What Hurricane Matthew taught us about banks and fintechs

When Hurricane Matthew swept through Haiti, the Bermudas, and finally up the East Coast, the results were devastating: at least 900 people died in Haiti, and another 33 people lost their lives to the storm in the U.S. Alongside the tragic certainty of these deaths lies the economic uncertainties churned up in the storm’s wake. Haiti is expected to face up to a decade of economic recovery, while Matthew may have cost North Carolina billions in losses.

Unlike other natural disasters, however, the U.S. knew about Hurricane Matthew well in advance, so it provided the perfect opportunity for banks and fintechs to prove their customer care mettle. “An approaching storm puts people in a position of vulnerability,” said Jon Picoult, founder & principal of Watermark Consulting, a U.S.-based customer experience advisory firm. “As such, it affords a great opportunity for companies to proactively communicate with their customers and demonstrate advocacy – be it by sharing relevant information, providing reassurance, or offering some other type of assistance during the customer’s time of need.”

Some national banks grasped the importance of connecting with their frightened customers, and did so (community banks in the affected areas aren’t being counted for the purpose of this article, although, as community banks do, they were very communicative and supportive regarding all things Matthew).

Witness USAA’s epistle to customers in Matthew’s path (full disclosure: I bank with USAA):
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With this message, the insurance, banking, and investment company serving military personnel, veterans, and their families effectively ticked off everything on Picoult’s list. It shared relevant information to help customers protect their property, it provided reassurance, and it offered three different paths of assistance: online, digital, and phone.

The company also sent out three tweets about hurricane safety precautions:

Obviously, the more customers took steps to protect their property, the less USAA would have to pay out in claims. Yet the fact remains that the way in which the company communicated with customers in need was timely and on the mark. Not to mention that USAA followed up, by email

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and front and center on its website:

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Like USAA, JPMorgan Chase also understood the importance of connecting with customers as Hurricane Matthew fast approached. “On Wednesday afternoon, we posted a Weather Update ad (see bottom right) on the front page of chase.com that was visible only to people with IP addresses in Florida,” said Chase’s Tom Kelly. “That took them directly to the Branch Locator, which the bank updates in real time.”

Chase kept the severe weather ad up for 6 days.
Chase kept the severe weather ad up for 6 days.

The JPMC’s retail arm also tweeted about branch openings after Matthew passed through, showing not just its customers but the world that Chase was concerned about its customers on the east coast.

 

What of fintechs? At the time of publication, Credit Karma, Wealthfront, Square, and Quicken Loan’s Rocket Mortgage had not responded to Tradestreaming’s request for a comment. But PayPal did. “We aren’t doing anything specific on Venmo,” said Andy Lutzky, vp at Edelman. However, “in an effort to support relief efforts, Xoom is waiving fees for all services through October 15.”

So although PayPal graciously eased remittances for storm-struck Haitians, it didn’t treat the hurricane as a customer care issue. The fact that one of the more popular P2P money transfer apps didn’t see the need to address Hurricane Matthew suggests that fintechs might not be quite caught up with banks when it comes to customer care.

Of course, to be fair to fintechs, part of the reason that national banks seem to have outperformed fintechs in the emergency customer care category during the hurricane is because banks have been at the business longer. “As we’re in early days of our on-demand insurance product, and currently only available in Australia, we don’t do any proactive messaging around natural disasters,” Jeff Berezny, vp of marketing and communications at online insurer Trov.

The company is at least thinking about how natural disasters and customer care intersect. “A broader, proactive plan related to prevention is in the works that could include content-related to natural disasters, but it has not yet been activated,” Berezny said.

This is not to say that every national bank was on top of their customer care game as Hurricane Matthew stampeded towards Florida and North Carolina, nor that every fintech company was oblivious of the storm. But the above examples suggest that fintech companies, whether they want to go it solo, partner with banks, or become banks, could take a page or two from banks’ trusty customer care books.

 

5 insurtech companies targeting the Property and Casualty space

tech companies in property and casualty insurance

Insurance may not be seen as sexy, but there’s a large opportunity for technology to make the industry more modern.

Oscar Health, Clover, and Zenefits in the health insurance space are perhaps the most well-known insurtech startups. But, technology is entering all insurance categories including life, reinsurance, and property and casualty (P&C).

