Hippo and Metromile unite to provide next-gen insurance
An exciting new partnership will see insurtech unicorns Metromile and Hippo collaborate on providing next-gen auto and home insurance to customers.
Customers who purchase one will be able to save 15% on the other when combined as a bundle. Both companies are noted for offering cheaper, faster, and more flexible insurance offerings compared to most incumbent insurers, making this collaboration an encouraging precedent for the future industry.
“Offering choice and control are central to who we are and what drivers have come to expect from us,” commented Dan Preston, CEO of Metromile. “The addition of homeowners insurance through Hippo provides drivers with new options, greater flexibility and a new way to save.
“We are excited to partner with Hippo, as they, too, are creating more value as a digital-first insurer using real-time data and technology to meet the needs of today’s consumers.”
The importance of focusing on CX
A vital component of both companies’ success has been their prioritisation of the customer experience (CX), achieved through intelligent use of smart technology and intuitive digital platforms.
InsurTech Digital has already explored the necessity for incumbents to partner with tech companies in order to maintain their relevance. The emergence of inter-insurtech collaborations at the highest level could indicate that the traditional industry’s position is becoming increasingly precarious.
By leveraging artificial intelligence and data analytics, Metromile and Hippo are contributing to a transformation of insurance that is more personalised (and therefore often cheaper) than its ‘one size fits all’ competition.
The bundle offer is currently available in the US states of Arizona, California, Illinois, New Jersey, Oregon, Pennsylvania, Virginia and Washington. Following its official launch, customers in additional states will reportedly be included.
“We look forward to partnering with Metromile to offer our customers auto protection that’s blending the best of technology with top insurance coverages, just as we are on the home insurance side, to bring customers the best possible coverage and experience possible,” concluded Rick McCathron, President of Hippo.
Images sourced from respective companies
Insurtechs are winning the race with legacy system companies
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.