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How to Make a Notoriously Reactive Industry Proactive

By Mike Gulla, Senior Director of Underwriting, Hippo Insurance

Mike Gulla, Senior Director of Underwriting, Hippo Insurance

The insurance industry was created to be reactionary. A customer experiences an event, files a claim and is issued payment for losses. But what if the industry as whole helped customers prevent such events in the first place, therefore saving time, money and resources for both parties? Here’s what a proactive insurance industry looks like.

Technology at the Forefront

There is a vast amount of technology of which insurers can — and should — take advantage of. Consider artificial intelligence, for one. Carriers can leverage AI to drastically streamline the quoting and underwriting management process, creating a more simplified, and therefore efficient, way to do business. Or perhaps apply this technology to the use of drones and aerial imagery. By using this technology, insurers can analyze residential and commercial property characteristics to better measure the risk of catastrophic events, like hurricanes and wildfires, and non-catastrophic events at the individual property level.

"Insurance companies should be working with customers to prevent claims from occurring in the first place"

Modernized Product

Many traditional home insurance policies are still designed to meet the needs of customers living in the 60s or 70s. They may include antiquated coverage such as pewter bowls, furs and stock certificates. It’s 2019 and we must adjust the coverages in our product to match the times. This means creating policies that cover modern assets such as home electronics, equipment breakdown, service lines and home office equipment, as examples. Modern insurance policies should also offer discounts to customers who invest in risk management technologies such as IoT sensors, which will send alerts to homeowners’ mobile devices about water leaks, temperature changes, motion and other issues that might affect their residence. A modernized insurance product proves to be mutually beneficial. 

Proactive by Design

Insurance companies should be working with customers to prevent claims from occurring in the first place. For example, they can assist customers in learning when to have their home’s pipes or roofs inspected. They should work with customers to identify and solve small issues in their home before they become big claims. Also, providing customers with smart home devices can keep their property safe and prevent potential accidents. The market as a whole has become much more consumer-centric than it was in the past, and insurance companies should be following this trajectory. With these types of pre-emptive measures, home insurance becomes proactive by design and brings down costs for everyone. 

How to Transform

Transforming a traditionally reactive industry into one that’s proactive may not be the easiest of changes and it cannot happen solely on an individual level, but it can be done. Insurance executives must invest money and resources into technology, and leverage industry partnerships to incite change. The industry as a whole needs to push forward by using its existing network of professionals and legislative officials.

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