The first quarter of 2016 saw more money invested than ever before in insurtech businesses. According to CB Insights, there were 45 deals completed during the period, totaling $650 million. 2016 itself is poised to become the largest year ever for insurtech deals.

From new upstart insurers to backend technology providers, here are 5 startups to watch in P&C space. For the sake of this list, we tried to show the diversity in this space, rather that sorting companies by size or another metric.

Goji

Goji is a car insurance comparison engine that allows users to easily find best rates and policies. After inputting basic information about their car, users receive a short list of policies from which to choose in under two minutes. The tech company’s agents are licensed representatives of some of America’s top insurers and can write policies on the spot. The Boston-based company recently completed a $18 million investment from Brookline Venture Partners and Charles River Ventures. Comparison engines are a common business model for insurtech companies. Among Goji’s competitors are Coverhound, The Zebra, and Insurify.

Zhong An

Zhong An is China’s first online-only insurer. The company conducts all of its business, from underwriting to claims settlements, online without operating any physical branches.  It was jointly launched in 2013 by Ant Financial Services Group (Alibaba), Tencent Holdings, and Ping An Insurance Company of ChinaZhong An offers more than 100 insurance products including esoteric policies such as insurance against accidents caused by drones. The company covers business, property, cargo, liability and credit guarantee insurance. The company had underwritten more than 1.6 billion policies for more than 250 million customers.

Trov

Trov is mobile-only, on-demand property insurance. Users can insure just the object they care about for a specific time frame. For example, a college student going on a road trip with his friends can insure just his guitar for the duration of the trip. The application process in done completely through a user’s mobile phone and is completed by swiping insurance on products on and off. Claims are processed with the use of in-app chat.

“The role of insurance will change from a once-a-year transactional relationship to a more active ongoing relationship with your things,” Scott Walchek, CEO and founder of Trov told Tradestreaming.

The company launched first in Australia and will roll out a UK and US expansion through 2017. The company added some impressive names to the payroll ahead of the expansion. Neil Sands, former Salesforce chief experience officer, recently joined the team. Dane Howard, former eBay director of global brand experience and design, joined the team last year. Ken Rudin, head of growth at Google and former head of Facebook analytics, joined the Trov board in early 2015.

Snapsheet

Snapsheet enables car insurers to provide their customers with easy mobile claims processing. A customer can use the Snapsheet app to take a photo of his damaged car after an accident. The Snapsheet technology and team then work with insurers to ensure quicker cycle time for insurance adjustment and claims processing.

Companies like Snapsheet often face regulatory hurdles when trying to make insurance more user friendly. In Pennsylvania, for example, the law required insurance appraisers to be present for all automotive inspections, which was prohibitive for tech firms. The law was amended in December 2015 to allow other forms of appraisals as well, including photos.

Leaselock

Leaselock acts as a cosigner for renters and as a rent insurer for landlords at the same time. Qualified renters can easily apply online, pay a one-time fee and ensure they qualify for the apartment they want. Leaselock appeals to students, H1B workers and other people with good financials, but might have a hard time qualifying for an apartment by relying solely on their FICO scores and regular background checks.

Currently, Leaselock works with a limited list of properties. Its biggest competitor is perhaps NYC-based Insurent, which acts just as a co-signer and is backed by Argonaut Insurance Company.

Photo credit: eliazar via Visualhunt / CC BY

The Startups: Who’s shaking things up (Week ending January 10, 2016)

fintech startups shaking things up

[alert type=yellow ]Every week, Tradestreaming highlights startups in the news, making things happen. The following is just part of this week’s news roundup. You can get these updates delivered direct to your inbox by signing up for the Tradestreaming newsletter.[/alert]

The Startups: Who’s shaking things up

Income&’s Brad Walker on building a better mousetrap for retirement investing using marketplace lending (Tradestreaming)

trov’s Scott Walchek on designing the world’s first on-demand insurance for single items (Tradestreaming)

Startups raising/Investors investing

Student lender CommonBond raises $625m in total funding (CrowdfundInsider)

Alibaba’s Finance Arm Said to Seek at Least $1.5 Billion (Bloomberg)

Street Contxt scores $8m to bring more efficiency to investment research distribution (Business Insider)

Blockchain Startup Gem Closes $7.1m Series A to build a modular platform for blockchain applications (CoinDesk)

Canadian online lending marketplace Lendful raises $15m (Finextra)

Xfers Lands $2.5m To Simplify Bank Transfers For Online Sellers (TechCrunch)

LoanNow Secures $50m Credit Facility (Finovate)

trov’s Scott Walchek on designing the world’s first on-demand insurance for single items

trov inventory and insurance app

Scott Walchek is CEO and Founder of trov

What is trov and what was the genesis story? What was the inspiration behind starting it?

