Instant Insurance and On Demand Insurance: the new frontiers of insurance offerings

The insurance industry is undergoing a profound transformation process that places the consumer at the center and tends, to develop around his or her needs, interconnected ecosystems that intensively exploit new techniques and technologies to offer increasingly tailor-made products and services, capable of meeting the need for coverage even against new and emerging risks.
Companies are required to operate in a highly competitive market with low returns on investment, so these are focused on improving operational efficiency and profitability through an increasingly accurate underwriting process, through measures to control costs, and through offering new products as well as operating models that promote risk prevention. To date, there is a strong need for insurance players to critically review their offerings, as well as to prioritize innovation and leverage the development of products and services that fall under the definition of Digital Insurance, i.e., at the basis of which is an extensive and driven use of data, and advanced tools that enable its processing. Companies can also and especially foster innovation through a two-pronged approach: by developing their own strat-up incubators rather than by forging partnerships and deals of varying nature and scope with technology providers and InsurTech.
These are the premises that drive toward offering innovative products and services such as Instant Insurance, Microinsurance which are digital insurance models that allow companies to respond to the insurance need of an insured, or a potential customer, exactly when the need arises and to do so only for the period of time needed; but also towardOn Demand Insurance i.e., a model whose basis is the logic of Subscription Economy, typical of entertainment realities such as Netflix and Spotify, which offers customers the ability to quickly choose and purchase the product best suited to their needs through digital marketplaces, with clear pricing, and to cancel the subscription at any time. These models are particularly effective because theyare well suited to the changing needs of customers such as an increasing propensity for instant, modular products and services that do not tie them to a particular provider but, rather, leave them free to choose whether or not to continue the insurance relationship, perhaps after an initial trial period.
These are new models that are capable of expressing their great potential in very specific and time-limited contexts, such as the need to take out a policy for the time they drive a car sharing car. These new products do not replace traditional insurance offerings but rather complement and enrich them, thus filling insurance coverage gaps left by the traditional Insurance Industry. Identifying consumers' latent needs early on and filling them is the key to the success of these new product and service models. These new proposals represent a potential win-win solution for insurance companies and policyholders: among the benefits we find a reduction in the timeframe associated with the underwriting phase and an increase in the level of transparency. However, we should not underestimate some of the critical points that may result. The increased speed in the assessment of the insured's riskiness, enabled by the large availability of data and tools capable of analyzing them and extrapolating accurate insights about the individual, will allow for greater celerity in the issuance of the policy, but, at the same time, it will prompt some reflections about the risk of discrimination and exclusion of individuals found to have higher riskiness profiles. In fact, although these models are generally identified as having the potential to extend access to insurance coverage to previously excluded categories of individuals, it is likely that increasingly accurate and predictive analysis of policyholder/insureds' data may prevent the most "vulnerable" customers from accessing such modes of coverage.