The insurance industry is undergoing a transformational shift as consumers increasingly prefer to engage through digital channels. The World Insurance Report 2020 established what many of us are seeing among our friends and family. Today’s consumers are digital ‒ irrespective of age or generation. And they are not shy about demanding convenient, fast, and personalized products and services ‒ including insurance.
Moreover, a Capgemini Research Institute study reveals that pandemic conditions have shaken just about everyone’s sense of security and, as a result, interest in insurance is on the rise. Since the onset of pandemic, consumers are more likely to contact insurers with questions about existing coverage and policies.
More consumers seek peace of mind through additional insurance coverage
From lockdowns and closures to shortages, layoffs, and remote work, 2020 turned market dynamics upside down, forcing insurers to quickly evaluate and reinvent business processes. And that’s just the beginning. New players – InsurTechs, BigTechs, and retail and OEM players, including Walmart and Tesla – are making their presence known and keeping incumbent insurers on high alert.
Frankly, I don’t believe new players pose an insurmountable competitive threat. Instead, think about opportunities to collaborate or partner with these disruptive thinkers to power up your firm’s innovative pace.
Strategic partnerships with InsurTech firms offer incumbents a product development fast track and the means to achieve speed-to-market with nominal investment. The capability to design appealing customer-centric products requires fresh thinking and cross-industry innovation.
For example, Chinese insurance titan Ping An used technology extensively to innovate its business model ‒ revamping everything from sales to risk control and operations. The firm’s technology-powered ecosystems target consumers, businesses, and governments.
After years of operation, incumbent insurers have accumulated a vast treasure trove of customer data. What’s more, policyholders are increasingly willing to share their personal information ‒ from alternative data sources such as IoT devices, social media, and mobile apps ‒ if it gains them value-added services.
Partnership with tech players can help insurers to build artificial intelligence and advanced data analytics capabilities to generate business insights from customer data.
Quick and real-time data assessment can help insurers nail down customer preferences during a time when policyholder must-haves are evolving faster than ever. An experience-led engagement strategy can help, too, when it comes to suggesting customized policy offerings at times individuals are most likely to buy. A critical element? Communication via a customer’s preferred channel of interaction.
Incumbents’ not-so-secret weapon is a robust network of agents and brokers with tried and true sales processes. However, as digital connectivity adoption grows, insurers are developing digital delivery systems that augment existing distribution and sales channels and free up agents for more complex activities. Forward-looking insurers are partnering with tech specialists to build digital customer support tools using cognitive automation, which recognizes an individual’s emotions and sense of urgency to provide human-like support.
More and more, I see traditional business lines blurring as incumbents launch fully digital subsidiaries and new players extend their insurance product and service portfolios.
No firm needs to go it alone and unilaterally face tomorrow’s uncertainties. Mutually-respectful collaboration between incumbents and digitally-agile specialists enables dynamic business synergies to pave the way for future-proof insurance business models.
The World InsurTech Report 2020 unpacks some of the most critical competencies insurers will need and how and when to acquire them. Download your copy to learn what it takes to meet today’s most urgent business needs. And feel free to connect with me on social media to take this discussion forward.