Read the latest article from our keynote speaker on future industry trends.
GenFlux and The Need For Adaptive, Creative Insurance and Auto Solutions
On a cold, rainy Berlin morning, an entrepreneur named Tim Kunde sat down over coffee to reveal his plan to disrupt the insurance industry. Surprisingly, Tim’s business model emphasizes relationships, social virtue, and accountability to build Friendsurance, which is based on buyers as groups that use friendship and peer pressure to reduce fraud.
The product of a classical business school education, Kunde’s breakthrough idea involved harnessing the power of friendship to save people money and make their lives less susceptible to losses. “People pay the same insurance premiums at the start of the year and then we give them a payback at the end of the year,” he explained. The refunds, which can total as much as fifty percent, are based on the number of claims against the insurance made by your network of friends.
This type of creativity points to a moment to remake the industry due, in large part, to Generational Flux, or ‘Gen Flux’—a massive group of tech trackers, crowdfunders, and co-sharers who are psychographically aligning with the ‘gig’ economy. The recession led to a distrust and aversion to single company loyalty, while at the same time technology and social networks urge us to think differently about work. So the new attitude is about ‘fluxing’ between opportunities and being propelled to live in the moment and act on current market opportunities for both work and home.
The data is compelling: By 2020, 40 percent of the American workforce is predicted to be freelancers, independent contractors, and ‘solopreneurs’, according to Intuit. Payscale reports the average tenure at Amazon, Google, and Apple was two years or less. We see this global trend among affluent urban dwellers from Amsterdam to Chiang Mai. People are pioneering new living structures for seamless co-living and nomadic globe trotting. WeWork, a $16 billion company just launched a co-living venture WeLive in New York and Washington DC, while in China, You+ offers similar co-living properties for young working professionals.
Perhaps the most GenFlux friendly new work/live start-up is Roam, where digital nomads sign a single lease to live anywhere in the world, from Ubud to Madrid. Apartments are fluid and flexible, placing experiences over ownership. To Gen Flux, ownership is an anchor, while subscription models are seen as balloons. In fact, 43 percent of U.S. adults agree owning feels like a burden while 57 percent agree that ‘access’ is the new ownership, according to a survey we recently fielded with PwC.
And this trend extends to automobiles. GM predicts that 30 million people will be using car sharing services in the next decade, so they launched Maven, that shares vehicles for just $6/hour. Not to be outdone, Audi Unite is a car sharing program with an app that tracks a car’s location and usage for up to five friends. (Insurance, gas and mileage are all applied evenly by usage.) And Ford Credit Link lets “self-organized groups” of three to six people group-lease Ford cars, anchoring the initiative is an app through which lease group members can reserve drive time, coordinate vehicle access, handle maintenance, view their account, and make payments.
Disruption of this sort also extends to the home, where now you can borrow basically anything, from a lawnmower to picnic table, through Peerby, an online service that helps to connect people who want to lend or borrow various household items. Makes sense, as Rachel Botsan’s book on the sharing economy points out that the average power drill is used between six and twenty minutes in its entire lifetime.
And if insurance settlement sounds predictable, it too is subject to innovation––just consider crowdsourced settlements: Crowdjury in Argentina a new form of dispute-resolution based on the blockchain technology that allows crowds to settle legal disputes that previously were only decided by one person. There’s even AI bot lawyers like Donotpay that successfully appealed 160,000 parking tickets.
The lesson here is that insurance is anything but predictable or bland. The industry has an opportunity to become an agile partner of people wanting to move fluidly throughout life, work, and play. Insurance could be a lifestyle brand. It just takes a little imagination.
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