Reinventing Insurance > Fintech Love Island 3: Gamification and Robotics

Today we catch up with Fintech Couple Gamification and Robotics to see how they’re enjoying their romantic week together in the mountains of Mallorca.

Everything started a couple of weeks back, at the Fintech Love Island Villa, with our 10 Fintech Trends living it large under the Mallorcan sun. Alas, in our first-round judging, we had to wave goodbye to Mobile Wallet … to Roboadvisory, to Chatbot and VR … to P2P and API, while our two sets of finalists – AI & Blockchain and Gamification & Robotics – headed off to their respective chalets for the final round.

It would without doubt be bracing to strap on our walking boots and stride up the picturesque Montaña del Gran Armiño, where Fintech Couple Gamification and Robotics are enjoying a romantic week together in their hillside chalet. But we don’t have to.

The wonders of 24-7 TV surveillance mean that we can give our viewers all the answers that they want and need without having to set foot out of the concrete-clad security of the Fintech Love Island Studio.

Here’s a quick recap on our first set of finalists… **

Robotics is possibly our most promiscuous Trend. Whenever there’s a business process, which, ahem, needs improving, you can count on him being somewhere close by, sniffing around with that robot nose of his.

As for Gamification, well, the name says it all really. Whether we’re talking gameplay, challenges, targets or continuous mobile engagement, consumers can’t get enough of her in 2018.

** We would like to add that the construction of our Trends as heterosexual couples is for parodistic purposes only, rather than as a statement of gender norms. At buzzvault, we have a firm commitment to inclusion irrespective of gender or sexual orientation.

So, how are Gamification and Robotics getting on? Did our Fintech lovebirds hit it off – or have they laid an egg?

Day 1: The Joyous Arrival

Our Trends arrive, by helicopter, just as the sun is dipping under the crests of the mountains. Their pinewood chalet, situated on the beautiful East side of the Montaña del Gran Armiño, offers plenty of fresh air, rugged walks and great views down the valley.

Laden with baggage, the Trends walk down the gravel path from the helipad to the chalet entrance and pass through the front door.

Robotics is first into the kitchen, where he immediately and silently automates the welcome tapas out of existence, in seconds, before falling back into the catatonic state he’s inhabited for the duration of the journey.

Gamification, who was all geared up for a nice big bowl of patatas bravas, looks truly disgusted. And that’s that: she’s taking herself off to bed. Things certainly haven’t got off to the best start …

Day 2: Gamification of Auto Insurance

We join our Trends in the outdoor pool. Robotics, steeped in taciturnity, ignores – or maybe doesn’t even hear – Gamification’s increasingly blunt questions. And now she’s getting a volleyball and throwing it … but it bounces of the side of Robotics’ head.

That’s enough for Gamification, it would appear. She climbs out of the pool, dries herself down and heads off to do something more fun. And what could restore her mood more quickly and effectively than a cheeky session of Telematics for Auto insurance.

Granted, that sounds like the least fun activity ever. But this is where Gamification comes in. Indeed, this was where, way back in her salad days, she made her Fintech debut – turning auto insurance from a sector that reacts to risk into a sector that manages it proactively. So how did she do this? By making driving into a game.

Humans have a natural penchant for competition and learning through play. Give them a chance to earn a reward – either a direct reduction in their auto premium or a benefit in kind – by meeting certain driving targets, and they will make themselves better drivers than any instructor could.

Usage-Based Insurance (UBI) promises customers policies that reflect the changing, self-improving state of their driving as measured by a black box or app. This doesn’t just unlock a key point of differentiation for auto insurers – both in terms of price and in terms of customer engagement – but saves lives by raising overall standards of road safety. Not too shabby!

The UBI approach isn’t limited to Auto insurance but is also being trialled in the home with companies like Neos selling in suites of smart devices – such as leak detectors, motion sensors and smoke alarms – with home insurance policies.

However, reckless housekeeping is harder and more expensive to detect, as well as being less predictive of claim costs, than reckless driving.

