Two years ago Slice set out to re-think and re-imagine insurance. Our goal was to build a digital insurer from the cloud down that would perform orders of magnitude better than traditional insurers.Through our years of experience in distribution and building back end systems, we knew it would be impossible to go purely digital with existing systems and processes. That meant we had to challenge everything, and we did; the existing policy documents, the current value chain, applications for insurance, how we underwrite, the annual renewable policy, the complex transactions, horizontal layered architectures, and vertically siloed organizations. We also challenged the traditional separation between personal and commercial, and the traditional business model and value chain.
These days, houses are being shared, cars are driving themselves, and yet we haven’t updated our auto, home, and commercial products in almost a century. Risks have changed, and they will keep changing. Current products are not keeping up, leading to gaps in coverage that will grow larger as customer needs and lifestyles continue to shift. Increasing premiums is not the answer, and will in fact force customers to seek more affordable alternatives. With Slice Insurance Cloud Services, you can be that alternative, now and into the future.
Because competition will come from everywhere
The common thinking is that going digital is about adopting new technologies like AI, Machine Learning, Bots, etc. But technology advances quickly. It will be different and better tomorrow and the day after tomorrow. Consistently trying to adopt every advancement is exhausting, expensive, and nearly impossible in current legacy organizations. Being digital at Slice is about sustained competitive advantage. We’ve already adopted all these new technologies, so you can have access to them before your competition does. Yet, we recognize that on their own they are not sufficient to sustain a competitive advantage.
For us, maintaining a sustained competitive advantage is centered around exciting and surprising your customers while getting more revenue and removing orders of magnitude of cost. That is sustainable competitive advantage.
Because it’s an on-demand, digital world
Let’s start with imagining that you can eliminate the annual renewable policy, that you can play with time in relation to revenue, AND you can join the ranks of the on-demand world such as Amazon, Wework, Uber, or Netflix while radically eliminating fixed cost in the value chain.
The goals for Insurance Cloud Services encompasses all of these disruptions. We set out to radically simplify the insurance process and make it on demand. Concurrently, while experimenting with time and convenience, we can eliminate the annual renewable policy, or any fixed period policy, and still see the same, or increased, profitability.
What if you could offer customized protections for your customers based on what they’re doing, precisely when they’re doing it? Event or signal driven data sources can ensure you’re in contact with your customers, and potential customers, not only in real-time, but at the right time, sending them that perfectly messaged “nudge”. Your customers are now highly engaged, and quite happy that you are meeting their insurance needs exactly when they need you. You can charge more for “on-demand”, while reducing overall spend for your customers, and realize more profit for your company. (Higher day-to-day rates offset the traditional annual policy payments.)
Because the industry needs orders of magnitude improvements
This industry has spent billions of dollars to automate transactions (submission, quote, bind, issue, first notice of loss, reserving, etc.). These transactions no longer matter in the new digital world fueled by customer engagement where we can make payments with Stripe and Apple Pay, interact any time via chat, and have coverage automatically added or switched based on events. The world of applications for insurance, annual policy documents with the need to endorse or cancel, and monthly mailed bills is over.
Gone are the days of layered architecture in which everyone integrates to a common claims system or common billing system. Full digital insurers can be be built and products can be brought to market faster and cheaper than integrating existing systems and legacy processes.
The founders of Slice have seen implementation of one product in one state come down from $300M in 2010 to $30M in 2013 to under $1M using Insurance Cloud Services when we wrote our first policy in 2016. Efficiency and speed of building a digital insurer cloud down, and with open source software and AI has radically changed the game.
Because it's infinitely scalable and flexible
We chose the on-demand economy as our initial niche because it allowed us to exercise our platform on a global scale. Homeshare is in 191 countries yet the largest insurance carriers are only in about 70 countries. Insurance Cloud Services had to be built for scale.
We wanted to prove we could have all the major products—home, auto, and commercial lines—all on one fully digital platform, and not only prove that it was scaleable to the US, but in the EU, Asia, South America, and so on. We wanted to prove it globally.
To do this, we challenged the traditional insurance value chain and decoupled the capacity, carrier licensing, and security from the digital insurer.
We are currently running in the US (most states), EU (just completing our licensing) and Asia.
Because we've moved from layers to containers
Current insurance technology architectures have many layers, contributing to the high cost and speed issues typical in non-digital environments. It is faster and more cost-effective to deploy a full end-to-end digital insurer than to integrate new technology into existing claims, billing, or regulatory systems.
We say that for any connection to existing system or legacy organizations you can expect 50% more time and expense, and 50% less value.
We have entered the world of containers: services and chunks that can be consumed via APIs. This allows for continuous deployment and infinite innovation. A/B testing and experimentation becomes the norm. Continuous deployment allows us to make multiple updates a day which is a weapon in the fight for true competitive advantage.
The digital insurer becomes a service and script that can easily be deployed in any new region or jurisdiction, instantly.
Because we've gone from transactions to events
The industry spent hundreds of billions of dollars automating the policy image and internal transactions such as submission, quote, bind, issue, endorsement (changes), cancel/rewrite, audit, renewal, FNOL, etc. In the meantime, the world has moved on to one of individual customer engagement in which their journey is central to the model and the carriers internal transactions don’t mean anything.
In the new world we deal with not only real time but right now. That means underwriting is not a single transaction that happens up to bind/issue, but is a process that is always running and scanning for events. It also means that we are consuming large amounts of signals and events for each risk in real-time and at the right time. For example, as the car is moving around or the house is being shared, the profile changes with the activity, thereby ending the need for a policy image.
Insurance Cloud Services was built with the customer journey at the center and with signals and events being the key tenet replacing policy images or transactions.
Because we want to provide platform for fairness and honesty
Another key tenet to Slice Insurance Cloud Services is the ability to simplify coverage at purchase and to nudge people to get the appropriate coverage (not the lowest and cheapest.). We do this by using data, machine learning, and psychology.
We developed this strategy of combining technology and psychology with Harvard behavioral scientist Max Bazerman. The idea was to encourage honesty, prevent fraud, and manage loss costs. By looking at eight primary behavioral techniques, plus artificial intelligence algorithms, we created clear, fair, and transparent paths throughout the process that are key to reducing fraud. It has led to a best in class loss ratio of 35% that is shrinking quickly as our book grows. That’s a claims ratio of just 0.5%. Unheard of for a startup in a new uncharted market.
Here’s a link to a recent Max Bazerman presentation (click on Bazerman).
Because, again, it’s an on-demand world
At Slice, we wanted to make our on-demand digital insurer available immediately without the traditional huge costs and long timelines. We wanted to eliminate the implementation and product risk so you can get your innovative minimum viable products to market quickly and enjoy all the benefits of a fully digital insurance company—on-demand.