Fraud Prevention at an Insurtech – Putting the V in MVP
Written by Michael Connolly
This is the second in this series of articles about fighting fraud in the digital age. I’d recommend catching up with the first here before reading this.
In the insurtech world, a concept you hear a lot is that of the MVP (Minimum Viable Product).
This was a new one on me when I started. The concept is taken from the book, the Lean Start-Up, by Eric Reis.
The thrust of it is you get the most minimal viable product to market as quickly as possible being quite brutal with the term minimum. You then use a build/measure feedback loop iterating as you go, listening to your customers in a data-led fashion so that they dictate the evolution of the product.
It is very interesting blending the counter fraud considerations into this mix. I find the dynamic like that of a lobbyist, there is a natural conflict and challenge when considering the priorities of speed and change of a new product and building in fraud prevention. It really does make you look at things in the context of everything else and carefully consider where items should be on the roadmap of the entire product. I believe this dynamic of making tough choices gives an edge over more established companies who often do things because that’s the way its always been done with little examination of the continued relevance.
There are a couple of nuances I have found in the insurtech space to those examples given in the Lean Start-Up book. Most products have an immediacy. If you’re normally selling a product online it either sells or it doesn’t. And any efforts you make to improve sales are also immediate and measurable.
Balancing growth thinking and underwriting profit
The INSHUR app has an immediacy and works in the normal method. The viability of an insurance product, however, develops over time, so it must be constantly monitored and adjusted along the way as the loss ratio matures.
Being an MGA also adds an additional layer of complexity and opportunity. As, in effect, we have two customers. The customer and the carrier. Our customers want low prices, convenience and speed. Our carrier partner wants a good loss ratio.
I believe it is in the management of this conflict where we derive our success. Allowing the gravitational pull of our customers’ opposing desires to guide the product and inform pricing, without losing sight of the fact that we need to write profitable business. And this is where we excel, blending real-time, data-led insights we can meet the needs of both stakeholders.
I believe this was what Mr Ries intended with an insurtech skew and it keeps the V in MVP.
I’d love to hear your thoughts on how you’ve used MVP methodologies work, and you can find out more about the work we’re doing at INSHUR here.