Anyway, according to a study by McKinsey, UBI market penetration currently does not exceed 17% in any country, with most markets displaying negligible uptake. Adoption will be driven by further use of apps and game elements – but the UBI movement isn’t solely about Gamification, it sits at the confluence of several Fintech Trends.

As sensors get cheaper and more ubiquitous, insurers get greater access to data from IoT (IoT was down to compete in this year’s Fintech Love Island but had to withdraw last-minute due to illness). This data is the material from which insurers can fashion detailed pictures of customers’ driving and understand how different controllable parameters affect driving outcomes.

To process all this data and extract the insights buried inside it, insurers are increasingly turning to AI, who is of course one of our other finalists on Fintech Love Island (currently sojourning along with partner Blockchain on the Playa del Cangrejo Enajenado, where we’ll be headed in our next post).

Finally, it goes without saying that UBI demands a fair bit of Robotics. Driving data goes in and outcomes must come out, often in near real time, including scores, prices, incentives, recommendations and even fully-fledged driving reports. And if we want to see any of this at scale, we need to eliminate manual processes, which is Robotics’ forte.

UBI is a good example of how Gamification and Robotics can effectively complement each other. Perhaps, in spite of the tapas incident, things can still work out for our Fintech Couple …

Day 3: More Tapas

Gamification awakes early on Day 3 to find a new consignment of tapas waiting on the doorstep in a large cardboard container.

In case you’re wondering how it got there, well, it was delivered by Drones. Drones, an important Fintech Trend in his own right, unfortunately didn’t make the cut for this year’s Fintech Love Island, but we did agree that he could make a cameo appearance if he wanted to. So, to give him his due – and his 15 minutes of fame – here is a little background on the man himself.

Drones – sometimes called Unmanned Aerial Vehicles (UAV) – was born way back in 1849 when the Austrians attacked Venice with aerial balloons. And until recently much of his life had been lived in a similarly bellicose vein. But now he’s doing the hard yards in logistics and, perhaps surprisingly, insurance – as a cheaper and more accurate way to assess large claims like property damage.

Anyhow, back to the tapas. This isn’t any old tapas of course, it’s 100% sustainably sourced tapas – and doesn’t Gamification know it. With commensurate glee she sweeps it off the doorstep and bears it through into the kitchen.

As we well know, you cannot enjoy patatas bravas without a sprig of rosemary. It is for precisely these moments of need that we designed the Montaña del Gran Armiño chalet with a built-in herbarium round the back. Gamification skips gaily back out through the front door just as Robotics – more a night owl than an early bird – is sluggishly making his way from the bedroom down the staircase.

Having shuffled to the kitchen table, he begins, slowly and methodically, to prise the cardboard lid off the tapas (this is admittedly a bit of a curveball as the welcome tapas came ready-served). Gamification arrives in the doorway just in time, silhouetted against the morning splendour.

A sunbeam passes over the contents of the box (chorizo, wild mushrooms and patatas bravas are momentarily visible), Gamification makes as if to speak, brandishing her rosemary, and it’s gone.

In fact, Robotics can confirm that it went x14 times faster than the batch he automated away on Day 1. By the end of the week, he reckons he may be able to process tapas in less than 3 seconds – so Lemonade’s Claimbot Jim, who is known to enjoy his manchego, had better watch out!

Gamification is struggling to hold it together. To be deprived of eagerly anticipated patatas bravas – or chips, as we call them in the UK – once is bad enough. But twice in a single week is too much for even the hardiest of constitutions.

The mood in the chalet has sunk to a new low… Let’s see whether our Fintech Trends are able to turn things around in the second half of their week together …

Day 4: Gamification of Spending, Saving and Investments

It’s a drizzly day today on the Montaña del Gran Armiño. Robotics rocks in a wicker chair digitising old guest-book entries, which, for all his great eye for handwriting, he doesn’t actually understand. A red-eyed Gamification stares out through a steamed-up window and gently, gently weeps … No chance of any auto telematics or UBI today, from the look of the weather.

