What are Robo-Advisors?
In the insurance context, a Robo-advisor is a policy based advisory and management system that provides automated, algorithm-based advice to insurance customers with as little as possible or without interaction from a (human) broker.
Why are Robo-Advisors around everywhere?
Robo-advisors develop and propose sound insurance plans, by assimilating multiple customer goals (e.g. home purchases, retirement, health and long-term care coverage) and adapt their “behavior“ based on earlier customer responses. They incorporate several risk carriers and handle existing coverages appropriately.
What are the benefits of Robo-Advisors?
It became clear to me that Robo-advisors provide the future economic basis for financially viable growth (scaling) of customer-facing startups in insurance. The cost-intensive personal advisors (who are at the core of the customer experience) can be reduced to a minimum. Over time, Robo-advisors may have a significant impact on the business model of digital insurance brokers. I can even imagine that Insurtech Brokers like CLARK sell their Robo-advisor technology (as-a-service) to incumbent insurance agents, brokers and customer care centers.