InsurTech and the digital wallet

A conversation with Mark Dowds, Chief Strategy Officer, Trov

In Insights, Mobile Solutions by Paul Brandner

Trov’s innovation guru talks about giving a new voice to an ancient industry and why Canadian kindness makes Toronto a great InsurTech hub.

It doesn’t matter what industry he touches, Mark Dowds is a born disruptor. With Northern Irish charm and Silicon Valley imagination, he has spent the last two decades rethinking old ways of doing things to better suit a new “untethered” way of living. Now, he and the team at Trov have created the world’s first cloud-based, fully-mobile, on-demand insurance offering. We asked Mark about overcoming barriers in the historically-sluggish insurance industry and the role UX can play in fixing flaws in the system.

Carta: The insurance industry has been around forever and it’s famously old school. How do you begin to rethink an industry like that?

Mark Dowds: Disruption for the sake of disruption is a distraction—an annoyance. So we start by looking at the core meaning of an industry.  We looked at what insurance was originally set up to do—which is to help society take risk.

That core is still true today: when I get into my car I’m not quite as concerned about driving down the street. But for the next generation, insurance isn’t covering the types of risks they’re involved with.

Those under 35 are much more mobile. Fewer people in that age bracket can afford to buy a home and in cities they often don’t want to have a car. In Toronto, New York, San Francisco or London—over the last decade the number of renters generally has doubled in each of those cities. While 89% of homeowners take out home contents insurance, only 13% of renters purchase insurance for contents. It’s a bit of a cliff face, from a generational perspective.

So what had to change to meet the needs of this young, mobile consumer?

Mark Dowds: Firstly, old insurance models have too much friction—the paperwork is so laborious that most folks don’t want to be bothered. They’re not sitting in front of a computer anymore, they’re on their phone. But if you try to get insurance on your phone it’s just a pain, compared to Uber, Airbnb, and all these naturally intuitive applications.

But secondly, it was a matter of relevance. Contents insurance is really to cover things that are in your home. But if you rent a secure apartment, the likelihood of someone breaking in is quite slim. If you’re a person that’s on the go—part of the “untethered generation”—the current product suite out there doesn’t fit you. Young people are out of their homes—maybe riding a decent bicycle, carrying a Macbook Pro in their backpack, wearing a nice watch or some jewelry, maybe an iPad. If they get into an accident or something happens, most of those things are not covered by the traditional model.

What are some of the barriers Trov had to overcome?

Mark Dowds: The biggest barrier is the technology behind insurance companies. They are data-driven companies so they adopted technology from the get go—but they haven’t really departed from the old infrastructure, or they’re patching it with other technologies. It’s difficult to approach a new, progressive user experience that can be powered by those technologies.

On Demand Insurance

For example, if you want to do on-demand insurance it means that when someone “turns on” their insurance it needs to start ticking away by the second. The current technology and infrastructure just cannot do that. They’re structured mostly around annual policies. They have online forms, but they just digitized the same process they’ve used for years rather than rethinking it for that context.

So what are those considerations when you’re trying to build a new user experience for an old product?

Mark Dowds: User experience today is absolutely everything. Large insurers don’t realize they’re living in the midst of the “Uber-ization” of everything—they’re soon going to be in crisis mode. Industries are being rapidly transformed based on user experience.

One thing that came back to us is that folks don’t want to talk on the telephone—the next generation is used to communicating via text. In an industry that’s been heavily reliant upon phones—especially when it comes to claims processing—that was something we had to wrestle down. It led us to come up with an intelligent chatbot and to bring a really strong empathetic voice. It comes across as very caring in its responses so people feel warm and fuzzy in a time of difficulty and need. Compare that to talking to a human who’s interrogating you and leading you to feel more like a criminal, when you just want to get something replaced and let your life go on.

We’re delivering a solution that goes beyond insurance—it allows you to go paperless. If I’m shopping and a retailer sends me a digital receipt, that item automatically shows up in my Trov. I’ve got the receipt and all the details so even if I don’t choose to protect it, I have a record of it if I need to go back to the store—rather than hunting for receipts in a drawer.

Trov is based in California, but you lived and worked in Toronto for many years. What did you see happening there? Why are so many fintech companies thriving in Canada?

Mark Dowds: There’s a lot happening because there’s a single regulator in Canada—whether you’re dealing with banking infrastructure or dealing with insurance. Being a Commonwealth country, there’s opportunity to go more directly to customers faster because of dealing with a single entity. In the US you’ve got to deal with 50 different regulators so if you want to innovate across America it’s like working with 50 different countries. It’s a chore.

There’s an innovative nature to Canada. They love being the pioneer. There’s also less fraud than there is in the States—partly because Canadians tend to be loyal and honest, but also because of the poverty line. You’ve got a bigger divide of rich and poor in the States and higher unemployment. If you don’t have a job, you’re much more inclined to work the system to gain a benefit. When you’re in an environment that’s safer and wealthier, like Toronto, you’ve got far less opportunistic fraud happening.