On-demand insurance: The insurtech new normal, says Demandoo
The days of one-policy-fits-all are over, say insurtechs working increasingly towards a pay-as-you-go or on-demand model for flexible cover.
Areas where on-demand insurance is booming, include the auto insurance sector - and particularly rental transport, as well as the events industry.
The San Francisco-based insurtech, , has also announced a new partnership with UFODrive, the British electric car rental specialists to bring on-demand products to the Brazilian marketplace. UFODrive works with Tesla to provide suctomers with carbon neutral car hire services.
New on-demand sectors
But services aren't only related to the mobility and vehicle sectors. , the Israel-based insurtech that offers a range of transportation cover, has just launched a new form of cover for the entire gig economy, which is defined as a labour market characterised by the prevalence of short-term contracts or freelance work as opposed to permanent jobs.
According to , the gig economy is projected to make up over 50% of the US workforce by 2024. The market, which sees a large number of contractor-based businesses providing services, means greater flexibility on insurance is required.
Demandoo recently launched an AI-powered actuarial approach, making it simpler, faster and more cost-effective to insure temporary workers through digital apps. The benefits of the gig economy insurance are:
- Businesses can improve worker benefits and optimise budgets by only paying premiums when a worker in on-the-clock
- Workers can benefit from coverage suited to the risks of their job(s), as well as streamline and simplify the typically arduous process of filing insurance claims
- Insurance companies can significantly reduce risk/fraud and improve pricing based on personalised risk trait profiles
Gig ecomony cover explained
(CEO of Madanes Insurance Group, Israel's leading insurance group) co-founded Demandoo in 2019. Since then, the insurtech has moved from strength to strength. caught up with Madanes for a chat about the latest on-demand insurance services.
Q: What makes the gig sector such a good fit for this type of insurtech?
Catalysed by the boom in digital platform-based business and accelerated further by COVID-19 disruption to 9 to 5 working norms, the gig economy is a booming market. However, traditional insurance models meant for full-time employees are costly, complex, and not suited to the flexible working conditions (e.g. hours on-the-clock, risks) nor the new mobility models found in the gig sector.
Insurtech innovation is key to enabling the gig economy to address its evolving industry needs and keep business safe, compliant and viable.
Demandoo's vision is to be the global leader of on-demand insurance, offering both gig platforms and users innovative, on-demand global insurance solutions that fit their specific needs. Our technology seamlessly embeds into existing digital gig platforms, providing an easy-to-use experience on both the front and backend.
With data-driven pricing based solely on active usage, we power tailored insurance products that are more economical and efficient for the growing needs of the entire gig sector. For end-users, our solution enables digital claims filing that makes the reporting process much simpler and faster for gig workers.
With that said, Demandoo's offering goes way beyond just the gig sector, its solutions are relevant for any industries that encapsulate the on-demand approach (micro and shared mobility, sharing economy, fintech, e-commerce, etc).
Q: How does it work and what does it cover customers for?
Demandoo sits at the centre of the insurance value chain – on one hand, it provides customised on-demand insurance solutions for its clients' activities (B2B - e.g. companies that run a business via digital platforms used by gig workers and B2C - direct to individual independent contractor end-users), and on the other hand, it provides insurers with access to new lines of business worldwide.
Utilising its proprietary AI risk engine, Demandoo produces advanced actuarial insights and personalized risk profiles that result in significant cost savings and operational efficiencies.
Shortly we will be expanding the offering to other types of coverages, including but not limited to eCommerce Insurance, Property Insurance, Credit Insurance, and several others.
Q: Do you think this type of insurance service is the future of insurance?
The world is certainly moving towards an on-demand / usage-based approach leveraging technology and advanced data analytics, we can see this in so many industries (transportation, content, food & beverage, wellness, etc). We believe that the traditional insurance industry's "one-size-fits-all" approach is no longer relevant in this day in age, and Demandoo is at the forefront of this movement.
Q: What has the uptake been like for Demandoo and which markets (Europe/US) are you targeting and why?
While our initial product launch was initiated by the insurance needs of the growing gig economy and delivery platforms, we've quickly seen rising interest from a range of players in different industries around the world. With insurance companies as well, we have seen great interest as we can link them to new markets and innovative business opportunities.
Demandoo has global capabilities, and our solutions are geo-agnostic. Soon we plan on a significant push into some of the world's biggest markets, starting with the European and US markets (which have more orientation to advanced insurance products and earlier adoption of new business models).
Q: Which technologies are driving the platform?
Demandoo's platform is driven by its proprietary AI-powered actuarial risk engine. We use the most cutting-edge technologies to automate everything, to predict and analyse and provide the customer with a seamless experience.
Our proprietary AI engine leverages data to make the processes easy (from onboarding, through claim management, to payments and program optimisation), using chatbots throughout the entire process to simplify and reduce human error.
TrueMotion insurtech acquired by Cambridge Mobile Telematics
One of the world’s leading telematics insurtechs, Cambridge Mobile Telematics was launched in 2010 and powers 65 enterprise programmes in 28 countries.
Meanwhile, TrueMotion, which launched in 2012, has enjoyed significant success as a telematics operator, raising US$10mn in its seed funding round in 2010, and then partnering with the motor insurtech Noblr in 2019.
TrueMotion has also entered the European market, collaborating with LB Forsikring to promote safe driving in Denmark.
The joining of the companies means TrueMotion’s 150-strong workforce will join Cambridge Mobile Telematic’s already established team, along with their client list, which includes Travelers, Farmers and Progressive.
The new company will focus on increased interest in using telematics for crash reconstruction in personal lines claims and more innovation in the telematics space.
Speaking about the acquisition, William Powers, CEO and co-founder of Cambridge Mobile Telematics, described the move as an opportunity to explore new markets, expand throughout the US and bring telematics to a much wider customer base.
"With this acquisition, we will use our world-class talent, technology, and scale to help our partners overcome the complex challenges of global road safety,” he added.
Ryan McMahon, VP of insurance and customer affairs for Cambridge Mobile Telematics, explained that by expanding the company with additional talent and customers would help meet the demands of a growing telematics market. He also quoted data from a study by J.D. Power which revealed that personal auto telematics users have doubled in five years to 16% of policyholders.
McMahon told the press, “This market is rapidly expanding, and building more capabilities is more important than ever,” McMahon says. “Both companies follow similar philosophies and grew up in similar ecosystems, and now we’re bringing those cultures together.”
He continued, “Telematics is absolutely the future of commercial auto and rideshare, and it’s kind of a step up beyond the normal telematics."
McMahon added, “We will not only widen our lead in smartphone telematics, but also use our combined talent to invent new products for risk measurement, contextual telematics, and crash mitigation across emerging mobile, IoT, connected-car, video, and sensing technologies.”
Five reasons why telematics is in demand
1.It reduces fuel costs and increases operational efficiency. This is a consideration for most commercial fleets given the rising costs of fuel
2. The technology enables fleet managers to plan operations with greater precision by providing exact locations, timescales and speed of vehicles.
3. It improves driving standards and monitors driver behaviour, minimising detours and ensuring responsible driving.
4. It helps fleet health and maintenance by monitoring the health of operational vehicles.
5. It increases corporate social responsibility in terms of care for the driver, the vehicle, the impact of driving in terms of emissions, and also the security of the vehicle itself.