For an industry grounded by its foundations of risk management, it should come as no surprise to see insurance lagging behind when it comes to innovation.
But despite such a slow uptake, when it comes to technology, Tower Insurance stands tall as a leader.
“We’re a company which brings innovative ideas to the table for our customers,” says David Hancock, CEO, Tower Insurance.
Fresh from launching SmartDriver, the company’s free smartphone app which offers lower insurance premiums based on individual driving performance, Hancock believes times are changing in a sector once bound by past processes.
“The banking industry has been very progressive in embracing technology and for a long time insurance has been way behind,” he says.
“In insurance, businesses have been constructed around policy rather than customers but at Tower, we are moving into the digital world.”
In becoming the direct beneficiaries of live data, insurance is slowly starting to understand how advantageous cheap storage and mass processing can be for business.
“This kind of user-based-insurance – or UBI – has the potential to dramatically change the motor insurance market,” claimed Mark Savage, Tower General Manager – Customer Proposition , at the launch of SmartDriver.
Echoing Savage’s comments, Hancock believes insurance telematics is now gaining traction.
“We’re very much interested in protecting people, and using technology helps us achieve this,” he adds. “Technology allows Tower to insure the individual, rather than the demographic and being in a position to provide such personalised profiles for customers is a huge step forward.”
As a company, Hancock says Tower is unwavering in its belief that usage-based insurance provides fairer pricing to customers based on their driving.
“The only way you’re going to get recognised as a good driver by your insurance company is to have been a customer for a long period of time,” he adds.
“Which is why SmartDriver, and the use of technology, is so beneficial as it provides access to live and valuable data which personalises the experience.”
Two years ago, Eric Schmidt, executive chairman of Google, announced that “everything significant we are working on is around mobile.”
Yet Schmidt’s declaration wasn’t met with the mockery of Christopher Columbus’ rounded views of the world, instead the world sat up, listened and agreed.
For the present and future of technology is focused around mobile - and when it comes to insurance across the ANZ region, Tower are leaders of the pack.
“The SmartDriver app is one of many tech-focused initiatives that Tower has planned for the near future,” Hancock says.
“At the heart of how we’re approaching this is progressive development based on what consumers are doing.
“And when it comes to the use of smartphones and mobile technology, the banking industry are giving us a chance to see what is working and what is not.”
Whether it be ATMs and credit cards in the 1960s, internet banking services in the 1990s or mobile banking in the present day, technology has fundamentally changed how the work of banking is done.
Yet for Hancock, with over 25 years of broad experience in financial services, banking has relied on technology to drive down costs and improve productivity.
“For a long time, advances in banking technology didn’t directly benefit the customer,” he adds. “The agenda of banking institutions is to drive down costs and through technology, customers can now self-serve.
“Yes there is the convenience aspect to consider but it has taken a long time to reach this point whereas insurance offers immediate value.”
SmartDriver isn’t about productivity in the eyes of Hancock; instead it's a fun way to help New Zealanders qualify for lower insurance premiums while encouraging safe driving across the country.
“With Tower we dive straight into the value proposition,” Hancock adds. “Customers give us their data and in return we offer a more customised outcome - productivity doesn’t even come into the equation.”
History may prove insurance to be slow off the mark when it comes to innovation, but as the future will soon show, the industry, spearheaded by Tower, is fast catching up...