Question

Briefly summarize the key point of the article, but DO NOT include any direct text from the article (i.e., don't quote or copy from the article), tell me in YOUR OWN words. This should be brief. NO LESS THAN 200 words

Explain what other businesses, or your employer, could learn from the key point(s) in this article.

Startups Show Car and Home Insurers They Need to Get Smarter

Industry faces growing threat from technology when profits are already a struggle

When you make an insurance claim with Lemonade, the online-only startup that mainly sells renters policies to young American urbanites, you quickly fill in details on its slick mobile app and then record a quick video to explain the claim again.

Smart software analyzes this video for telltale signs of dishonesty, one of 18 antifraud algorithms that Lemonade says helps it pay claims fast. About one-third are paid instantly, according to Daniel Schreiber, co-founder and CEO, while the average claim is settled in less than a day.

For established insurers this is a risk, especially when insurance policies are relatively small like Lemonade’s or in highly competitive markets where insurers struggle to turn a profit, like auto insurance.

The profits available from simply supplying funds to underwrite risks have been squeezed because capital is plentiful in insurance markets. Smaller, smarter challengers that can manage customers and the claims process at lower cost will find ways to take industry profits, sell more competitive policies, or both.

Lemonade isn’t alone. Another, more established U.S. startup is Snapsheet, which provides its app to U.S. insurers including Chubb and several smaller groups such as Ohio Mutual and NJM insurance. It can assess car damage claims in under three hours based on photos from customers via a mobile app. It closes most claims in less than three days: the traditional process can take up to 30.

Some auto insurers have become more efficient, but the industry remains fragmented. Photo: Bloomberg News

For sure, some auto insurers have become more efficient. Progressive, for example, has its own repair shop network. But the industry remains fragmented and companies know they must improve their processes, especially the efficiency and costs of claims adjusters, according to Tim Zawacki at S&P Global Market Intelligence. Auto insurance is intensely competitive: savings worth just a single cent in every dollar of premiums would make a huge difference.

Big property and casualty insurers give away too much revenue (and potential profit) to a whole network of companies that help insurers deal with clients and claims. About 60 cents of every dollar of premiums gets paid directly or indirectly to these companies, according to forthcoming research by Oliver Wyman.

Just 16 cents of that goes to things like car repairs or physical therapy and so benefits claimants. The rest pays for services from claims adjusters, brokers, software companies and other intermediaries—many of which make better profits than insurers do.

This is a big problem for insurers, which as a group have failed to earn their cost of capital for years, according to Oliver Wyman. They should try to recapture some of this lost value by building their own technology, or buying a company that can cut their costs significantly.

Some have started: Allstate , for example, has its own photo app to speed up claims estimates, while Liberty Mutual, USAA and Intact of Canada all have stakes in Snapsheet.

But insurers will struggle to boost profits while the property and casualty industry is flooded with capital and investment returns remain depressed. Their only option is to get quicker and smarter

Answer 1

Every Startups need creativity so we need below point so every new startups

There comes a point in the life of every founder where you have to take what you've spent the last few months, or even years working on and announce it to the world. You have to take your startup out of the garage and release it to public scrutiny

1. Do your market research

Conducting market research is the first step to determine if you really do have an idea worth pursuing. Begin your research by writing down what you think the problem is that your business idea would be solving. Physically write it down and keep it in front of you.

2. Secure intellectual property

Intellectual property (IP) refers to the process by which an individual or company can own the rights to a created product. Examples include patents, copyright, and trademarks. It is vital to the success of your company that you follow the proper protocol to protect your differentiating factor

3. Decide on branding

Branding is about more than just choosing a name, it's about deciding on an identity for your idea. You want to choose something you love, but you also want to choose a name that conveys the experience of using your product and the problem that it solves.

5. Choose a co-founder

Look for someone with solid track record who you have, at least, some history with. The key feature is finding someone with a skill set that is complementary to yours. Style and personality are also considerations to make, as you will be working alongside this person every day and need to know that you can accomplish goals as a team. Also, there might only be room for one person in the spotlight, so understand that one of you might be working behind the scenes and will need to be ok with that.

6. Pick a workplace

Where you work actually does have an effect on your startup as you're getting off the ground. Different environments will suit different working styles best. Many founders choose to work from home initially to save money, but others choose to rent at a coworking space, share an office, or rent and office for themselves. Don't be afraid to experiment, but don't let the search for the perfect space get in the way of your work.