Friendsurance: Challenging the Business Model of a Social Insurance Startup — A Case Study

by Michael Fitzgerald, March 16, 2015
Case Studies
Global

Abstract

How does a disruptive insurance proposition survive its startup phase and thrive?

Friendsurance is a five-year-old insurance broker which combines social technology with traditional insurance products to create networking effects that lower costs and deliver value. This case study details the initial proposition of Friendsurance and explains four subsequent adjustments made to enhance the proposition.

“The experience of Friendsurance illustrates how both disruptive and incremental innovations combine to sustain a new proposition,” says Mike Fitzgerald, senior analyst with Celent’s Insurance practice and author of the report. “Any financial services firm that wishes to launch a disruptive proposition can learn from their experience.”

The report details how the company has repeatedly challenged its initial assumptions about the business which led to material changes to the operation. Over two years, Friendsurance grew the number of participating insurers by a factor of 10 and is now sustaining a monthly customer growth figure of 20%.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

 

Key Research Questions

1

Introduction

3

 

Key Research Questions

3

The Proposition

4

 

The Initial Idea

4

 

The Market

4

Friendsurance (Version 1.0)

5

 

Realigning Incentives

5

 

Version 1.0: How It Worked

6

 

Why It Works

8

 

Early Results

11

Friendsurance (Version 2.0+)

12

Conclusion

15

Leveraging Celent’s Expertise

16

 

Support for Financial Institutions

16

 

Support for Vendors

16

Related Celent Research

17

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