Insurance & Risk Professional: You’ve been busy setting up a new company. What’s the focus of this new venture?
Eric Lowenstein: The company is an underwriting agency called Tego Insurance. The word Tego originates from Latin, meaning: to defend and protect. What we are really about is creating the future of insurance.
We believe in challenging the status quo, raising the bar and thinking differently. We strive to be innovative and reliable, and we believe in superior client service, trust
The agency is going to be operating on a broker distribution model and will be backed by a local APRA regulated insurer that’s committed to the segment we are looking at, for the long-term. The segment we are targeting is a really interesting one. It is highly regulated, but it is ripe for disruption.
We believe that our business model is really going to bring a proposition that will be a game-changer for this sector. It is actually going to create an exciting opportunity for
brokers. They will be able to tap into this market, which they have had limited access to as it is currently serviced as a direct-to-insured model.
We have also developed a pretty innovative market-leading product, that will certainly ruffle some feathers, and create new opportunity within that market.
IRP: What do you think it is that makes a market or an industry ripe for disruption?
EL: People often use the words disruption and innovation together. If we go back a step, innovation means doing something different that creates value. Innovation is not always complicated. You do not always have to reinvent the wheel. You just need to have a simple solution to a problem. When you think about disrupting a market,
you just need to find a different way of adding value. That is what we have done.
People talk about disruptive innovation, but what it boils down to is thinking about different areas of new product offering, new markets, different channels, how
the customer experiences change, and how you can change the supply chain.
In short, when you think about a segment to target, you have to marry up all those different aspects, and put them into perspective.
IRP: What inspired you to launch your own business?
EL: For us, it was about challenging those industry assumptions and the status quo. There are three things we need to consider: new markets, new value and new business models. In regards to new markets, you look at your customer. What customer segments do you serve? When you are looking at new value, you are looking at what you offer your customers. What other problems can you solve? The business model is actually how you create that value proposition, how you reach your customer, and how you find that opportunity of inspiration.
But you can’t read the label if you are sitting inside the jar. You really need to take a step back and think outside the industry. You have to look at other organisations. You have to look at other countries. You have to think outside the box. I suppose, for Tego Insurance, the opportunity was really to understand those perspectives and bring something unique to the market. We have had to overcome high barriers of entry. The insurance regime for the segment we are targeting is very political. It is heavily regulated by national and state compliance and reporting. But where there are barriers, there are opportunities, you just need to have that different perspective.
IRP: How can brokers go about identifying new markets and opportunities, and what kind of processes did
EL: There are four key perspectives, or thinking patterns, that we have adopted, and certainly that other brokers can too. The first one is to challenge convention. You have to think about the dominant orthodoxies in your field or industry. Are they outdated, unnecessary, or just plain wrong?
The insurance industry is a great example of that. We have traditional insurance models that are being disrupted by companies born in the digital age. They can run at substantially lower costs through automation, self-service and efficient distribution models.
Secondly, they operate at lower loss ratios because they have claim management, and loss prevention techniques relying on big data, and predictive analytics. This is all about challenging the convention.
The second is about harnessing trends. Understanding the shifts, both now and in the future, might just provide the platform your business needs to remain relevant and survive. We are seeing a whole new ecosystem evolving within the insurance industry. The use of telematics, the internet of things, smart homes, wearable technology,
and even self-driving cars. These trends will have a profound impact across the entire industry value chain. Brokers need to start thinking about how these trends will impact their business model, and how they can take advantage of the opportunities these trends create.
The third perspective is about leveraging your resources, understanding your skill set and understanding your core competencies. How can you arrange these existing skills
and assets into new combinations that add up to more than the sum of their parts? This perspective allows brokers to figure out how they can repurpose skills and assets to do totally new things.
The final question is this: what are the unmet needs and frustrations that everyone else is simply ignoring? That is the final ingredient, and that is based on the premise that in order to innovate you need to have a curiosity about how everything works. You need to be inquisitive. You need to ask lots of questions. One way we have done that is by
creating the customer journey map.
This explores the customer engagement lifecycle. If you map it all out – reaching, engaging, converting and retaining clients – and think about every point in the process, you can actually start to dissect the touch points, and think about how you can differentiate, and add value to your customer’s world. These four, simple steps are a great start for any organisation when thinking about their industry, and how they can innovate and look for opportunities.
IRP: What were some of the challenges you faced in setting up the broker distribution model?
EL: Due to the specific regulatory requirements within our target segment, the big focus we had was around how we deliver broker-training workshops. How do we provide them with the resources they’ll need to engage clients in a meaningful way? Because it’s a new segment for most brokers, they need to be armed and equipped with that information. They need to be confident. For us, our whole proposition is about customer service.
The broker is our client. Being able to provide them with help to build their knowledge and skill set is in our interest. We want to make sure that our brokers are confident in selling the product, understanding the risks and engaging their clients. Helping them to achieve their goals and look good in front of their clients is very important to us.
IRP: Where do you plan on steering the company following the launch?
EL: Based on initial discussions, we have had overwhelming interest and support from the broking community. But we cannot become complacent. Change is constant, and we need to be agile. We need to be continuously looking at ways to innovate and to enhance our product offerings. I suppose, in terms of where we are going, we are certainly already looking at how we can expand our product range within that segment to other lines, and we certainly look forward to rolling those out in the coming months.
IRP: Any final thoughts on some of the insurance trends we will see in the coming year?
2016 will be an interesting year as technology and non-traditional players keep inching their way into insurance territory. We will also see data and analytics continue to play a big part in the future of insurance. Analytics has come a long way, from descriptive analytics, which is ‘what happened’, to predictive analytics, which
is ‘what will happen’.
And it has already gone a step further – prescriptive analytics judges what should happen, and makes it happen. We are starting to see Google and other tech companies experiment with this as a way of tapping into the insurance market. For a long time people have been saying the insurance industry is going to face some major disruption – particularly now, given the Government’s focus on innovation in Australia.
I think this is going to be the year. It reminds me of a quote from Alice in Wonderland. The Queen of Hearts sums it up nicely: “Around here we must run as fast as we can, just to stay in one place. And if you wish to go anywhere, you must run twice as fast as that.” We need to be on top of what our competitors are doing, on top of what the market is doing, and we need to keep having conversations about it. We need to keep adapting and changing to ensure that we are at the top of our game.