The 7 deadliest mistakes insurance companies make today that might jeopardize their profitability (and even take them out of business) on the next 5-10 years


Insurance has remained a dormant area for quite some time. Almost every other industry has become deeply transformed by technology during the last 10-20 years. In all these areas, we have seen major disruption. Lots of innovation coming from small start-ups without too many people or too much money

Most of them have failed miserably, to innovate and to market themselves. They executed poorly. But some of them made it.

Some of them "disrupted" the way we did business in that industry, the products, the offers, the marketing. And now those industries, are not what they used to be anymore...

Because the changes have been so profound...nothing remained the same.

Right now, we're seeing a major transformation in finance. With the raising of Fintech with companies like Transferwise and Monzo in the UK. Bank APIs are becoming ubiquitous and everyone can access bank information easily and fast.

We have even seen the rise of decentralized currencies. They even have their very own "Market Exchange" where they are being traded daily. Basically, a FOREX for digital currencies.

That hasn't happened to insurance...yet.

The Trend

But now, entrepreneurs from every breed have turned their eyes into this untapped industry. Into this virgin terrain. And boy, are we going to see a change in insurance...

We can see it already in the US. There are early indicators of this. Just look at Lemonade. They are getting flooded with waves of new customers.

Or Cover, which was dismissed because they were insuring everyday objects. Now, the guys from Cover are turning their eyes into bigger and better stakes. And since their customer base are happy with them...guess who is going to lose big time?

These are just a couple of examples. What is important to take away is what they are doing is to set the new standards of how clients are treated and want to be treated, what they get out of their money, and how their money is going to be spent.

With this trend and so many new startups getting funded and rushing in the scene, these industry transformations are going to happen. And they already started somehow.

Here is a list of the 7 potential errors well and long established insurance companies are doing today.

The meat

1.Dismissing companies because they are small.

Being small might be just temporary. Small companies can pivot and change their product and the value they bring to the table very fast.

Just look at companies like Cover or others alike. What they did when they start might not seem impressive/important to you and your market share...but on the long run, and this is all about the long the run, they will change their focus and thanks to their momentum and buzz, end up affecting your market share.

2.Don't diversify your products.

Some of these ideas might not seem serious to you: What about wrist-watch insurance? Sure! Pet insurance during owners' work hours? Sure. Whatever another crazy idea? Sure!

But having some of those projects on your project's pipeline, ready to go live and give it a try, may prove very valuable and save you lots of money and time in the future.

And it is as easy as just having a small team creating and working on new ideas, all the time.

You can try if that works for your clients as well. You might not move that fast as the little startup, but you certainly have a bigger client base to offer your services to. (And to test if this works and generates revenue or is just a failed attempt.)

3.Don't be open to partnerships early on.

Being open is is a win-win agreement for both sides, even if it doesn't look like. When these startups are young, they need lots of effort, money, partnerships, and press.

Founders are looking around all the time for great partnerships, and while they are young they might accept your terms. Terms you would otherwise not get when they are bigger. And sometimes, when they are bigger, they just don't need any partnerships, or if they do - you might have to agree to their terms.

4.Playing the big company role.

This means getting in touch and going forward with a partnership, deal or whatever involving a second party, and then pulling back your offerings. And then not getting in touch again for some months, and go after them some months later.

You can afford to do the short term. It's easy for a well-established company to take its time to get to a decision. Or even to wait for months. Or to change their mind.

But the new blood coming to play, are not in the mood to wait. And if your deals don't go through, and you pull back, you might not be in a position to do so in the not so distant future.

Because it is an integrity game and some of the things big companies do, are usually perceived as sneaky for smaller companies. And that can hurt badly their reputation. Even if they don't realize this can happen, it does.

5.Playing the well-established company trick

"We have been around for 50 years" - that means nothing. There was a point in time this was very important. Especially when you were facing the public.

Now? Saying you've been around for 50 years, make you look...antiquate. You are perceived as a dormant giant. You might have done well and maybe your offers are good but... this new company have so much energy and their offers are so good and they pay so much attention to their clients and to detail...

Clients will think you're good and then go away and join the newer one. Especially if their offers are attractive.

