Insurance is a huge, sophisticated industry with of some of the largest companies on the planet. Learn about why technology is crucial to success in insurance.
Insurance is a huge, sophisticated industry with of some of the largest companies on the planet. Moreover, it is a relatively sophisticated industry. After all, the leading insurance companies must be able to analyze huge amounts of data to make insurance pricing decisions and invent new insurance products.
Insurance is behind in tech
Despite all of this, it is still fair to say that the insurance industry is way behind from a technology-perspective. Take one look at the websites for some of the largest insurance companies and you quickly sense that technology (and design) aren’t the highest priorities. It isn’t just a cosmetic problem. Most insurance companies have antiquated technology infrastructures and are surprisingly paper-based. One large insurance company we are familiar with (that prides itself on being easy to work with) has an agent system that is only compatible with Internet Explorer.
This is not entirely the fault of the industry. Agents, who are themselves typically on the older side, dominate insurance sales. As a result, there was little advantage to be had by investing billions of dollars in cutting edge productivity tools and consumer facing applications. A knock-on effect of this lack of investment was the resultant silo-ed technology systems and databases that are ever more difficult to work with. This is one reason why it was so difficult to launch healthcare.gov that “simple website”.
A Retiring Workforce
So why is it changing now? For one thing, the industry’s workhorse, the agent sales force, is on the verge of retiring en masse without a suitable number of young agents ready to replace them. This retirement wave will require insurance carriers to finally confront the problem of direct distribution how to build the technology that is necessary to solve that problem. Moreover, companies that have already embraced this change – see Geico and Progressive – have grown their market share over the recent decades, showing the value of investing in technology.
All of this has led to the rise of the “insurtech” movement, with disruptors popping up daily to challenge the historic dominance of legacy firms. At Bungalow, we believe the movement towards the “consumerization” of the insurance industry will continue and that is why we partnered with Deckspire to build a website that uses the latest technology standards and design principles. We believe this will differentiate Bungalow and our insurance partners in the minds of the consumers. All we have to do now is come up with some witty SuperBowl commercials :).
Tom Austin is a co-founder of Bungalow Insurance, a startup that is improving the way people buy insurance online. Check the company out to learn how the company is improving the online renters insurance purchasing experience.