How Insurance-as-a-Service can transform your business model

5 minutes to read
In a nutshell

Insurance has endured a laggard reputation for decades. However, as reluctant as the market has been to adapt to trends, the industry finally appears ready to step out of the dark ages. In fact, many in the space have already experienced a paradigm shift, proving insurance will soon be fully digitised.

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The question is no longer if other insurers will follow, but when the rest of the market will catch up. The insurance industry is on the cusp of transformation – finally offering ‘insurance as insurance should be': simple, transparent and fair.

a close-up of coding language on a computer
Digitally enhanced services have reinvented the insurance value chain.

You can't hide from technology

Digitally enhanced services are no longer a nice-to-have. Slick interfaces – whether on desktop, laptop, iPad, or mobile – are commonplace. Perfected user experiences have reshaped customer expectations, and it’s a shift no industry can ignore.

This has led to a reimagining of the insurance value chain, leveraging previously unexplored capabilities to produce a new type of digital insurance. Products that prize transparency over opaqueness; mass availability over limited access; streamlined efficiency over a painfully slow process.

At Qover, our Insurance-as-a-Service is part of this digital innovation.

Insurance-as-a-service is a 100% digital insurance offering that covers end-to-end requirements for simpler onboarding, claims management and customer support. The flexibility of a service-based, data-driven solution enables a dynamic operating model that fits any business type with a modular plug-and-play product that’s perfectly suited to digitally enabled platforms and ecosystems.

In accessing a fully-compliant solution with embedded legal requirements – including the new Insurance Distribution Directive (IDD) – global enterprises can leverage a platform that’s built-to-scale, especially given that the service already includes the required risk capacity. This avoids having to engage in long and complicated discussions with traditional insurers.

InsurTech Qover's value chain
Qover is pioneering the Insurance-as-a-Service model.

A precedent for disruption

In truth, there is little innovation in the ‘as-a-service’ mindset; the model exists across industries. It's become so widespread that stalwarts have coined an everything-as-a-service mantra that 'facilitates the flexibility for users and companies to customise their computing environments to craft the experiences they desire, all on demand.'

As-a-service models are characterised by low barriers to entry. They require little-to-no capital expenditure by the client as the service is made available to many via an infrastructure owned by a single provider, with costs shared across users. The intrinsic strength of the platform lies in its inherent scalability with few obstacles to roll-out once established.

Software-as-a-service is the most common model: as businesses build complex applications, then offer them as a simple web service where clients pay only for what they use. That is, until a decade ago, when finance thought leader Chris Skinner adapted the model to banking-as-a-service, envisioning a more user-friendly finance sector that catered to customer needs.

As he discussed in the Life.SREDA report, 'You’re probably all familiar with SaaS – it’s basically paying for applications as you use them, rather than buying them. These services used to cost you a fortune, but are now free or near enough. That’s where banking is going. Banking becomes plug-and-play apps you stitch together to suit your business or lifestyle. There’s no logical reason why banking shouldn’t be delivered as SaaS.'

A decade later, is there any logical reason why insurance shouldn’t be delivered as SaaS too?

3 key Insurance-as-a-Service models

Multiple start-ups are working on their own version of the Insurance-as-a-Service model, resulting in three distinct approaches, as identified by Anton Verkhovodov.

  1. Internal process digitisation: Companies such as Corezoid are working with partners to rebuild internal processes within a contained digital ecosystem, helping streamline administration. However, these are neither licensed insurance products nor insurance-specific solutions.
  2. Core service digitisation: Several companies have built products to service a core process within insurance. RiskPossible, for example, helps companies with underwriting while other players support customer data management, fraud detection or claims. Some focus on building a digital solution but without embedding the risk capacity, which requires the business partner to find its own insurance arrangement with traditional players. They offer efficiency in specific areas, but a limited ‘as-a-service’ model.
  3. Full-stack digitisation: At Qover, we operate via a B2B2X model that we match to partner requirements, either through standalone product development or an overarching white-labeled backend with its own license. Qover is a full-stack insurance provider with an end-to-end insurance product, complemented by a comprehensive digital insurance infrastructure.

a happy young person smiling as they talk to someone on their iPhone
By digitising insurance, businesses can deliver a more positive customer experience.

How consumers benefit

Irrespective of the approach, this industry transformation means several things. Insurance is becoming readily available to consumers directly within the digital ecosystems they already use. Technology guides, advises and keeps coverage up-to-date, allowing people to enjoy life with one less thing to worry about.

The insurance process is no longer a headache. It is an intuitive tick-box exercise underpinned by standard practice. Insurance products themselves have become personalised. Coverage adapts depending on consumer interests and behaviours, remaining relevant and tailored to current needs.

And at their core, products are smarter thanks to data-driven insights. They are more flexible, with usage-based pricing, and transparent, with the level of customer care that modern consumers have come to expect.

Change as a commercial opportunity

Businesses are equally reaping the rewards. One-stop-shops are a conduit to reduced costs or increased revenues. As-a-service delivery models ensure plug-in, scalable and consumption-based services that drive commercial growth such as those experienced by Vanbreda. Belgium’s largest independent broker leverages the Qover open API to offer employees digital-only travel insurance via its employee rewards network MyVanbreda.

Turnkey solutions also help lower the barriers to entry, avoiding the costs and complexities of partnering with traditional brokers. As noted by McKinsey, digital ecosystems are forecasted to account for $60 trillion – a remarkable 30% – of global insurance revenues by 2025. So, businesses need to act soon to capture a share of the market. Those who embrace the change will succeed.

As-a-service also enables speed and flexibility in implementation through the technical and insurance expertise of the insurance partner, all while limiting the impact on the organisation's bandwidth. In the context of Belgium’s largest real estate platform Immoweb, this meant launching ‘Landlord’s Insurance’ in a matter of weeks courtesy of Qover’s unique plug-and-play approach. By doing this Immoweb killed two birds with one stone: they offered a one-stop-shop for their clients while also generating additional revenues.

Moreover, the opportunity is limited only by imagination.

By bundling an insurance product within an existing ecosystem, service providers can even uncover points of differentiation. In 2017, Deliveroo shifted toward a service-driven strategy. The enterprise unveiled free ‘Rider Insurance’ in an effort to establish itself as the best meal delivery service to work for. With its vast community of riders, the bundled insurance coverage offers Deliveroo a competitive edge over its extremely vocal incumbent. Today Qover protects thousands of Deliveroo riders all over Europe.

‘Business as business should be’

As the world becomes increasingly connected, only those who embrace change will succeed. Thankfully, insurance is finally stepping out of its outdated shadow to seize the opportunity.

The industry is uniting around the service-based model: one that’s community-focused and set up to capitalise on the flourishing digital ecosystems that now dominate the world. There's incredible scope to technology, not least in its ability to re-imagine products rooted in history, but exactly as today’s consumers wish they would be.

In partnership with the right ecosystem, Insurance-as-a-Service could transform your model into ‘business as business should be'.

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