“There’s a fine line between gimmicky and convenient. As consumers continue to flock to on-demand/sharing economy platforms, the need for insurance products that can adapt quickly will increase.
Distribution of these products is the X factor. The modern consumer tries to think about insurance as little as possible. Nobody thinks, ‘Hey, I should research a one-day renters’ policy after I book this Airbnb,’ but they might buy coverage as they check out on Airbnb. Direct-to-consumer approaches will have a hard time scaling. Insurance is an add-on feature of the on-demand economy, not the product, and it should be sold as such.”
“My opinion on on-demand insurance is biased since one of our Wefox Group insurtech portfolio companies, ONE Insurance, is currently expanding using this strategy: geo-triggered data gathered from mobile phone GPS, which allows customers to draw short-term conclusions about insurance modules in their lives.
While this may sound far-fetched to some in the insurance industry, I strongly believe that all insurance providers must provide on-demand insurance solutions to gain a competitive edge and even just survive. Thus, the main challenge facing the insurance provider is to assess the risk in order to provide on-demand insurance.”
“Today’s insurance policies are based on traditional definitions of a business. However, two major forces are changing these traditional notions dramatically. First, the growth of the gig economy – forecasts show that 50% of workers will be in the gig economy by 2020 and 80% by 2025. Second, fewer people own assets; rather, they rent them as needed.
The demand for this is inevitable: Once significant portions of the economy don’t fit into traditional risk models, insurers will have no choice but to adapt. The biggest question is whether the insurers can accurately and profitably price on-demand insurance.”