New entrants in the insurance space … So?

I agree that there will be new entrants in the US insurance space but as I have written before, what parts of the insurance space? Will the new entrants play in the aggregator or price comparison web sites, become licensed agents, provide customer service, carry the risk, or ?

Just a few thoughts by listening in to the war room sessions of non-insurers deciding to come into the insurance space…

PCW

If a new entrant decides to provide price comparisons, that seems a fairly harmless way to say they participate in the insurance industry. Customers will increasingly want more information about rates for their potential insurance purchase. And it’s certainly a function that could, and should, emerge as a mobile app.

Licensed Agents

You mean we have to be licensed for each and every line of insurance we want to sell … and in every jurisdiction we want to sell insurance … and we have to maintain our training to continue to be legally licensed ?! Well, it certainly seems worth it because there are millions of dollars to be had so let’s get it done.

Provide Customer Service

Hell, “service” is our middle name … we provide pages and pages of FAQ for customers to find the answers to their questions.

What ? We have to provide actual humans at times of claim (whether P&C or L&A)? Won’t natural language-driven speech algorithms do the trick? Where is Max Headroom or the Turning Machine when you really need it?

And providing service turns out not just to be answering questions even on a self-service basis. Why? Because there are times that an automobile insurance client changes his or her address and that triggers a recalculation of the premium. We can do that …

Carry the Risk

Perhaps we should our strategy up a notch ad not just be a PCW web site provider or an intermediary.

Perhaps we should completely jump into the pool and learn the legal ramifications of any of the policies we sell (because an insurance policy is essentially a legal contract with terms, conditions, and restrictions) and also learn the financial realities (and compliance realities) of the financial risk of every policy we sell.

(Selling an insurance policy is simultaneously purchasing a loss unless the client or the insurer terminates the policy before a loss event that the legal contract – aka insurance policy – covers.)

Or …

No, we’ll stick with being a PCW or possibly an intermediary. We realize that every person who sells an insurance policy, even if they are sitting behind a phone, using a computer, a mobile device, or using any one of more posit;e communication channels must also be a licensed agent for that line of business for that specific jurisdiction.)

We’ll partner with some insurers and let them take on the financial risk and also offer customer service. And we swear we won’t minor-manage them by thinking that the profits and losses of our non-insurance business can be used to guide the profits and losses of any insurance business.

And if the time comes when our insurance company partners don’t offer the service that clients expect or don’t renew the clients’ policies due to adverse claim experience … well, there are more fish in thawed to keep clicking on our PCWs or provide sufficient revenue for us to pay our agents (if we decide to go that route).

Aren’t there?

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