And when facing young companies... "We have been around for 50 years" it also means nothing. They are disconnected from the establishment. And see the establishment as lack of innovation.

Finally, when you think, "we have been in business for 50 years," that makes the whole company - (your company) - not to consider threats or to think no one is going to kick you off the market.

6.Not acquiring competition early.

That's a huuuge mistake. It is also a mistake to acquire competition too early. Both are really bad. There is a sweet spot which lays between the value provided (and perceived by their clients) and the number of customers in their database divided by the churn rate (people changing companies).

The margin is pretty slim, but you always want to keep pushing the needle to that point. And the closer it is to that sweet spot, the fastest you should acquire them (and integrate that technology into your own system).

7.Starting and holding bad relationships with clients.

This is so frequent I can't believe someone hasn't done anything before to address every aspect of it.

One of the best intents though comes from AXA. They have been investing lots and lots of money into rebuilding their brand from the ground up and become a more vital and company.

But they still have a long way until clients get the same relationships you can have in the consumer market where clients have every other right and everything is easy, fast and painless.

Better customer relationships is a two-way street. You need to have somehow a two-sided communication between the company and the client. And that is the first point we address as a company. Because we know it might be hard to do that when you're focused on other areas. Like actually insuring itself.

In Closing

While we don't know certainly what is going to happen and which startups are going to make it, and which not. Which insurance companies are going to remain and which ones are going to go for the better, we certainly know this change has already started and it's going to stay.

And just as a reminder, there was a time we all searched with Altavista. And when Google came out with their PageRank algorithm people dismissed them because Search was already "figured out". But time has demonstrated there is always some room for improvement. In the case of Google, for a big improvement. What do you think of insurance?

Kippie helps big insurers perform their critical mission. We act as a technology support and we help to optimize their customer relationships and customer journey, to reduce operational cost, to get more engagement, to improve their customer profiles and do relevant upsells.

How to operate in a highly uncertain environment and what you can use in your own advantage to navigate to a bigger market share

Very simple. You have more mobility – meaning you can operate with fewer margins and lower prices. Start-ups cannot.

You can always compete (facing the public) in three categories:

  1. Price (based on perception)
  2. Customer satisfaction
  3. Superior technology/marketing (or both)

You could blow most of the new competition away in any of them – and all them altogether. How is it that they survive and make it?

But the question would better be – what do new insurers have that old insurers don’t, and how can big insurers play somehow at the same level?

The battle against perception – why new always wins and old always loses.

But the trend might be favoring them…

Looking at the graphs, it seems pretty clear that 1) there is a flow problem, and 2) there is a perception problem.

Established insurers are regarded as the old, new insurers like the new promise “battling the old” to bring a better “future” to the users.


But this narrative, in a more formal way, is what most of the people have in their heads. Big insurers are “evil”.

These narratives are stupid but they are based on a human cognitive bias. That’s why so many people do it.

So, what can you do? A flow problem – where money is and where should it go. You have more money at command than any startup has, they have the expertise in technology you lack.

As I explained in this post one of the biggest errors is not to partner faster with startups in the InsurTech sector. And it also makes sense, because you bring to the table industry expertise - which in this sector, is really difficult and hard.

And they bring to the table technology expertise and also a new viewpoint. Especially if they come from the consumer side of technology, they know the one who delights the user wins, everyone else loses.

And that to me, seems a match made in heaven.

Stay tuned for more technical posts with more in-depth industry analysis


Sam Evans, Founder of Eos Venture Partners, Innovation Blog: The peak of inflated expectations?

Alex Harari, Business Consultant at Charles Taylor,Insurtech partnerships are key to profitability in the insurance industry

Why is Kippie such a valuable asset to Insurers?

InsurTech is raising and threating big companies.

The reason is simple, new insurers don't have big overheads (some not even small overheads.) They don't have legacy systems they need to maintain. They don't have thousands upon thousands of papers to store.

They don't even have a reputation they have to maintain. They don't have to coordinate international teams. They don't have to wait for decisions to get approved, voted and planned to implement.

We all know what that means. This means you have limited movements.

And it also means, innovation, disruption is really difficult. At least coming from inside.

Also, operational margins are every time lower. And even though the market is expanding, growing because of population growth. We have seen 5% growth year over year with a 15% reduction in premiums.

