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 digitized.
The question is no longer if other insurers will follow. It is a matter of when the rest of the market will catch up. The industry is on the cusp of transformation – at last offering ‘insurance as insurance should be.’ Simple, transparent and fair.
You Cannot Hide from Technology
Digitally-enhanced services are no longer a nice-to-have. Slick interfaces – be they 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.
And Qover is one start-up behind such innovation with the team defining the offering as Insurance-as-a-Service.
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 and 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 - particularly given the service already includes the required risk capacity. This avoids having to engage in long and complicated discussions with traditional insurers.
Precedent for Disruption
In truth, there is little innovation in the ‘as-a-service’ mindset. The model exists across industries. It has become so widespread that stalwarts have coined an everything-as-a-service mantra that “facilitates the flexibility for users and companies to customize their computing environments to craft the experiences they desire, all on demand.”
As-a-service models are characterized 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. Until, a decade ago, finance thought-leader Chris Skinner adapted the model to banking-as-a-service, envisaging a more user-friendly finance sector that catered to the needs of consumers.
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 on, is there any logical reason why insurance shouldn’t be delivered as SaaS?
3 Models of Insurance as a Service
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.
- Internal Process Digitization – 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.
- Core Service Digitization – Several companies have built products to service a core process within insurance. RiskPossible, for example, help 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.
- Full-Stack Digitization – 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.
How Consumers Benefit
Irrespective of the approach, the 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 personalized. 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 they are transparent, with the level of customer care a modern-day consumer has come to expect.
The Commercial Opportunity
Equally, businesses are 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 MyVanbreda network.
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 forecast 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-the-while limiting the impact on the bandwidth of the organization. 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 the change will succeed. Thankfully, insurance is finally stepping out of its outdated shadow to clinch the opportunities that lie in wait.
The industry is uniting around the service-based model: one that’s community-focused, and so set up to capitalize on the flourishing digital ecosystems that now dominate the world. There is 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.’