November 19, 2019 by Greg Meckbach
As an increasing number of your clients come from cohorts younger than Generation X, the availability of non-traditional insurance products is going to increase, an insurtech industry watcher suggests.
“I think we are increasingly going to see the development of some new innovative products – whether you call them on demand or you call them micro insurance – it will be products that fit [clients’] specific needs at a point in time,” said Denise Garth, senior vice president of strategic marketing industry relations and innovation at software provider Majesco, in a recent interview.
“Four or five years ago the predominant buyers were still [baby boomers] and Gen X,” said Garth, referring to people born between 1946 and the early 80s.
“Increasingly Millennial and Gen Z are becoming the buyers,” added Garth, referring to people born after 1981. She was commenting on major technology trends she foresees in 2020.
There is going to be more focus from some innovators on the coverage needs of clients for a specific point of time – rather than “one-size-fits-all” insurance policies, said Garth.
She cited Duuo – through which The Co-operators covers homeowners who rent out their places like hotels – as one example. Slice Labs is the technology provider for Duuo, which The Co-operators launched in response to coverage gaps in traditional homeowner policies for people providing accommodation on services such as Airbnb.
Clients will want “on demand” insurance for both P&C and life and health, Garth says. For example, someone might want a higher level of life coverage for a skydiving trip.
“You are having a wedding and you want to have event-based insurance to cover what could happen at that wedding. The possibilities are pretty endless,” said Garth.
“Insurers getting smarter at saying ‘one size does not fit all,’ so they begin to develop products that are very specific for a niche or a market segment and then they kind of wrap a whole different kind of digital experience around that to go after [clients] in a very digital way,” said Garth.
“Traditionally over the years, every industry kind of had their boundaries. The music industry, the book industry, the automotive industry et cetera, and those silos and barriers are crumbling faster each day, so I think we are just going to begin to see this continue to grow.”
As an example. Garth cited Tesla, which started selling insurance for its own cars in California this past August.
“I think we are going to see further experimentation and a further crumbling of those silos by embedding the purchase of insurance into other things because that’s how people live,” said Garth.