InsurTech is a new concept that is revitalizing an old industry. But what exactly is it, and how does it work? And how is Corvus shaking up something that’s already so cutting edge? InsurTech can be broken down into three primary aspects, each one important, all working together to run a system with maximum efficiency. Imagine visiting a doctor’s office— you check in at the front desk, you get your physical, and you get your bill. For most people, the bill is the greatest concern— and that’s why this third aspect is where Corvus is focusing its energy. What if you could prove to the doctor that you have been taking great care of your body all year? That you’ve been exercising, eating right, and cutting down on beers? And what if the doctor, having received this information, would, in turn, charge you less because of your healthy habits? That’s what Corvus is trying to do for commercial insurance buyers.
But we’re getting a little ahead of ourselves. So let’s begin at the “front desk” of insurance, the first aspect— that is, the contracts, the insurance platforms themselves, etc. This is the gateway to your policy, and there’s a lot of cool stuff happening in this arena. For instance, there is some great technology being applied to things like the mobile-enablement of auto claims, blockchain for reinsurance contract fulfillment, and online sales platforms for brokers and agents. This can cut the costs of managing an auto claim from 3% of premium to 2% which, given the size of the auto market, is an incredible achievement.
Next, we go to the actual doctor’s appointment— the second aspect, the product that you’re purchasing. Online channels, direct or broker-focused (Insureon or Wellthie are examples), as well as products that are sold for less than a year for the gig economy or on a P2P basis, fit into this category. Distribution costs can run from 3 to 30% or more, so reducing distribution costs is a big deal if they respond better to customer needs than conventional products and distribution methods.
The third aspect, where Corvus is most concerned, is that final doctor’s bill in the form of claims paid. This is where Corvus is particularly innovative— by using your data, we are able to help you reduce your risk in order to reduce your claims. Companies like Neos in the UK do this by giving out theft or water detection devices in order to prevent or respond more quickly to events that frequently lead to homeowners claims. Corvus accomplishes this not by creating new monitors of data, but by leveraging and licensing existing data sources to price, predict, and prevent commercial insurance claims. We use temperature sensors for cargo subject to spoilage in order to monitor and score risk with full customer (and broker) transparency. We are also perfecting the same for cyber (web-scanning technology). One big difference in this arena is the richness of the targets. In commercial insurance, between 60 and 80% of premiums go to pay claims. Reducing the cost of claims by 15% will make a bigger impact on overall economics than cutting distribution or back-end costs in half.
Corvus is excited to be breaking into InsurTech and excited for you to join us on this journey. From cargo to cars, we’ll reward you for your hard work, and you’ll reap the benefits of safer habits. By creating InsurTech for you, we are going to make the world a better place.