Slice Labs is becoming pivotal to the story of technology and disruption in the insurance industry.

The New York City-based startup topped InsurTech headlines in recent months with its high-dollar capital campaign, major insurer partnerships, and ultimately the U.S. launch of on-demand policies tailored to such sharing economy insurance consumers as Uber drivers and Airbnb hosts.

Here, company CEO and co-founder Tim Attia talks with PC360 about the coverage gap that Slice is looking to fill, and how the company aspires to scale their product beyond the internet's market niches.

This interview has been edited and condensed for clarity.

PC360: In your view, what's the lay of the land in the insurance industry, and where does Slice fit into that landscape?

Attia (pictured at right): On the X axis, there's the new way of doing insurance… So you have startups doing things in a new way from the incumbents. Then there's the old way, where you fill out a 20-page form, sign it, send it in, underwrite a fleet of cars with a blanket policy from a broker, that type of thing. On the other axis, the Y axis, we break it down from top to bottom for the new economy. For us, the new economy is the sharing economy where people are doing part-time jobs or not working for the firm anymore…

JP Morgan Chase did a study last year to get to know everybody's salaries. There were four (groups) they looked at where people's salaries varied up to 30% from month to month. This means people are making money in non-traditional ways. The McKinsey Institute also did a bunch of studies last year showing 20% to 30% of all workers in the EU and U.S. are making money in this way. We call this the new economy.

So the lay of the land is that we're trying to do insurance in a new way. We're trying to simplify it, take out all the friction, make it a lot easier, remove a lot of the fat and the waste and the cost, but also focus on the new economy…

A lot of people are coming up with new ways of doing insurance, but they're [using] a standard homeowners' or renters' policy. So they're not addressing a new risk. We wanted to address a new risk… We wanted to focus on this on-demand worker, people who are using a personal asset — their home, their auto — to make money. In the new economy, you have someone using a personal auto like a business. So you're in this situation where the property side is personal, but the liability side is commercial, and that's new.

Our view was, the only way to get there was to re-think insurance. We couldn't rely on any existing system or process. So we designed a new policy form. We came up with a new set of underwriting and pricing. And we don't have an insurance application at all.

PC360: What processes take the place of a traditional policy application?

Attia: Take our home insurance policy. Someone goes online, and they have to register with an email address. We ask them for their [property] address, and they register with their address. Then we come back with a quote. We have all the data we need. We know the property's construction type, roof type, projection costs. We know the size of the property. We've gathered everything. We just don't ask you to tell it to us in an application and sign at the bottom. We think the application is really just a tool that agents use to get facetime with people. But if you can accurately get all the information and data for the quote, the application is just not needed.

Graphic is from “Paychecks, Paydays, and the Online Platform Economy: Big Data on Income Volatility,” published in 2016 by The JPMorgan Chase Institute.

Continue on…

Slice marketed its on-demand products to people like Lavinia Osbourne, who rents out home-office space in her London residence through Spacehop.com, by appealing to their sense of community. (Photo: AP Images)

PC360: How is the messaging different for your audience than it might be for the traditional, mainstream, incumbent insurance consumer? Does the new economy require new marketing and communications?

Attia: We knew it would be hard to get to the consumer. So we're doing a couple of things. Our hypothesis is, people in the on-demand economy act like a community. They went to the Airbnb meetups, they have open Facebook pages, and they see themselves as a community. They all read the same websites and blogs. Many of them work with vacation management companies. There are a lot of interesting aggregation points when you target a community.

In the early days, I flew into a city like Denver, and went to a pub downtown where a whole bunch of Airbnb Superhosts were meeting up, and we sat there in our jeans, bought them beer and told them about insurance policies. I remember one day, we were at an Airbnb meetup during rush hour, and there was a snowstorm outside. Still, this woman came running in saying: “Is this the place where I can get insurance?” That's when we really knew we were on to something.

Now, you can't become GEICO or Progressive on community alone, but it's a great way to start.

Then we were kind-of stuck. We thought, “How are we going to scale this?”

We are in an insurance distribution gap. So we thought some large direct writers would be interested in distributing our product, because they know people are using their home policy to rent or be on Airbnb, or driving for Uber on their personal auto policy.

PC360: Given your take on the new economy, what thoughts do you have for independent insurance agents?

Attia: Distribution is owned by a lot of people including independent agents. Right now, in the distribution puzzle, it's very, very difficult. If I were an independent agency, I would try to bring in as many younger people as possible and try to make a big environment attractive to the younger generation, because they're going to be in a better position to figure out how their peers are going to buy. If they want to take a step ahead, they have to remember that technology is in front of people all the time.

I would try to attract the next generation, if you ever want to figure out where to (sell to) their friends. I haven't seen anybody come up with a magic wand for distribution. I know that direct writers are doing very well, but they're also spending well over a billion dollars on advertising.

PC360: So many people who rely on technology for business are still reeling from the reach of the WannaCry virus. How serious is the threat of malware and ransomware to a company like Slice?

Attia: It is interesting, because all of these tech-enabled startups have basically decided to put an insurance company in the cloud. The things that can happen to you are not the same things that can happen when you have a physical data center. I mean, they can still happen to you there, but there are more things that can happen [in the cloud]. Nobody is going to come and change all the locks on your doors and lock you out of a physical data center. But in the online world, they can just lock you out. They can just change all the locks on you, and that's pretty scary.

There's a whole bunch of stuff you have to do to take it seriously. But I guess the first rule of security is, don't talk about your security.

What's on the horizon for P&C insurers in 2017?

Special Reports /

Any way you &lsquo;Slice&rsquo; it: New economy, new insurance products

Related Stories

Recommended For You

Any way you ‘Slice’ it: New economy, new insurance products