EXCLUSIVE: ‘Someone To Watch Over Me’ – Nicolas Serceau, Moonshot Insurance, Lisa Orme, Capgemini; Raphael Vullierme, Luko and Ali Hasan, Vitality in ‘The Insurtech Magazine’
Technology that predicts and helps protect policyholders against a range of threats is shifting the image of insurers
The overwhelming majority of us have for too long accepted that the only contact we will have with our insurers is at the point of renewal or claim. But a growing band of nimble and progressive companies are pushing hard to turn those traditional industry values on their head by proactively working with their customers to both reduce risks in an ever-more complicated world and, vitally, build satisfaction, happiness and loyalty.
One such player at the vanguard of the preventative insurance revolution is Paris-based Moonshot Insurance, an insurance-as-a-service platform spun out in 2017 by industry giant Société Générale Assurances.
Using data as the cornerstone of its operations, Moonshot Insurance started by offering parametric-driven cover for the travel industry, automatically triggering claims for policyholders without them having to prove loss or, indeed, even notify the insurer.
“We can detect that the flight is late in real time. We can detect that you missed your connection. We can detect that you have lost your bag, which you have registered at the airline desk. All this helps us to bring a new customer experience,” says co-founder and CMO Nicolas Serceau. “I’ll give an example: You are waiting for your flight at the airport and the flight is late. We will straight away send you a voucher to grant you access to an airport lounge so that you can rest and wait for the exact departure time of your flight.”
With reducing risks and improving customer experience still its ethos, Moonshot Insurance is moving into new markets, including a soon-to-be introduced groundbreaking cyberbullying policy in partnership with mobile app Bodyguard to help parents protect their children. The Bodyguard app uses natural language processing (NLP) algorithms to detect and analyse the contents of messages on most commonly used social media platforms to block inappropriate content in real time and alert parents to the situation. It will first be offered in France, Germany, Italy and Spain but Moonshot is already assessing a move into the UK market, despite added complexities caused by Brexit.
“Cyber insurance is moving a step forward by helping to prevent the risk from occurring with this early detection,” says Serceau. “We include FAQs or best practices on how to use social networks as well, and how to manage bullying.” And if the app isn’t able to prevent the risk from occurring, then the insurer will take on the cost of any psychological impact on the child. The company is also using preventative insurance to protect against identity theft.
“We have a preventive solution that will detect your personal data on the dark web, for example, your credit card number. If it’s detected on the dark web, then we will send you an alert,” Serceau says. “To me, that’s the great benefit of parametric insurance and preventive insurance. It brings benefits to the insurer because it will reduce its risk. It brings benefits to the client because it brings great experience.
“For the first time in the insurance industry, the customer will be paying for something that will be concrete, that will give them alerts on a daily basis. Before, the customer was paying for nothing to occur and the benefits were only in a few percentages of cases. That’s the root of the bad image insurance has from a client perspective.
“With preventive insurance, you have the capacity to demonstrate – not just tell your clients – that you are by their side every day, at every moment, protecting them – protecting them when the big things happen but protecting them by preventing the risk from occurring in the first place.
“So, for me, that’s the potential: insurance image with clients improves, then, potentially, the business of insurance increases and the premium also goes down because there is less risk with prevention.”
Serceau’s viewpoint is widely shared by others heavily involved in the preventative insurance market. Health insurers like Vitality, for example, are perhaps the most experienced in working alongside their customers to help improve their lives and, thereby, reduce risks and claims. But Ali Hasan, Vitality’s UK chief medical and healthcare officer, is convinced that a paradigm shift is occurring beyond that.
“You’ll see health insurance, life insurance, property insurers, every group being a lot more mission-focused, thinking about the impact they can have for people,” says Hasan. “The reduction of claims that you have is a positive benefit, but all the value-added services that you can have – improving health, reducing accidents, reducing problems – are actually the really positive outcome that insurers can bring alongside avoiding the claim.”
Raphael Vullierme, co-founder of Luko, which uses deep learning and smart energy technology to protect some 300,000 households across Germany, France and Spain, has proof positive of the benefits of that stronger customer engagement. Early analysis of the 30 per cent of Luko’s customers who use its premium Telemetry for Homes product shows that the company retains them three times longer and the loss ratio is up to 20 per cent lower.
“We definitely see that there is appetite from the consumer to have something more than just a boring legal contract and to actually create a relationship to protect their assets and that is definitely evident in the more digital audience,” notes Vullierme.
A similar picture is painted by Guy Farley, founder of Many Pets (formerly Bought By Many insurance which is being rebranded in the UK).
“A concrete example for us is that we’ve launched a wellness product in the US, which is sort of more analogous to a savings plan to do your regular treatments with the vet and that’s way outselling the targets we had for that when we set it up, so we’ll be bringing that product back to the UK,” says Farley.
“Pet owners are prepared to undertake the preventative stuff and if we can incentivise that, then that’s obviously great for us as well.”
A general appetite among consumers for preventative insurance is also underscored by the findings of a new survey by global IT services consultancy Capgemini. In a poll of 5,000 respondents across 16 countries, almost seven in 10 said they would be interested in preventive solutions and 53 per cent of those said they would be prepared to pay a premium for them. Hasan is convinced the industry should quickly build on that potential to the benefit of the insured and insurers alike.
“I tend to think about the value of that preventative support, about shared value, about engagement and what it brings to customers, on four different axes,” he explains. “Firstly, ultimately, is the customer impact; how their health, how their outcomes, how their day-to-day life is improved, whatever line of insurance you’re supporting.”The second one is in terms of brand; how you understandd how you’re known, how your purpose is really communicated and how you inspire a wider ecosystem.
“The third one is customer retention, because, I think, the more they engage, the happier they’re likely to be, the more benefit they’re seeing from the product and the more they retain.
“And, finally, I think all of those positive benefits across those three domains would translate into increased attraction of the market and sustainable growth, too.”
Lisa Orme, a senior director in the insurance team at Capgemini, however, cautions that insurers have no time for complacency in an industry where digitisation and the use of granular data to better know customers and their needs is fast becoming a ‘must have’.
“If insurers are not nimble enough and they don’t use this time now, I think they should be looking over their shoulders because I think big tech are not too far behind,” she says.
Looking to the future, Nicolas Serceau at Moonshot Insurance is convinced there is a vast and largely untapped potential for preventative insurance linked to weather-related events in particular, ranging from agriculture to tourism, using data photo analysis taken from satellites and real-time monitoring of water temperatures, for example.
“There are billions and billions of assets to be insured,” he says.