Is On-Demand Insurance the Future?


Today, when people order a product or service, they want it right away, no waiting. It is what our culture has taught them to expect. About three-fourths of the people in this country have ordered things through a shared or on-demand service. That number is only expected to increase. What this means is businesses need to get involved with on-demand services, and this includes insurance companies.

How On Demand is Different

On-demand has already established a foothold in personal lines of insurance. Commercial insurance is playing catch up. But small businesses want the same kind of quick service that individuals do, so commercial carriers need to provide on-demand policies and service as well.

Usually, commercial policies are given to businesses for a certain time period, generally one year. The entire arrangement of buying the insurance and servicing the policy revolves around that one-year time frame.

With on-demand, however, insurance carriers can no longer work on this paradigm. The processes for selling and binding insurance will need to be fundamentally changed for on demand, as well as expense arrangements.

That means companies will need to restructure as well, including changing mobile apps. It may be difficult to do, but companies that resist may find themselves on the outside looking in on a big new market.

Current On-Demand Coverage

Right now, commercial insurance companies are offering one type of on-demand coverage – for special events. This covers a one-day engagement or something that is of brief duration, such as a sporting event or concert. But most people still buy this coverage in the traditional way, by going through an insurance agency. This is one type of coverage, however, that could quickly be purchased online.

There are other similar types of things that lend themselves to on-demand coverage. For example, there is professional liability coverage for short-term projects or liability insurance for contractors. The task for the insurance companies will be to provide the needed coverage while at the same time making it affordable and easy for customers to access.

Also, one of the most important challenges for companies will be to develop on-demand applications that can be used on mobile devices, since this is where the future of on-demand will be. In fact, the entire process will have to be designed around these mobile devices because carriers will not be able to simply determine how coverage will be sold, rather it will be customers deciding how they want to buy it.

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