And struggling to get clients - as cost per client (acquisition) is an all-time high.

This is science

Marketing wise, there are only 3 ways to increase business:

  1. Get more clients
  2. Get your clients to spend more money with you
  3. Increase the frequency of purchase

Certainly, the easiest one to do is the second one. And that's usually done through up-sells.

And here is where Kippie comes into play.

We know the best moment to produce an up-sell is just right after a customer has made a purchase. Yes! Weird as it sounds. And it goes against “common sense” – but it’s the best moment. And that's where we do present them an upsell.

We also know that these up-sells have to be relevant to them and it has to appear to be "magic". Clients should be asking "How can those guys always delight me and be always right on-spot with what I need?"

And by looking up at the user buyer’s history and doing a simple best match algorithm, we can find the relevant and best insurance.

Finally, we do know we need to build trust in order to sell and to up-sell. There are subtle things in building trust that resembles the flirting process, and if you get them right, you're way ahead.

And we incorporate all three of these elements (that's part of our secret sauce) we do a great job altogether.

Well, we do that and more. But this is a really important one. Oh yeah! and we also reduce acquisition cost/marketing cost by optimizing the on-boarding process. Which comes handy when you have many overheads to cover.

Another part of our secret sauce is: we define ourselves as a customer-centric company. What that means is: Your customer is our customer. And we better 1) engage them, 2) please them well and 3) make them happy – so you get a better quality relationship with this customer.

Kippie is on fire! (On the good side of the things though :))

Kippie just turned a year old this summer and we just have thought - "why not to do a recap of what has been going on for this last year?"

We thought that was a good idea and this post is about that. So for those curious on what you do when you are a startup in a field where you don't have any connections whatsoever and for those who are themselves asking - what have you been up to? - this post is for them.


It has been indeed a mix of stuff but which actually boils down to basically 3 things:

  1. Talking to clients, to find out how to drive value (about 6-8 months, no real building)
  2. Show what we have build.
  3. Rinse and repeat until value is found.

To some of you this might sound as the bread and butter of business, to other this will sound like Hebrew. We have mixed feelings on which side do we stand on this. For one we knew and were trying to find Product Market Fit (PMF) and as we are well versed into Steve Blank's literature, we were not naive on the cycle to get to PMG, nor this is our first startup so we know how to deal and tame clients.

However, this time was different and it is only because (1) insurance is different and you kind of need to play by the rules - I guess you might have heard at least a 1000 times "Insurance is different, here you need to partner with incumbents to get somewhere" or "First get to the PoC and then - will see. Lots [of companies] get to the PoC, little are able to monetise thereafter." (2) we got a really BIG and early interest from a lot of people (mostly from the wrong ones but still) because of the InsurTech wave we were trapped in and didn't know about.

We finally find out - and only because James (our mentor @Startup school and very experienced in B2B sales) suggested that we might be speaking with the wrong people. That turned out to be downright true. Business dev and CIO's are not held accountable with usual standards. However, when we found the people that was being held accountable on real metrics, that's what put us on the right track.

In the midst of all that, we had a co-founder break-up. A co-founder found-up. Lots of side working before the co-founder was added to project and developed a relationship. Lots of hustle

Today - after 6 months of heavy development time and having spent more time listening to the right people we have:

  • Our main app and tools 1st stage done and ready to ship [ this needs one-on-one customisation for each client].
  • A GDPR Compliance tool.
  • A fraud detector - best of class based on our metrics - we haven't yet find anything better. Also way cheaper on CPU cost.
  • A Chrome extension (almost done).

And all our apps are enterprise-ready, with ability to handle millions of requests per second and a 99.9% uptime. Pretty damn good for a team of two, isn't it?

For those who are here for the first time and are wondering what the hell is Kippie. Kippie is here to (1) Remove forms from internet - the 90's are long time gone and forms are outdated - and (2) internet businesses and business who automated their processes on internet need real relationships. They need to be able to provide the WoW experience you have when you go for the first time in a Lush or when you need to have a devolution with Amazon or when you buy from Zappos.

We bring the common denominator back and enable you as an insurer to make more money and to have better and more satisfied clients - which is a win win win for everyone.

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