Future of Insurance
The insurance industry is ripe for disruption. Insurance is an old and disliked business because most customers feel that they are being ripped off. Metromile is looking to revolutionize this inefficient industry. Metromile claims that 65% of drivers overpay for their insurance so traditional insurance companies can cover the costs of higher mileage drivers. The startup is a pay-per-mile car insurance company looking to provide millions of people hundreds of dollars of savings per year. This business model is radically different from traditional insurance providers by charging monthly premiums based mostly on the number of miles you drive. Metromile quotes that their customers are averaging savings of 500 dollars per year. The company raised over 190 million dollars last year. Metromile is the most disruptive company of 2017 because they are operating in a space that has yet to be revolutionized by technology.
Along with insurance, Metromile is introducing an app which has the ability to optimize your route, remember where you parked, run diagnostics for your vehicle, and even receive street sweeping alerts. This is a perfect business move by Metromile as they will be able to collect a vast amount of data, which will help them continue to optimize their insurance service. This type of synergistic business model is exactly what people have come to expect from Silicon Valley. Another wise business move was a partnership agreement made between Metromile and Uber as they plan to allow Uber drivers to only pay insurance for the miles that they drive.
Big data is rapidly revolutionizing industry after industry. Insurance is a perfect space for big data application since there is so much useful data able to be easily collected. Metromile aims to utilize large amounts of data to more accurately predict risk so they can offer fair premiums.
I believe Metromile will be a success but more importantly, they will encourage other entrepreneurs to jump into the insurance industry and other industries with outdated practices. New startups will follow Metromile’s lead by invading untouched industries with new, disruptive business models, which incorporate converging technologies such as machine learning.
A startup such as Metromile is proof that no industry is safe from the disruption of technology; as distinguished fellow at Carnegie Mellon University, Vivek Wadhwa, has claimed, “any industry which technology can be applied to will be toast”. The world still has many inefficiencies throughout various industries, which provide a great opportunity for entrepreneurs that take advantage.
