When the rate of adoption of new technologies within the insurance sector is evaluated, a key consideration is whether the industry is ready to embrace the level of digital innovation available. In an interview with Insurance Business, the founder and CEO of the recently launched insurance challenger brand Hiro (part of Hero Labs), Krystian Zajac (pictured), outlined how, within the finance industry, new challengers have already completely changed customers’ expectations of what banking looks like and how this will translate to the insurance sector.
“This doesn’t just require embracing technology,” he said, “but also changing the entire mindset and foundations of the industry and some companies will be open to embracing that change, while some will not.”
Zajac noted that the development of telemetry-driven pricing models in the car insurance space is finally starting to move across to home insurance. There are many exciting innovations right now that will impact the home insurance sector, he said, and he believes that the insurance industry is at a real pivot point.
With the increasing penetration of smart home devices, this will likely only accelerate, he said, highlighting that smart home tech ownership has exploded in the last few years, and how three out of every five households now own at least one smart home device.
“Many of these devices, such as video doorbells or leak detectors, are making people’s homes safer, but these homeowners are getting nothing in return from incumbent insurers,” he said.
The vision that Zajac is looking to realise with Hiro is one that will allow customers to utilise smart technology in a way that can prevent unfortunate occurrences from happening while simultaneously rewarding customers with discounts on their insurance premiums.
As an insurance challenger brand, Hiro is hoping to create meaningful change within the insurance sector and to the insurance business model, he said, and critical to this has been the business’s core understanding of the way that customers ought to be treated. Policies must be written for humans, not for lawyers, he said, and prices should not be arbitrarily hiked up when the time comes to renew.
“There are lots of ways technology and digital innovation could be used in the insurance industry, but until now we haven’t seen many taking full advantage,” Zajac said. “For example, simple home insurance claims are still being handled by people, which is time consuming for both insurers and customers waiting for claims. We believe it should be as easy as possible to claim, not stand in people’s way.”
Hiro is looking to reward its customers for utilising home safety solutions by offering a discount on their premium, he stated, with a saving of up to 25% available for customers using smart devices that they already own, as well as access to an in-app marketplace where every smart home tech item added will reduce their premium further. Having been involved in smart home tech for over a decade across a variety of ventures, Zajac remains passionately committed to finding new ways of using technology to help people solve real-life problems and about the role that a customer-orientated focus will play in the future of the insurance sector.
“We want to reward preventative behaviour – the more people do to protect their homes, the greater the rewards,” he said. “But to do this, we’ve had to fundamentally change the insurance business model and the way we assess risk, in order to pass on the benefits to our members. I believe we’ll see a shift towards this kind of home insurance in the coming years, but it will require a complete sea change from the industry.”
Brokers play a special role in highlighting the availability of such devices to their customers, he said, particularly when it comes to affluent consumers and high-net-worth products. Brokers have a vital role to play in guiding their clients when it comes to the latest technology and insurance products, Zajac said, and those that embrace this new opportunity will be able to reap the biggest rewards.
“When you consider that the vast majority of UK consumers already own smart home devices, and this number is growing rapidly, customers will be increasingly asking their home insurer why they aren’t seeing any reward for this behaviour,” he said. “We’ve already seen this shift start to happen in car insurance, where telematics technology has helped consumers personalise their policy to their needs – whether that’s paying per mile driven or rewards for safer driving. We believe the same needs to happen in the home insurance space.”