I work closely with a broad range of insurance industry players, from established firms to newly-formed InsurTechs. And while everyone has a unique approach to business, all seem to agree that customer expectations are evolving faster than ever.
Customers today expect hyper-personalized offerings and a seamless omnichannel experience. In our connected world, people stay informed 24/7 thanks to their use of more and more digital devices. The digital gap across generations is narrowing and will likely shrink further as health crisis lockdowns and work-from-home scenarios force our reliance on a superior digital experience.
BigTechs raise the bar
This Black Friday was the first in history when the online shopping revenue outperformed in-person shopping. COVID certainly has something to do with that, but when I say tech giants don’t merely meet expectations – they often redefine CX standards. Innovative capabilities, ecosystems that promote and then lock customers into new services, and operational agility form the BigTech backbone, which leads to real-time responses, resilient processes, and top-notch digital experience for end users.
There’s no going back. Consumers like their BigTech experiences and now expect similar ease of use and personalization with all industries they interact with ‒ including insurance. What’s more, consumers have begun to trust BigTechs with handling their insurance coverage.
According to the World InsurTech Report 2020, customer willingness to purchase insurance from BigTechs grew to 44% in 2020, up from 17% in 2016.
Policyholders are increasingly willing to buy insurance from BigTechs
BigTechs are betting big on insurance
Tech giants have been offering warranties and product protection for a long time. For example, Amazon Protect offers coverage against accidental damage, breakdown, and theft of Amazon purchases, and Apple device users can purchase extra warranty coverage with AppleCare.
Recently, I have seen BigTechs focus even more on the insurance space. Google has been actively investing in insurance providers and InsurTechs, such as Collective Health, Oscar Health, and Clover Health. Amazon secured a license to sell third-party insurance products in India, partnering with Mumbai-based startup, Acko Insurance.
On the other hand, both traditional insurance firms and InsurTechs appear to agree that BigTechs can provide a better digital experience than they do. Of incumbent and InsurTech executives surveyed as part of the World InsurTech Report 2020, more than 85% said BigTechs more effectively provide digital experience. And, recognizing this digital capability, more than 60% expressed willingness to partner with tech giants.
We also see insurers leveraging BigTechs’ advanced solutions to transform policyholders’ digital experience. How? By integrating BigTechs’ existing products into the insurance value chain to enhance operational efficiency or provide superior CX.
- Mumbai-based HDFC Life plans to take advantage of Amazon’s Alexa to offer policy service. Powered by natural language processing, the Alexa chatbot Elsa will offer HDFC customers intelligent services such as handling dynamic requests and offering coverage details. Elsa is programmed to answer more than 200 different questions.
- UK insurer Brit and Google are collaborating for the 2021 launch of Ki, a digital, algorithmically-driven Lloyd’s of London syndicate ‒ accessible anywhere and anytime. Powered by the cloud, Ki will offer enterprise-grade solutions that enable rapid transformation at scale. The collaboration, which aims to redefine the commercial insurance market, combines Brit’s underwriting performance and Google’s technology expertise.
The way forward for the insurance industry players
It is high time for established insurers to acquire a BigTech mindset to provide hyper-personalized and seamless services to customers across touchpoints. As business dynamics change quickly, insurers cannot afford to play customer experience catch-up. Now is the time to lead to ensure success. Collaboration with technologically advanced and digitally agile InsurTech firms and BigTechs is critical for incumbents during today’s uncertain times when in-house innovation experimentation may not be feasible.
For more insights about policyholders’ dynamic expectations and how traditional insurance firms and InsurTechs can deliver, download a free copy of the World InsurTech Report 2020. It explores ways to acquire critical future-proofing capabilities to take on today’s unique challenges. It also offers insights into potential trade-offs industry players must weigh before venturing into collaborative partnerships within the new sharing economy. Interested in exchanging ideas? I encourage you to connect with me on social media.