A lot has been written about the launch of Lemonade, the new insurer offering homeowners and renters in NYC insurance coverage starting from 5 USD. Some insurers and analysts were pessimistic, others were startled. Actually, the right reaction should be one of enthusiasm.
Yes, something interesting is happening, an industry, that is traditionally perceived as boring, over complicated and very distant from its customers, welcomed a new player – a company that positions itself as the complete opposite. Lemonade offers a fun, easy, relatable experience.
Why is this good news for traditional insurers?
If the whole P2P question is left aside (whether or not there is an actual P2P element in Lemonade or utilizing this hot word is primarily a marketing strategy is a separate topic), the key element to the new company would be its distribution channel. And it turns out that yes! it is possible to make customers feel comfortable by offering them insurance in a convenient, preferred and familiar context – a chat.
offering insurance in a convenient, preferred and familiar context – a chat
Everyone uses chat apps. It is an integral part of the current culture. So, insurers can learn from this, accept that customers expect a different experience than the time-consuming, paper-heavy, complex process they get at the moment and try to meet their needs by adopting new, additional distribution channels.
Established insurers have a huge advantage. They simply need one thing – technology
Established insurers should be excited about the developments, because they are ahead of the game. They have a vast existing portfolio, a customer base and often a national or international reach. The one thing that they still don’t have is a technology that enables them to offer an easy and relatable insurance process to their customers. A sophisticated system, that makes possible the launch of a 100% online insurance process through various interfaces – web, mobile and chat.
Established insurers that take advantage of this new technology not only do not need to fear newcomers, but can in fact be one step ahead of them.