car insurance with someone else, and their pet insurance with yet another underwriter. Managing all these different policies, with their varying renewal dates and payment terms can be complex. This has led to the increase in apps that pull everything together.

More prosaically, insurtechs are developing AI that uses machine learning to act as an insurance broker, eliminating the need for a human intermediary and therefore offering more cost-effective and impartial advice.

Insurtechs and risk

But there are some obstacles in the way of insurtech’s continued evolution.

Insurance companies are averse to risk. Understandably so, as at the crux of the industry is the role of the actuary, whose job it is to analyse and measure the probability and risk of future events. So it’s little wonder that there’s a reluctance among the traditional players to welcome the disruption that insurtech brings.

Insurance is heavily regulated, a minefield of legality and labyrinthine jurisdiction, which means the idea of shaking it up can be anathema. And why would they, when their old-school business models are working perfectly fine?

There’s an understandable nervousness and unwillingness to work with startups, who themselves need to work with the bigger firms in order to underwrite risk.

While it seems like a catch-22 situation, there is growing, if cautious, interest from insurance companies, who can see the benefits of insurance with a friendlier face, innovative solutions, and a competitive edge through differentiation. As that tentativeness dissipates, the growth of insurtech will gather even more momentum.

Tom Allen's analysis is based on the findings of a new report on the fintech and insurtech industries produced by The AI Journal

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