But all is not lost – Gamification has other ways to console herself.

Another part of Fintech where she’s been busy working her magic is spending, saving and investments.

Now, let it not go unsaid that there are cases where Gamification has been very bad for our financial wellbeing. Gamers nowadays are moved to spend in excess of $15 billion per year on items that don’t really exist (“virtual goods” in the ever-euphemistic parlance of accountants). And then we have those tales of addiction, depravity and ruin at the blood-soaked hands of the Candy Crush Saga.

But Gamification is making amends, using her tyrannical powers to further not spending but saving. In fact, Rob Kapito, cofounder of asset-management leviathan BlackRock, reckons Gamification is key to getting more millennials to invest.

“Millennials want to game. It’s a game society,” he says. “What we need to do is find the financial game that makes people feel comfort and safety. The winners, in my opinion, are going to be the people who have that game, have the technology, and have the brand.”

Thanks to the Open Banking Initiative in the UK, third parties can now access your banking data (with your consent of course), which creates a whole new ecosystem for gamified innovation in personal finance – including saving apps like Moneybox, Emma, Yolt, Chip, Plum and Squirrel.

Much of the success of gamification here relies not upon contriving elaborate game rules but on creating a game-like look and feel.

Take UK mobile-only Atom Bank for instance, which lets customers personalise their banking experience with a logo, name and colours of their choosing. And it’s not just new players gamifying banking. Spanish bank BBVA (also an investor in Atom) developed an online game encouraging adoption of its digital platform as early as 2013.

If only API hadn’t been sent home after the first round, she could be spending a far superior week with him, thought Gamification to herself.

Day 5: The Fishing Trip

This is the part where we molest our Fintech Couple with a totally unbearable joint activity, which in today’s case – and with the blessing of our corporate sponsor – is fishing.

As anyone who has ever clasped a rod must know, fishing is a sport designed to be as infuriating as possible. And doing it in the Cascada del Gran Armiño doesn’t make it any more enjoyable, it just makes it more Spanish.

This is a game which is as counterintuitive as anything, and involves a lot of string, maggots and getting wet. And the reward, for anyone who is willing to regress to an earlier stage of civilisation before lunch, is a small slimy fish we don’t know what to do with. Gamification, kitted out with waders and a hi-tech plastic worm, looks unimpressed.

But, for the first time in their whole week together, Robotics has emerged from his native torpor and is taking a lively interest in the angling equipment.

He’s a bit all over the place right now to be honest – he’s currently trying it out with the wrong end of the rod – but if there’s one thing we know about Robotics, it’s that he is untiring, imperturbable and learns from each and every mistake he makes.

He catches his first fish at 4.02pm – without so much as a fist pump to mark the culmination of five hours’ endeavour. His tenth fish comes in at 4.04pm and suddenly, in no time at all, we have a veritable mound, writhing and flashing silver in the late-afternoon sunshine.

Robotics reckons that, given enough practice, he can automate any routine or rules-based exercise.

For this reason, finance has always been a happy hunting ground of his, starting with the world’s first ATM (Automated Telling Machine) back in 1967. And, with corporate finance teams still spending 80% of their time manually gathering, verifying and consolidating data, it’s no surprise that Robotics continues to lick his lips at the sector – with the potential to replace 230,000 roles in finance as a whole by 2025.

Meanwhile, he’s already replaced the entire fish stock of the Cascada del Gran Armiño and lined it up in a series of neat stacks on the bank. And still he labours on, in an ever tighter, ever swifter cycle of movements.

We can only thank God that there’s no direct access to the ocean here, or we’d have a problem on our hands.

Day 6: Gamification of Health Insurance and Wellness

When she opens the bedroom window, Gamification is almost knocked over by the smell of putrefying fish emanating from the bank of the adjacent and now barren Cascada del Gran Armiño.

