There’s no doubt that technology has the power to help the insurance industry. This week, we’re left wondering if a new development may hinder some insurers and boost the profiles of others. Traditionally insurers have been rated on their financial performance and perhaps their stockholders. These measurements are great if you want to invest in insurance; but not so great if you want to take out a policy. The question is; what should insurers be rated on from a consumer perspective?
There’s a chap called Dan Karr, in the United States, who found himself seriously injured when a car ploughed into his bicycle on his way to work. He then tried to claim on his insurance policy for the damage. He ended up facing $100,000 in medical bills as his insurer tried every trick in the book to try and evade paying out on his policy. Dan’s a powerful Silicon Valley executive; he had the resources to fight his insurer and he sued them and won. He even wrote a book about the issue.
It appears that Dan’s experiences had a major influence on his life because he is now forming a company called Injured Money. Injured Money proposes to be the first insurance ratings agency that looks at the consumer perspective.
What Should Insurers Be Rated on From a Consumer Perspective?
There’s probably only one thing an insured party wants from his/her insurer. That’s the ability to get paid when they need to make a claim. They aren’t interested in the weasel words of the small print of their policy (and if we’re honest – it’s unlikely that many people actually read that small print in the first place) they want to know that they’re going to get paid out.
They want that process to be as painless as possible too. They don’t want to have to sue their insurer or complain to a Financial Ombudsman they’re dealing with trauma and they don’t want insurers adding to that.
That’s where Injured Money intends to make life easier for the consumer. They’re going to rate insurers on their claims payment ratios. A potential customer for motor insurance will be able to see that company A may be cheaper but they are also 3 times less likely to pay in the event of a claim than company B.
Early Days but Be Prepared
At the moment, Injured Money is in its infancy. It’s also only going to be happening in the United States (so European insurers can breathe easy) but given that it’s raised 75% of its Kickstarter funding requirements in just under 10 days (with 20 more to go) – it seems that Injured Money will be a reality. If it is a success; it’s likely that a similar service (or perhaps the same service) will make an appearance in Europe very soon.
If that data was then combined with insurance aggregator data; there’s potential for an enormous level of disruption in the insurance market. However, it’s clear that customers may well give this idea a thumbs up.