Scott Walchek, trov
Scott Walchek, trov

Trov is an application and digital insurance platform that together reinvent the way people insure their things by harnessing the information about all they own. Designed for the emerging generations of digital natives, Trov completely redefines the way people protect their possessions by letting them choose just the things they care to protect, and engage insurance for as long as they need it – a year, a month, a week, day, hour…whatever.

Together, the Trov app and platform enable the world’s first on-demand insurance for single items and feature micro-premiums, micro-duration policies, and entirely disintermediated claims – all from a smartphone. This “streaming insurance” will empower numerous new use cases including automatically turning-on protection based on date, time, location, and event.

In 2010, for the first time in history the make up of Global Household Wealth was evenly split between financial assets (cash and its myriad equivalents), and tangible assets (personal and real property) [from 2011 Credit Suisse Wealth Databook]. It intrigued me that while there were innumerable tools for analyzing and managing financial assets, there were no similar and simple tools for managing tangible wealth. That intrigue was followed by a recognition that there was enormous value latent in the information about the things that people own – and if we could capture that information and give people agency over it on their mobile devices, then we could positively impact numerous substantial markets. The first of these market disruptions would be in the P/C insurance space where emerging generations were demanding their financial services be delivered on their mobile devices, on-demand, and a la carte.

Insuring belongings has traditionally been hampered by the inefficiency of cataloguing all our stuff. How does trov change all that? And in doing so, how does the role of insurance change?

One of the biggest problems with traditional home contents insurance is that people pay a set amount of money year on year, without many questions, yet are often unsure what is actually being covered. We frequently hear of incidents when people report claims for their belongings and then their most valuable items are not actually covered.

Trov provides on-demand protection for the things that are important to you and you always know exactly what is covered and in what situations. Instead of trying to document all of your important items after an incident occurs, Trov makes it ridiculously easy to collect and update information about the things that are important to you – as you acquire them. You are then given the option to easily “swipe to protect” the items that are most important to you and then easily “swipe to unprotect” items that you may have discarded, sold or have lost value to you.

Furthermore, we’re working on opportunities for adaptive protection that is adjusted based on your situation. Imagine having insurance for your skis turned ON automatically when the ski season begins and OFF in the Summer, when you no longer need the same level of insurance.

The role of insurance will change from a once-a-year transactional relationship to a more active ongoing relationship with your things –  protecting just what you want, when you want – so you can get back to enjoying them.

What were some of the challenges in making insurance as easy as interacting with our phones? How did you solve for them?

Trov is 100% mobile, meaning it has no desktop/browser version.  This is a self-applied constraint that has forced us to be very selective in the features we introduce. Furthermore, by keeping the application entirely mobile, it has actually allowed us to introduce more unique features that are only available on mobile devices. These include things like taking photos with the app, detecting location for your home, scanning barcodes and receipts. If we had a desktop version, then none of these features would be possible.

Insurance today is bogged down by heavy process and forms, often requiring the need to talk directly to a person. By moving the entire process to the phone we’re making getting insurance as simple as a ‘1-click’ Amazon purchase. What’s more, claims can be as simple as a quick text message exchange with reimbursement or shipping of a replacement item happening in minutes – instead of days or weeks.

By placing the entire insurance process on a phone, we quickly realized which processes were absolutely necessary and which were simply functions of an arcane insurance model. Needless to say, we discarded what wasn’t necessary and made the entire process much simpler.

What’s in store for 2016 for you and trov?

In 2016, we will begin to roll out our on-demand insurance platform.  Limited release launch will take place in Australia and the UK in the first half of 2016.

Photo credit: Seattle Municipal Archives via Visualhunt.com / CC BY