Food taxis, even banking – consumers are demanding more and more services to be available anywhere, at anytime, thanks to the ubiquity of smartphones and mobile internet.
The rise of this on-the-go economy is a boon for tech firms looking to disrupt exciting sectors such as leisure, retail, and entertainment – areas which attract a large audience of young, tech-savvy consumers.
Other industries have been slower to change, such as insurance; perhaps because young people simply own less stuff, or have less disposable income to spend on insuring their goods, meaning the traditional players haven’t needed to adapt to their needs. But one company trying to disrupt an old industry is digital insurance platform Trov, which has been described as “insurance for the Tinder generation”.
The California-based company came to life around five years ago, and is the brainchild of serial entrepreneur Scott Walchek, who’s been creating startups for the past 30 years in Silicon Valley.
The idea came from thinking about how to capture the information on the things that people own. This inventory could then be used to provide proof to insurance agencies about what a customer claims to have lost.
“How would you prove it? This industry has been taking your money faithfully and gleefully every month in case of loss, then when you lose everything they say ‘can you prove what it was?’”
The idea evolved, and Walchek began to devise an insurance solution that would suit the modern emerging consumer, who can buy practically anything on-demand through their smartphone.
These consumers value flexibility, rather than being locked into long-term contracts. But the traditional insurance model doesn’t reflect this.
For example, a part-time photographer may have to buy insurance cover lasting a year or more for their camera, even if they only use it a few times a month.
This can be expensive and means many people or small businesses might opt not to have any insurance at all.
The Trov model offers something much more flexible. A user lists their valuable personal items (their “treasure trove” of goods, hence the app’s name), such as their bike or laptop on the app, along with their payment information.
This industry is taking your money every month, then when you lose everything they say ‘can you prove what it was?’
When the user wants to insure their item, they swipe right on the app (much like dating app Tinder), and make a payment for the remainder of the month. They can swipe left to uninsure the item, and are refunded for any unused time.
“We literally price and bill to the second, so you only pay for what you use,” adds Walchek.
While an item’s insured, the user can swipe right again to make a claim if their item is lost, stolen or damaged, and their claim is resolved by communicating with a chatbot.
In practice, this automated system means that someone can insure their belongings only when necessary, rather than paying for insurance even when their item is safely stored away.
The insurance sector has for some time been struggling to innovate and adapt, held back by expensive legacy systems. Now the industry is taking note of Trov’s model.
“They’re asking how can they avoid being completely disrupted in the near-term by changes in technology, changes to consumer behaviour, and the massive socio-economic changes being brought about by technology, such as the gig economy, and the sharing economy,” Walchek explains.
“They are grappling for answers.”
Trov is working with insurers that want to use its platform to offer more innovative and user-friendly services to their customers.
Fraud is an issue, and Walchek admits that the rate of fraudulent claims on Trov is higher than the industry average of about five per cent – but the system will learn to spot fraud as it collects more data, and automation may address the problem by taking humans out of the equation altogether. Imagine a smartwatch that activates its cover once it’s strapped to a wrist, or a car that insures itself once the ignition turns on.
In fact last December, Trov partnered with Waymo (the self-driving car developer owned by Google’s parent company), which will soon launch a ride-hailing service similar to Uber in the US. Trov will provide Waymo’s passengers with property and medical insurance during their ride.
“A machine, with a bit of sentience, understands it has a risk that must be insured; not by the individual, but the operating system itself.
“So now the Waymo operating system says ‘I have two passengers in the car, they need coverage’, and we turn on coverage in the cloud. The humans have nothing to do with it.”
There’s also the wealth of data being gathered by the app, which tells Trov about how often items are insured, how long they’re insured for, and the average gap between insuring an item. For instance, Trov found photographers turned their camera insurance on once every 22 days on average.
“Think about this: in history, no one has ever seen that data. It’s unbelievable fascinating. We’re not sure what it means, but it’s interesting. At least, you can start to deduce what that means.”
These insights could make huge changes to how insurance premiums are calculated, or how risks are modelled in the future, paving the way for a fairer and more personalised insurance market.
While Trov is currently focused on offering single-item insurance, there are plans to branch out to offer additional products, such as car cover, and contents insurance for renters.
“Our platform is built to insure anything, anytime, anywhere.”
Sounds like a Tinder pickup line.