What’s next for digital insurer Next Insurance? The company, which offers small business customers policies online, is becoming a licensed carrier in order to provide a greater range of innovative offerings.
Before this move, Next acted as a managing general agent, selling its own insurance products but partnering with insurance carriers who underwrote those policies. The shift from an agency to a licensed carrier is intended to give the insurer more control over its underwriting and pricing, allowing it to launch new products more quickly and provide more tailored offerings.
Also, as a carrier, Next will now write policies independently and can apply technologies like artificial intelligence and machine learning to improve its underwriting process.
Alon Huri, Next’s co-founder and CTO, says that becoming a carrier will give the company the speed and flexibility it needs to deliver the digital insurance experience today’s small businesses say they want. Next focuses on beauty shops, contracting businesses, daycare operators, fitness centers and other professional services. “We believe enabling this kind of innovation is something that can change the small business insurance landscape,” he notes.
In January, Next released original research showing that 44% of small businesses have never had insurance. “We were amazed by that number,” Huri admits. “We felt the current perception of small business insurance was bad.”
Traditional offline insurance policies are not tailored to the specific requirements of the thousands of different types of small businesses in the U.S., nor are they easy to maintain or cancel, according to Huri. They are also expensive and notoriously time-consuming to set up, he says, while many small businesses often need immediate coverage. The Next study found that 74% of businesses surveyed wanted their insurance coverage to start within a week, and 49% wanted it to begin the same day.
To accommodate them, Next has introduced Live Certificate, which offers instant proof of insurance with digital real-time policy validation from any computer or mobile phone. The Live Certificate can be emailed or shared with anyone as verifiable proof of an active insurance policy.
“Our vision was to simplify the process dramatically by offering tailored, affordable policies 100% online,” Huri says. “Becoming a carrier means we can offer dedicated underwriting and custom processing, allowing us to provide tailored policies for each business.”
Next plans to work closely with state insurance commissioners to champion technological innovation and explore the use of AI and machine learning, along with other opportunities to modernize the small business insurance market.
Despite becoming a carrier and moving away from an agency model, Next still plans to maintain its strong relationships with other insurance companies.
“We have very good relationships with all of our partners and investors,” says Huri. “We will keep working with them and, as I see it, these relationships will continue to help us to fulfill our vision to disrupt the small business insurance industry.”
Next Insurance obtained its first carrier license from Delaware and plans to register as a carrier in additional 7-9 states by the end of 2018, with plans to expand to all 50 states.
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