She glowers at the still-sleeping Robotics and makes her way downstairs. The foetor has invaded the kitchen too (Spanish for draft-excluder, anyone?), and soon Gamification feels rather unwell. Very unwell. Actually, closer to death than when she was officially pronounced dead on TechCrunch back in 2014.

But every cloud – even a cloud of fishy putrefaction – has a silver lining. For from all these thoughts of unwellness it is but a small step to thoughts of wellness. And this is precisely the track Gamification’s mind has gone down. The wellness industry is where, after all, she has done some of her most satisfying work.

While drinking games are responsible for approximately 113 million deaths a year, there is mounting evidence that games can also make us live longer, or at least more healthily – and change our whole approach towards health insurance to boot.

Take Vitality for instance. Rather than having to sink a pint every time someone starts a sentence with a conjunction, all you’ve got to get through is a weekly “handcrafted” drink from Starbucks if, by some horrid mischance, you complete a certain number of steps.

If you’ve ever played arcade games, you’ll be used to seeing your avatar’s stats flashed up on the screen at the end of a level – distance traveled, points gathered, skills unlocked etc. Now, thanks to wearable-supported insurance programmes like those pioneered by the likes of Vitality, our corporeal selves can get in on the action too.

Vitality’s well-caffeinated members can theoretically get themselves an Apple Watch for free, and US health insurer Aetna has been in discussions with Apple about integrating smart watches into its programmes as well. Which is all great news for the gamification of health insurance.

However, some have questioned the relevance of commonly captured stats – like steps taken – to our overall health picture. Then, there remain actuarial question marks as well: do the demonstrated benefits of wearable programmes represent a genuine improvement in members’ health, which could be replicated across society, or a pesky self-selection effect?

We’re likely to see a move away from a brittle reliance on single measures towards a more holistic view of customer wellness. Health targets and recommendations will draw on a larger range of data points and an individual’s unique circumstances, rather than the Tyranny of Steps. And, just as was the case with Auto Insurance in our previous post, this data-in, data-out engine of personalisation will only work at scale with a healthy dose of … Robotics.

Societal boon or marketing gimmick, gamified health insurance is here to stay and will be helped along by the massive growth in wearable tech covering pretty much any health parameter you care to name.

According to Market Research firm CCS Insight, 2020 will see the sale of 411 million smart wearable devices – representing $34 billion in sales and thousands more joggers coming to a pavement near you.

Day 7: The Fake Party

No edition of Love Island – be it with tangerine-coloured celebrities, tangerine-coloured members of the public or our very own tangerine-coloured Fintech Trends – would be complete without our contestants pretending to have a party on the last night, in broad daylight, without so much as a J2O to be seen.

As our Trends boogie for the camera with dead eyes and deader hearts, now is the perfect time to reflect on the week that was.

So, what did we glean? Do Gamification and Robotics make each other whole? Are they more together than the sum of their individual parts?

It’s clear that Gamification needs Robotics in order to scale – whether we’re talking auto telematics, saving & investment apps or health insurance, he’s been there facilitating in the background, somewhere, and we don’t want to rain on any of these parades with too many manual processes.

However, Gamification is a busy lady with a whole host of suitors, including for starters AI, IoT and API. In fact, she’s been secretly texting API about Open Banking all week.

On the other side of the table we have Robotics. How shall we put this? He’s not really an ideas sort of guy, and he doesn’t seem to care a great deal about anything, let alone his romantic partner. He could just as easily couple up with a nice Chatbot or make himself at home with a Mobile Wallet as stick with Gamification.

As long as there are manual or rule-based processes to automate away, he’s content to sit soundlessly in the corner minding his own deeply disturbing and uncanny business.

Taking all these factors into account, we’re giving this Fintech couple a 5/10 rating. Join us for our next post, where we lift the lid on our other pair of finalists, Blockchain & AI, over on the Playa del Cangrejo Enajenado.

Have they enjoyed their getaway together more than today’s couple? And which one will wear the Fintech Love Island crown? Stay tuned!

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