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Slice: Insurance disruption in action

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29 March 2016
Michael Fitzgerald

Most “disruptive” Fintech propositions are actually incremental; Slice.is promises to be an exception.

Celent’s Banking and Capital Markets analysts have tracked Fintech since 2013 and continue to track movements in areas such as payments, digital banking, and blockchain. More recently, our insurance team has begun looking at Insurtech, especially the initiatives coming out of the Global Insurance Accelerator (@InsuranceAccel) and Startup Bootcamp.

One observation emerging from this experience across the three verticals is that most startup propositions are actually incremental innovations. Despite numerous broad claims of disruption, most of the solutions alter part of the traditional value chain. In insurance, for example, start ups target narrow activities such as claims settlement or customer engagement with advanced algorithms, direct distribution schemes, and/or new data sources. Undoubtedly, some will deliver value, but to label them as disruptive is a reach and strikes me as sensationalist.

An exception to such incrementalism surfaced today in the launch of Slice. Its press release today announces $3.9million in funding and describes their approach as one addressing a new market – the on-demand economy – with a new product – one that combines both personal and commercial coverages into a single contract. The stated goal is to not only change the way we work with insurance products, but to change the way the insurance product works. This is why I consider this as one of the very few examples of disruption – delivering a new proposition to a new market.

Slice has worked with primary insurers and reinsurers to develop policies which provide insurance coverage on a per event, time period-specific basis. Their forms combine what is traditionally both personal and commercial coverages in order to address ridesharing, homesharing, and (eventually even delivery) services. It acts as an MGA, sourcing business both directly and also through on-demand apps such as Uber and Lyft driver platforms. Their goal is to close the current gaps that are not addressed by traditional products and cover the exposures which are often unintentionally retained by operators.

It is exciting to see a new market / new product proposition in the mix. Examples such as Slice reframe the discussion around what true disruption looks like in insurance.

Comments

  • I agree that many of the innovations we see are incremental. That said, I'm not sure making that determination is too terribly important.

    What believe to be important is to get people thinking about how we are going to change to accommodate new risk configurations, make information on the 'product' accessible to customers when required, and streamline acquisition, distribution, and service to meet the customers' expectations and requirements.

    In my mind, this is what will cause or support disruption.

    From the information provided, Slice seems to have ticked most of the boxes. It will be interesting to see the final form.

    (I have to confess I was somewhat seduced by the video on the Slice site, which recorded the smart musings of a ridesharing driver traversing the streets of Toronto.)

    Patrick Vice