The New Economy is redefining insurance

The digital revolution has created a new economy and it goes by many names. Call it the gig economy, sharing economy, collaborative economy, or on-demand economy.

May 17, 2017

With the tech startup world booming, there are apps for everything from delivering food and groceries, finding an apartment to stay in for a getaway, getting someone to help with tasks, and renting a car or getting a ride. The digital revolution has created a new economy and it goes by many names. Call it the gig economy, sharing economy, collaborative economy, or on-demand economy.

Technological advancements have driven this boom and millennials are pushing it. The first generation of digital users are coming of age and they’re shaping this new economy. They’re choosing to replace the ease of access over ownership, flexibility over stability, and community or experience is valued more than consumption. According to PwC, there are five sectors to this economy: collaborative finance, peer-to-peer accommodation, peer-to-peer transportation, on-demand household services, and on-demand professional services.

Some examples of these faces are Uber, Lyft, Airbnb, Venmo, Lending Club, TaskRabbit, Postmates, and Sittercity. With the rise of this economy, they’re shaking up entire industries. Insurance is one of them. The new economy is forcing insurers to rethink how they structure, underwrite, price, and distribute their products. They also force companies and their technology partners to be innovative and agile around product development and keeping up to capture the market opportunities and changes.

During the development of this disruption, insurers initially resolved the problem with gap coverage but that wasn’t fully addressing the problem. Solving the problem meant working with it, embracing it, and getting creative.

Startups like Trove, Lemonade, and Metromile are taking the insuretech world by storm with innovative technologies designed to fit the new economy and demographics. These new companies offer on-demand insurance, bought and bound with a swipe of a finger. The apps are sleek, smooth, fast, and beautifully designed. The whole trend about on-demand insurance means you can start and stop your insurance policy instantly. Technology enables flexibility in this sharing economy.

For insurers, you need to make sure you’re plugged in with the right products to support the growth of this new segment in the industry while supporting your own current growth. Shared mobility is presenting the opportunity to rethink how they operate along.

Luckily, DRC’s technology is flexible and configurable enough to meet the demanding needs of existing carriers and startups looking to enter the insurance industry. Whether your business is personal, commercial, or specialty, DRC’s policy administration solution and rating engine may be a good fit for your business needs. If you’re an MGA, carrier, or broker looking to get a line of business up and running quickly, you can turn to us.

For more information about DRC’s people, products and services please visit DecisionResearch.com.

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