Only last week Revolut announced it is launching pet insurance to sell to its 4 million banking customers. The launch of its pet insurance, complementing the firm’s existing insurance offering, which includes travel insurance, ticket- and missed event coverage, as well as purchase protection, is another move by the company to strengthen its financial super app.

 Look out! .... “the first of many future standalone Revolut InsurTech products,” the company said. And before this rival neobanks Monzo and Monese launched insurance products.

Swiss Re's iptiQ platform is the base of this innovation and another reminder of the importance of modern architecture core technology. Too many insurers are constrained by legacy CoreTech and even modern legacy CoreTech rooted in hard-coding, three-five year major upgrades and high cost is showing its age and limitations.  I'm writing more in that next week. 

Whilst incumbent banks have improved online banking the NeoBanks are streets ahead in working from the customer backwards to deliver what customers want. Incumbents have the advantage of customer lethargy to maintain business but over time loyalty and retention is at risk.  Both incumbents and new banking rivals are noted as being ahead of insurers in the innovation stakes so what goes in in banking you can expect to see in the insurance world.  

In How incumbent carriers survive, thrive or will be disrupted I reviewed the threats and opportunities to incumbent insurers. NeoBanks add fuel to the competitive fire.

Not only that, specialist full stack "NeoIinsurers" offer products designed from the customer backwards and have a digital maturity to equal that of neobanks. Take BoughtbyMany in the UK.

This data is from the Altus DigitalBar measuring 19 digital maturity criteria of UK insurers. Not just pet but motor, home, gadget, travel, rental and short-term car insurance.

Compare this with as a traditional 'gorilla in the market' PetPlan.

A mass of red compared with BoughtbyMany and. I predict, Revolut. There may not be a massive switch of customers in the short-term but these changes happen "gradually gradually, suddenly"  to quote  Ernest Hemingway observing habits, behaviour and change. The Great Canyon was formed on drip at a time but incumbent insurers do not have that long.

Luckily they do have access to technology partners so that with the right vision, leadership, strategies, talent and resources they can anticipate potential disruption. Or not!

Don't even start me on decentralised finance (DeFi) which is an existential threat to traditional carriers and reinsurers and reviewed in How incumbent carriers survive, thrive or will be disrupted 

Further Reading

STARLING BANK ECOSYSTEM: THE FUTURE OF BANCASSURANCE?