Community Insurance

Millennials and Generation (GenZ) all have one thing in common - they don't like the idea of buying insurance. Wait...; maybe this is across all generations? Plus, there are the labels - lazy, entitled, self-centered, disloyal and spoiled, but again are this not all generations at this young age?

Let’s not focus on this, let’s take a closer look at this new (ish) group of young adults, what shines out for me is that they are turning to borrowing, sharing, renting and hiring rather than buying. They want the 'experience' not the hassle of ownership. They want the ease. Cake & Arrow have been studying this group and their insights are interesting, not just for insurance but for all of commerce.

Millennials have grown up with a fully functioning computer in their hand and this drives everything.
While not all Millennials/GenZ are alike, there is one term defining their generation most might agree upon – the convenience generation. From on-demand taxi services, to on-demand food delivery and on-demand entertainment, these adults have opted for new levels of convenience unlike any other generation before them. Millennials and GenZ are choosing the convenience of Boxed and Amazon Prime over the prices of Costco and Sam’s Club.

How is this insure industry responding? We see terms like “digital transformation,” “personalization,” and “on-demand,” these are the chosen jargon of the industry, used in industry events, panels, webinars, and reports across the world in an attempt to set clear objectives and guidelines for companies that want to stay relevant. What’s more, these terms have been portrayed by others as promising opportunities for those willing to embrace the journey.

But is this true? Do we really know that this is what drives a millennial insurance shopper? Or is that just the convenience of the ability to deliver on this in the context of what a company was doing anyway? Let’s make it digital??? This is the easy option; it’s got to mean something. Having a fancy front end, is this enough?
I believe that digital is a step in the journey but it not the end of the journey or even the point of the journey. The journey to me is much more than this, it is about making a difference and bringing out the true qualities of the industry, the fundamental reason for insurance and the difference it can make to those who take it out. These qualities are hidden and pushed way back in the dim past of the industry and the companies that form the industry. It’s the WHY of the industry, yet this seems lost.

For Microinsurance, we are going to bring out this WHY. People talk about Peer to Peer insurance, but isn't this what insurance is anyway? Why do people want insurance, why is it such a good thing? Is the only reason you buy insurance is because you are forced to? Let’s look at a bit of the origins of insurance to find out the why it came around in the first place....

The first methods of transferring or distributing risk in a monetary economy were practiced by Chinese and Babylonian traders in the 3rd and 2nd millennia BC. Chinese merchants traveling treacherous river rapids would redistribute their wares across many vessels to limit the loss due to any single vessel's capsizing. The Babylonians developed a system and practiced by early Mediterranean sailing merchants. If a merchant received a loan to fund his shipment, he would pay the lender an additional sum in exchange for the lender's guarantee to cancel the loan should the shipment be stolen or lost at sea.

It's about looking at activities, groups and risks and providing cover for them should something go wrong. The whole point of insurance is to build a community and allow large groups of the members to pay a little (insurance policy) towards the losses (claims) of the few. Even there is more innovative concept like Climate Change Insurance in this challenging atmosphere when we are facing such a anthropocentric situation. Even Parametric insurance is a type of insurance that does not indemnify the pure loss, but ex ante agrees to make a payment upon the occurrence of a triggering event.

This is the thing that seems lost today, users don’t’ see their part in the community giving benifits to the few. Today’s insurance industry has drained all the feeling and warmth from their products. They forget the people paying for the few who claim. They forget to highlight how the easy payments of claims really benefit the ones who have suffered.
Microinsurance is all about the claim. Building in transparency to all customers. Not just the claims but the policies - allowing the communities that are built around our policies to see the claims and see how their money has helped support the community.

GenZ and Millennials want to be part of communities and helping support others and bring sense in to their lives. To grow and be relevant to these generations’ insurance needs to update it and be more than digital, it needs to get back to its early existence and be part of the community, for the community.

Know more about us at: http://blog.microinsurance.com/post/climate-change-insurance