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microinsurance trend about to catch fire

You’ve heard about microinsurance.

But is the microinsurance trend going to catch fire?

Drew Aldrich’s article on CBInsights, “Going Micro is the Next Big Thing for Insurance Tech”, breaks down how it works and shares a few tactics from the successful startups who helped bring microinsurance to the forefront of the industry.

But we’re still not sure how we feel about it. On the one hand, it mainstreams insurance for the modern consumer (and it nails the marketing side of things). On the other, microinsurance does not seem to address how important the customer experience is to this business.

CBInsights is a great looking glass into the world of insurance tech, and this article definitely shines the light on where and how our industry is evolving.

Microinsurance appears to be the future, but we want to make sure the focus stays on our customers.

If you give too much ownership to clients who don’t know what to do with it, or rely too much on the quick and easy appeal of the Internet, how can you be expected to deliver when things get really hard for your clients?

What these tech startups and microinsurers fail to understand is that selling insurance and being an insurance provider are two different things.

“Their focus is on the technology and the marketing and not on the insurance. I feel like insurance is such a crucial part of how our entire world works…and we have to have respect for the people and the regulations that make this industry move.” Ryan Hanley

Take, for example, the microinsurance agencies discussed in “Guidewire Software Joins Rise of Strategic Investors in Insurance Tech” also on CBInsights.

Guidewire recently acquired Trov, an app that allows you to insure only the things you need to, and will no doubt mainstream the application soon. Not only will consumers be able to purchase single-item insurance, they’ll be able to keep track of their payments and policies from one easy-to-use app.

But what happens when a house starts on fire in the middle of the night? What kind of direct customer service can you get from an app?

Beyond that, what about you other possessions, the ones that aren’t insured? Do you just shrug them off? Microinsurance like this leaves too much at risk. You have to ask yourself the right questions, or the real consequences of loss will break more than the bank.

“You think, am I actually paying more even though I think I’m paying less because I’m only buying little chunks at a time? Am I ever doing the cost analysis to see if I could buy a renter’s policy?” Marty Agather

Our consumers need to recognize the bigger picture before they start to consider microinsurance.

The concept is a game changer, and while we think it’s an ill-considered choice, we do want to recognize that it is successfully attracting customers.

Microinsurance offers extremely competitive pricing with modern communication, which plays directly into the psychology of today’s consumer.

What we need to do as agents is tap into this same psychology.

We need to get a better grasp on what our consumers actually need from their insurance providers. There’s a disconnect right now in this industry, and it’s going to be our job to rebuild and maintain that connection.

Think as far forward as you can with this microinsurance idea. Consider the articles we discuss in today’s episode as the start of a conversation that’s just going to keep going. We want to know what the future of insurance looks like, so tune in and let us know!

SEE ALSO: 2 Things You Must Do to Succeed as an Insurance Business – ANR23

Podcast Topics

  • How digital disruptors are changing the scene for insurance agents
  • What is Microinsurance and what it means for the insured millennial
  • Considering the psychology of your consumer and their customer service experience
  • What could happen when consumers make the wrong insurance choices?
  • How to understand your modern clients and market appropriately
  • The marketing strategies we are using with Facebook and social media

And don’t forget to subscribe to us on iTunes and leave us a stellar review!

Thank you,

Ryan Hanley

P.S. Don’t forget to learn more about Agency Nation University.

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