The recent rise of on-demand insurance in the last two years has been revolutionary within the insurance industry by creating a better experience for clients than ever before. On-demand insurance allows consumers to purchase coverage whenever and however they want with full flexibility in pricing, coverage, and term lengths. This has become popular in conjunction with the rise of services like Airbnb and Uber that encourage people to seek non-traditional insurance coverage with more specific functions.
The Boston Consulting Group reveals that the three most important aspects of customer satisfaction in insurance are transparency, quality, and speed. With 95% of the insurance application process taken up by waiting, consumers now demand a turnaround decision within hours instead of days. Especially when it comes to short-term coverage, such as a family seeking extra insurance while they’re out of town on vacation. Another popular feature of on-demand insurance is that consumers can pay for insurance coverage for only the time that the asset is at risk, such as by-the-mile car insurance. Usage based insurance has been around in some form for years, but on-demand insurance only represents less than 1% of the global insurance market. Now, 93% of millennials in the United States say they are willing to purchase usage-based insurance policies as long as the prices stay the same.
Let’s take a closer look at three of the leading on-demand insurers:
Founded in New York in 2015, Slice started as a cloud-based insurance service for home sharing hosts who are at risk of vandalism, theft, excess utility usage, or insect infestations. This allows the host to pay for insurance that is equivalent to the length of the guest’s stay. Slice has expanded to offering rideshare coverage as well as insuring people with task-based jobs, such as house cleaners and dog walkers. Using algorithms and data, this company has lowered the cost of issuing policies, increased automation around claims, and reduced claim fraud and loss. Slice proclaims to be changing insurance by making it people focused, allowing consumers to buy coverage only when needed, making insurance affordable, and “making it super easy to get coverage (if you’re a fast typer, you can be up and running in 2 minutes or less. Not so fast… maybe 3 to 5 minutes).”
UK based startup founded in 2016, Wrisk brands itself as “insurance for the connected generation.” This company has built an insurance app that allows consumers to add assets under the categories “stuff,” home, ride, and travels as well as adjust their coverage on an as needed basis. Wrisk has implemented a Wrisk Score that provides details on what is affecting your premium much like a credit score. This added transparency along with flexibility literally at the touch of a button makes Wrisk a fully customizable one-stop shop for insurance coverage. Recently at the 2018 DIA Amsterdam event for digital insurance, Wrisk won the DIAmond Award for insurtechs that have the most strategic impact. They are continuing to grow and push forward with more advancements in the industry soon to come.
Another startup founded in New York in 2016, Verifly began as an on-demand insurance policy specifically for drone operators. This coverage extended to drones weighing 15 lbs. or less with liability protecting the consumer from accidents that may arise while operating the drone. The company is beginning to expand its services to a wide variety of part-time or contract work in the growing on-demand market. Now, general liability insurance is offered for activities including construction, home and garden, professional services, events and entertainment, and pets. Per-hour prices decrease with longer or extended policies, but the plans are highly flexible and change depending on the type of work being covered. The app connects consumers with policies from partners like Markel and Global Aerospace for coverage available in all 50 states of the U.S.