With the advent of apps that streamline our lives — from Seamless for food delivery to Uber for ridesharing — instant gratification has become the norm for service-based industries, especially among tech-savvy millennial consumers.
Even the insurance industry is not immune to this trend; Sure and Lemonade, two tech startups providing on-demand insurance services, have recently sprung up as alternatives to the traditional in-person insurance model.
Two Startups, One Aim
Sure announced its service in May, classifying it as “the world’s first on-demand insurance app powered by artificial intelligence.” Its data-driven approach is meant to facilitate a higher degree of personalization by identifying a user’s needs and providing products for on-demand purchase.
Meanwhile, Lemonade — backed by Berkshire Hathaway and Lloyd’s of London — is a peer-to-peer (P2P) online property and casualty insurance company which promises to “reinvent the insurance industry business model and make insurance a ‘delightful’ experience for consumers,” according to Insurance Journal.
Its founders hope to use P2P technologies to capitalize upon the emergent “shareconomy,” providing a seamless experience that bypasses bureaucracy.
Both of these services target millennials — who “sit high on the technology adoption curve” but lack a true understanding of insurance offerings in comparison with other generations — making them a prime, largely untapped market.
What this Means for Insurance Agents
As you might’ve assumed, millennials are the most “plugged in” generation, and are typically early adopters of new apps and online services.
The recent emergence of on-demand insurance services like Sure and Lemonade reflects this trend: increasingly, consumers are taking control of their path to purchase, going online to learn about different types of coverage, price points, and how to get the best possible deal — importantly, much of this initial research is being done independently of agents.
However, when it comes to actually purchasing new policies, “63% of consumers prefer to speak to an agent on the phone or in person...even after using the web to conduct their preliminary research and compare their options,” according to a recent study from the Local Search Association.
So, what does this actually mean? While consumer preferences and habits are most certainly changing, agents still play a vital role in the purchasing process.
That said, insurers need to meet their clients halfway; as insurance shoppers expect more control and personalized experiences, agents must embrace new technologies and digital marketing tactics — platforms like mobile apps, social media, and optimized websites are becoming a baseline requirement for agents and agencies looking to remain relevant and competitive in the digital age.
While some may view the advent of on-demand insurance as the beginning of the end, others view it as an opportunity. Indeed, savvy agents can capitalize upon these trends and leverage them as a competitive advantage — they just need to make sure they have the proper tools at their disposal.