There is this great scene in the movie “The Godfather,” in which Tom Hagen asks Michael Corleone “You know how they’re going to come at you?” regarding some unpleasantness with the heads of the other crime families.
Michael, being Michael, is ready for what they have planned.
The war currently heating up between InsurTech startups and legacy carriers and brokers may include the occasional betrayal, but it is unlikely to include any assassinations. To know how the war is being fought by InsurTech startups, all you have to do is key “Lemonade” into your search engine. The battle plan is so easy to see, it’s as if these startups are assembling their weapons, mustering their troops and planning their strategies in clear view.
The Google search engine returns the following when I key in “Lemonade”:
“Killer prices. 3 minutes to get paid. No commitment. Instant everything. 90 seconds to get insured. No brokers, No fees.”
Let’s start with “No commitment.” These two words could just as easily serve as a promotion for Tinder, Hinge or any of the other dating apps popular with millennials. While there certainly are those millennials searching for committed relationships, many are committed only to not committing. Millennials’ casual regard for home ownership, automobile ownership and ownership in general also represents their reluctance to commit.
Let’s continue with “3 minutes to get paid. Instant everything. 90 seconds to get insured.” Millennials, along with generations that touched down on this planet before and after them, increasingly want whatever it is now. We want the merchandise we order delivered now. We want the movies we watch and the music we listen to delivered now. We want the food we eat served up now. We want whatever is wrong fixed now.
These two words returned by the Google search engine should be particularly worrisome for legacy brokers: “No brokers.” While I am no social scientist, I am naming the current epoch “The Age of Distrust.” It appears we are hard-pressed to trust newspapers, broadcast media, online media, politicians, priests and even fellow citizens residing in other parts of the country. This is not the time or place for middlemen. Rather than valuing brokers’ expertise and commitment to service, insurance buyers today are just as likely to resent their intrusion in the process.
We now come to the last chestnut, “Killer prices. No fees.” Except for affluent consumers who derive emotional satisfaction from paying more than is necessary—I am here thinking of shoppers at Whole Foods, Starbucks, Anthropologie and similar higher price retailers—killer prices and no fees are sure to win favor among insureds.
When I continue reading down the page delivered by the Google search engine, I see that Lemonade “offers renters and home insurance powered by tech and driven by social good.” Lemonade also promises “zero paper work.”
Millennials, along with all the generations to follow them, are as comfortable with tech as previous generations had been with saws, screwdrivers and hammers. (I wonder what percentage of millennials owns a saw, screwdriver or hammer.) These insureds and potential insureds also line up behind social good, big time—in word if not also in action. While no one ever enjoyed filling out forms, I believe it is safe to say those who have grown up transacting their lives online enjoy it less.
Lemonade, on its website, offers to “protect the stuff you love.” Let’s compare this with competitive offers.
- Willis Towers Watson offers to “turn risk into a path for growth.”
I will need to devote a little more time to follow this logic.
- GEICO, on its website, informs insureds it is “More than just car insurance.”
While this is helpful information, it doesn’t move me.
- A State Farm agent’s Facebook page describes service that is “Fast, friendly & local.”
While I am in favor of fast, friendly and local, I can’t fall in love with it. (Editor’s Note: Auto-Owners and independent agents selling Auto-Owners policies also describe their service with this phrase.)
- Prudential “has been meeting challenges for more than 140 years.”
I am in awe but not in love.
Let me quickly add, there is nothing wrong with these solid copywriting efforts of legacy carriers and brokers. It is just that they are out of step with the thought processes and sensibilities of rising insureds.
Let’s return to the question Tom Hagen directed to Michael Corleone: “You know how they’re going to come at you?” It is quite possible InsurTech startups will prove to be a flash in the pan, all bark and no bite, sound and fury alone. It is equally possible they have done a good job of understanding rising insureds and have put together a proposal that satisfies their wants, needs, desires and aspirations. Whichever scenario we choose, InsurTech startups have been forthcoming regarding their intentions, strategies and tactics.
At the very least, legacy companies can cherry-pick that which is working for InsurTech startups and incorporate it into their own positioning platforms. This is called a gift. More than this, legacy carriers can determine how to meaningfully engage with these startups to build a bigger, brighter future for all parties, including insureds.