Some insurers are looking for brokers who can help them use big data to customize products for small businesses, an insurtech founder suggests.
“Big data is a loose term,” Mark Morissette, founder and CEO of Foxquilt said Tuesday in an interview. Specifically, he said insurers want to know of insurtechs: “How are you finding that data that creates a very rich user experience, that alleviates the pain of getting a quote, and that [gives the consumer] good service when you are purchasing insurance?”
Foxquilt is a RIBO-licensed brokerage that places home, auto and small business insurance in Ontario. Morissette – a former underwriter at Aviva Canada – describes Foxquilt as an insurtech.
Carriers view themselves as very good at manufacturing products, Morisette said, but they also need the help of insurtechs. Their pitch? “We really need to partner with sophisticated technology groups who can innovate with us, build platforms and ingest data, and build products with that data,” Morissette said.
How can data analysis help? Morissette gives the hypothetical example of a three-person stone mason crew whose commercial insurance package includes coverage for advertising liability. It might turn out through data analysis that the company finds customers through referrals instead of through advertising – and therefore has no advertising liability risk.
Another way is to link insurers with “unique communities” to place insurance.
In a Leger survey commissioned by Foxquilt, 59% of respondents said they would join an online community to increase their buying power and coverage while decreasing their costs if they had the opportunity to do so. Leger polled more than 1,000 Ontarians online in October. The results are considered accurate within 3.1 percentage points, 19 times out of 20. Foxquilt released those survey results Tuesday.
Insurers have been catering to “affinity” groups for years, including alumni from certain universities, professional associations or union members. But the “traditional group affinity business is outdated and archaic,” Morissette observed Tuesday. He cites as an example an architectural firm in which only 20% of the staff are licenced architects. “You can’t get benefits to the other 80% who happen to be designers or coders and not professional architects.”
One example of a “community” could be fitness enthusiasts. Using big data, a broker could find for example that a group of runners is also an affluent group of homeowners who constitute a better risk for carriers. In this example, the carriers could create products for that particular community.
A broker could also, for example, target its marketing towards a social media group of stone masons.
Once a company decides to buy insurance, Foxquilt aims to place a product that is customized for that type of company, Morissette said. “We don’t have a human being looking at five different markets.”
Instead of someone going through all the paperwork and figuring out where they should seek quotes, the broker might be speaking to the person and advising them on their coverage needs. “The shift in human capacity is becoming much richer service experience – letting the technology do all the different dirty, exhausting, painful paperwork and underwriting and attaching to the right policy.”