This post is part of our new Future of Insurance series which interviews the leading founders and executives who are on the front lines of the industry to get a better understanding of what problems the industry is facing, what trends are taking place, and what the future looks like.
The following is an interview we recently had with Snejina Zacharia, CEO and Co-Founder of Insurify
1. What’s the history of Insurify? Where and how did you begin?
SZ: I was already interested in starting my own company while I was at MIT working towards my MBA. However, I did not get the idea for Insurify until I was involved in a minor car accident.
My premium rate with my current insurer was increasing because of my accident and I wanted to see if I could save money by switching carriers. I hadn’t shopped for car insurance in a long time and was surprised that in 2013 there was still no site where consumers could compare quotes, coverage options and buy a policy in one place. I only ran into lead generation sites. These weren't solutions, I wanted my company to be the solution.
As an MBA student, I didn’t have time to compare auto insurance quotes from multiple sites or be on the phone with agents for hours.I started to work on Insurify at MIT with some of my classmates. In that same year, Insurify was a finalist in the MIT $100K Entrepreneurship Competition.
I’ve been working on Insurify ever since. In January 2015, we secured $2M of funding in a seed round led by Rationalwave Capital Partners. The funding was used to officially launch Insurify’s marketplace website.
2. What specific problem does Insurify solve? How do you solve it?
SZ: How the insurance industry interacts with and sells to its customers has remained historically the same since the first policy underwriting. But, customers have long since changed the way they shop for products. While other industries have been optimizing for user experience, the insurance industry has lagged behind. User experience is the problem I wanted to solve.
The 21st-century consumer needs a service that gives them the power to make decisions at their own pace and with all the facts; coverage options and recommendations, price comparisons, definitions of industry jargon, discounts and more — all on one site.
Insurify is the first auto insurance comparison website that uses predictive modeling in order to make shopping for car insurance integrated and easier. Our software, RateRank, matches each driver's profile and risk levels to the best insurance carrier and coverage.
By filling out one insurance application, our customers have the ability to compare quotes from 10+ insurance companies along with their reviews, benefits, payment options, and discounts. The coverage recommended for each carrier is the same, so customers can truly compare apples to apples. And Insurify allows customers to buy as they like, whether that be online, on chat, or through an agent.
3. What’s the future of insurance?
Prediction #1: Internet of things (IoT). Connected homes will affect the number of home insurance claims in the future. Smart devices in the home could monitor water usage, temperature, energy consumption, etc. and alert the homeowner when something is off that could potentially lead to damage. For example, water usage drastically increasing could point to a water leak which then could be stopped before it does any major damage that would require an insurance claim.
Prediction #2: Autonomous vehicles. According to a report from Accenture and Stevens Institute of Technology, insuring autonomous vehicles will bring $81 billion to the auto insurance industry over the next 8 years, thanks to new coverages like cybersecurity, product liability and public infrastructure insurance. After that, insurance companies may see a drop in demand for personal policies in favor of manufacturer policies as autonomous vehicles become more popular on the road.
Prediction #3: Redefinition of distribution networks through major virtual agents. The majority of Americans still buy insurance the old fashioned way and agents spend hours filling in forms. The insurance industry will evolve similarly to the travel industry in such a way that the insurance agents will operate as the major comparison sites, and integrate directly with the carriers and other insurance agencies. These sites (similar to Insurify) will provide an integrated experience for the customer based on their preferred way of shopping for insurance: online, on the phone through an independent agent or by using virtual assistants/agents powered by artificial intelligence. We are using AI to build a better customer experience in the insurance industry and our goal is not to replace the traditional insurance agent, but empower them to deliver value to the customer.
4. What are the top 3 technology trends you're seeing in insurance?
Trend #1: New ways of buying insurance through chatbots and voice recognition. Conversational commerce is changing the way consumers shop. The combination of messaging apps, voice recognition and online shopping allows customers to browse, ask for support, and purchase from a chatbot outside normal business hours. Customers don’t have to talk to agents on the phone or in a traditional brick and mortar agency. Insurify has integrated with Facebook messenger to provide this kind of service for car insurance shoppers. Allstate and Liberty Mutual have integrated with Amazon’s Alexa to provide their customers with easy access to their agent and insurance information.
Trend #2: Development of telematics models for usage-based insurance: Usage-based insurance (UBI) uses someone’s driving behavior to determine the cost of their policy. Using telematics, companies like Metromile are able to offer untraditional auto insurance policies such a pay-per-mile. Progressive also uses telematics for their snapshot driver discount program.
Trend #3: Claims management and fraud detection with AI: Insurance companies are using machine learning (ML) algorithms to detect fraud and improve claims management. AI can improve fraud prevention more than humans ever could because ML algorithms automatically filter and approve valid claims while flagging “suspicious” claims for investigation. Shift Technology uses this technology in their fraud prevention services. They’ve already processed over 77 million claims and have reached a 75 percent accuracy rate for detecting fraudulent insurance claims.
5. Why is the insurance industry ripe for disruption?
SZ: According to the Boston Consulting Group, U.S. consumers think that digital experiences offered by insurance companies are among the worst. Shopping for insurance is a complex, nontransparent process and because of this consumers become frustrated and unwilling to trust the industry as a whole. Any industry in which this is the case is ripe for disruption.
The insurance industry has lagged behind for too long when it comes to adopting artificial intelligence. We need to embrace it and be aggressive with leveraging existing technology to provide better user experiences online and over the phone.
About Snejina Zacharia
Snejina is the founder of Insurify, the first virtual insurance agent for car insurance shopping.
Insurify is disrupting insurance shopping with artificial intelligence. Snejina has global experience developing and growing new businesses in the US and EMEA (Europe, Middle East, and Africa). Snejina has an MBA from MIT Sloan School of Management.