The insurer of the future: From payer to partner and preventer

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Strategies tied to the 3P (Payer, Partner, and Preventer) model will have a positive impact on policyholder experience as well as insurers’ profitability.

Today’s insurance industry faces a changing economic landscape and rapidly evolving technologies. The insurance customer base is also evolving and expects products and services that add value as well as a seamless and integrated experience across channels.

More and more policyholders are willing to share supplemental data and pay extra for better service from their insurers. Of the individual customers interviewed as part of the World Insurance Report (WIR) 2019, 28% said they were highly amenable to sharing additional data for personalized risk control and prevention services. It is interesting to note that around 15% said they were even willing to pay an additional fee for such services. Globally, 58% of customers said they are interested in new insurance models.

In addition to risk control and prevention services, customers are interested in personalized value-added services. Nearly 54% of tech-savvy customers interviewed as part of the WIR 2019, said they would remain with an insurer that offered personalized value-added services.

Insurers are considering ways to transform their operating models and products to align with evolving customer demands. Advanced technology solutions can enable new capabilities to help insurers manage today’s dynamic risk environment by building deep customer focus and intelligent risk-assessment processes.

Relevancy and future success will require a more holistic risk management style. Insurers will continue to act as payers that cover policyholders’ financial losses, but will also work as partners and preventers that identify, forecast, and mitigate risk in customers’ daily lives. (Figure 1)

Figure 1: Payer, Partner, Preventer (3P) insurance model

Payer, Partner, Preventer (3P) insurance model

Source: World Insurance Report 2019.

Partner and preventer roles will improve customer centricity while helping insurers sustain profitability through efficient operations and new revenue generation.

It is no surprise that so many insurers have embraced emerging technologies and smart equipment to collect data from customers, or that advanced data science concepts are being employed to more accurately assess the risk exposure of customers and to develop innovative ways to reduce risk exposure. (Figure 2)

Figure 2: The 3P model in action

The 3P model in action

These examples are just a few of the device-based and app-based protection services that exist today. Very often these services are offered under the umbrella of one or more benefits. (Figure 3)

  1. Rewards: Non-insurance related perks such as gift cards or reward points
  2. Discounts: Either on the insurance premium or a third-party product
  3. Value add: Value-added services that provide policyholder protection services while reducing claim frequency or intensity

Figure 3: Classification of benefits

The insurer of the future: From payer to partner and preventer

However, many insurers are not leveraging available technology to improve their business models. Only 51% of insurers surveyed as part of the WIR 2019 said they have technology partners for protection services, and only 45% of insurers said they employ real-time monitoring. Moreover, only 20% of insurers said they use IoT for real-time insight generation. However, 74% said they could control risk and provide preventive steps through tips and safety advice.

When scaled up, the IoT applications listed below can provide numerous partner and preventer opportunities for insurers.

The insurer of the future: From payer to partner and preventer

More and more insurance products are being redefined to reduce risks in customers’ lives – versus only offering coverage – to enable a new level of customer centricity. Strategies tied to the 3P model heighten policyholder experience as well as insurers’ access to new markets to boost business and add revenue streams. Risk control and prevention will drive down claim incidents and lower claim costs to fortify insurer profitability.

For details about customer experience, product innovation, and experience design, click here to download a copy of the World Insurance Report 2019.

 

 

[1] Nations Well, “A TECHNOLOGICAL SOLUTION TO TEXTING WHILE DRIVING,” Courtney Subramanian, September 18, 2014, http://nationswell.com/katasi-technology-curb-texting-while-driving.

[2] American Family, “HOME PROTECTION WITH RING VIDEO DOORBELL,” https://www.amfam.com/insurance/home/smart-home/ring.

[3] Assurant, “ASSURANT INVESTS IN MOJIO TO EXPLORE DIGITAL PROTECTION AND SUPPORT SOLUTIONS FOR VEHICLE OWNERS AND PARTNERS,” September 18, 2018, https://www.assurant.com/newsroom-detail/NewsReleases/2018/September/assurant-invests-in-mojio-to-explore-digital-protection-and-support-solutions-for-vehicle-owners-and-partners.

[4] HomeServe, “AVIVA PARTNERS WITH HOMESERVE TO LAUNCH HOME ASSISTANE COVER,” John Greaves, February 13, 2017, https://newsroom.homeserve.com/media-centre/press-releases/2017/february/aviva-partners-with-homeserve-to-launch-home-assistance-cover.

[5] Rude Bagette, “REDUCE YOUR HEALTH INSURANCE BILL BY TRACKING STEPS WITH WEARABLES,” Liam Boogar, June 2, 2014, https://www.rudebaguette.com/2014/06/reduce-health-insurance-bill-tracking-steps-wearables/?lang=en.

[6] CB Insights,”HOW MAJOR INSURERS ARE TEAMING UP WITH INTERNET OF THINGS COMPANIES,” December 7, 2015, https://www.cbinsights.com/research/insurance-tech-iot-partnerships/.

[7] Market Screener, “EVERQUOTE: LAUNCHES SAFE DRIVING INSURANCE OFFERS FOR EVERDRIVE APP USERS” September 7, 2018, https://www.marketscreener.com/EVERQUOTE-INC-44420342/news/EverQuote-Launches-Safe-Driving-Insurance-Offers-for-EverDrive-App-Users-27224981/.

[8]John Hancock, “GET YOUR APPLE WATCH WITH JOHN HANCOCK VITALITY,” https://www.johnhancockinsurance.com/vitality-program/apple-watch.html.

[9] Forbes, “OSCAR HEALTH USING MISFIT WEARABLES  TO REWARD FIT CUSTOMERS,” Steven Bertoni, December 8, 2014, https://www.forbes.com/sites/stevenbertoni/2014/12/08/oscar-health-using-misfit-wearables-to-reward-fit-customers/#57c43d7c93c5.

[10] O2 Insurance, “PROTECT YOUR CAR WITH O2,” https://www.o2.co.uk/shop/services/drive#1

[11] The Balance, “PROGRESSIVE SNAPSHOT REVIEW,” Janet Hunt, September 30, 2018, https://www.thebalance.com/progressive-snapshot-review-4141266.

[12] Insurance Journal, “TRAVELERS PARTNERS WITH CONTRACTOR, TECH FIRM ON WEARABLES FOR CONSTRUCTION SAFETY,” November 16, 2018 https://www.insurancejournal.com/news/national/2018/11/16/507557.htm.

[13] Internet of Business, “ZURICH INSURANCE PARTNERS WITH IOT START-UP FOR SMART HOME SECURITY,” August 2, 2016, https://internetofbusiness.com/zurich-partners-iot-start.

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