Consumer Finance

With The Aid Of Technology, Teaching The Insurance Industry To ‘Speak Millennial’

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In the movement from analog to digital, money matters the type of money that fuels technology, that underpins new products and projects, as paper and manual processes give way to bits and bytes.

In one latest example, beyond U.S. shores, Coya  a startup based in Germany that has trained its sights on the insurance industry  raised $30 million, slated to bring that vertical into the digital age in Germany.

One early target audience lies with millennials. The $30 million announced this month, which brings cumulative funding to $40 million, will help the firm finalize the licensing process tied to the German Federal Licensing Supervisory Authority and come to market with its first product later in 2018.

Andrew Shaw, founder of Coya, told PYMNTS via email that inefficiencies exist with insurance done through traditional means.

“With all the baffling terms and conditions, endless paperwork and impersonal treatment, people end up worrying about the handling of their plan and contract which defies the whole purpose of insurance,” he said.

Coya, he told PYMNTS, wants to digitize the process. The opportunity that lies in front of the company comes, Shaw said, as “the current insurance system does not speak ‘millennial,’” noting that these consumers “seek clarity at the optimum level of convenience.” He stated that with Coya’s own creation of a “techsurance” ecosystem, individuality can be assured.

In reference to a roadmap, Coya said that upon the granting of the license by the German supervisor, insurance carriers will be able to passport their license to other European states while reporting to a single supervisor. That’s a different business model than the one seen in the United States, where carriers are licensed on a state-by-state basis.

When asked about the near and longer-term regulatory concerns that extend beyond the licensing process, the executive stated that other key items include the Insurance Distribution Directive and GDPR, noting that “data privacy should always be front of mind,” and that the firm already has a head of compliance in place.

Out of the gate, as Shaw illustrated to PYMNTS, the renter’s insurance product is one that will allow customers to purchase a policy in under three minutes, with what he said would be “almost instant” claims servicing.  There is also no lock-in and the middleman, which represents as much as 20 percent to 30 percent of a premium on a lifetime basis, is eliminated. Distribution will be done directly online, and Shaw said will offer a REST API (B2B2C) that will allow partners to integrate the insurance product into their ecosystems.

The executive said, “AI can basically be utilized in every step of the value chain product development and optimization, marketing and campaign management, customer and risk assessment, claims management and customer service.”

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