(Image credit: Slon Pics.)
“It was the best of times, it was the worst of times.”
The introduction from Charles Dickens’ “A Tale of Two Cities” may be an apt description of today’s property insurance landscape. While numerous opportunities exist, insurers face a variety of challenges—some often unforeseen.
What are they up against?
- Weather-related loss incidents are increasing in both frequency and severity thanks to changing global climate conditions that spark difficult-to-contain wildfires and significant rain/storms/flooding.
- COVID-19 flashed a bright light on coverage gaps and the need for new, more innovative, and flexible insurance offerings.
- Cybersecurity threats have become commonplace – compromising carriers and the individuals and businesses they insure.
- Insurers have been forced to raise annual premiums – leading personal and commercial policyholders to expect excellent service above and beyond the coverage.
These challenges may translate to the worst of the times for firms unwilling or unprepared to adapt their business and operating models to suit today’s fast-shifting business dynamics. Conversely, these may be the best of times for innovative-minded carriers ready to embrace change and the opportunities with it enthusiastically.
The reference to innovative thinking isn’t simply about new product development or adopting new technologies. Instead, it’s about identifying gaps in existing business processes, enhancing efficiency and effectiveness, identifying gaps in customer risk needs and expectations, and simplifying the business of insurance to benefit policyholders and insurers.
Inventive Insurers focus from the outside in on the customer – their needs, expectations, and experience. They embrace an ecosystem of partners, who provide new reach, value-added services, and innovative capabilities. They prioritize unlocking the true potential of data and embrace open architecture to collaborate with ecosystem partners seamlessly. These inventive innovators respond agilely to challenges and thrive during uncertainty, such as in today’s market.
Being a truly customer-centric organization
These days, customers want more than just protection through an insurance product. In today’s new world, customers view the product as a combination of the risk product, value-added services, and customer experience. They expect insurers to help them detect and prevent loss incidents through value-added services and capabilities, thereby avoiding traumatic scenarios. They seek empathic carriers who help them manage their lives across a broader array of related areas. A next-gen, customer-centric firm prioritizes customer-facing applications and protocols that redefine the experience to create a holistic experience across not only the value chain but with ecosystem partners who bring value to the relationship.
Exploiting the true potential of data
Data is an important leg of the customer-centricity journey. It is the oil that runs the insurance machinery. To drive and derive meaningful insights from data, the oil must flow smoothly across all components.
Today, access to real-time data sources helps insurers assess risk more accurately, which drives improved profitability. IoT devices, high-quality visual data imagery and geospatial data, artificial intelligence (AI), and machine learning (ML) techniques can enable property insurers to improve existing business and operating models.
Underpinning both the data and next-gen core and other technologies is the cloud infrastructure. The ability to handle and process large volumes of data, AI and ML-based advanced visualization tools, advanced predictive analysis, all integrated with next-gen core systems, demands a cloud infrastructure for speed, security, and scale.
Seamlessly collaborating with ecosystem partners
Insurers must also embrace an ecosystem of partners—partners that provide new data sources, new capabilities, market reach, and value-added services. With the breadth and velocity of change in technologies, customer risk needs, and engagement expectations, it is nearly impossible for any insurer to possess, nor afford the acquisition of, the resources and capabilities needed to keep up with the changes, let alone anticipate and stay ahead of them.
A next-gen, platform-based insurance business model that leverages platform technologies and a digital ecosystem of diverse third-party partner services completely removes this barrier. Digital ecosystems offer constant touchpoints with customers in simple ways by plugging into capabilities that enable cost-effective growth while bringing insurance coverage closer and more personalized to the customer.
Today’s changes require insurers to gain clarity on how to succeed in the future of insurance. Future market leadership and success will be defined by a new digital foundation and business model that embraces customer, technology, and market boundary changes with vision, energy, and speed. Next-gen core, digital, data, and ecosystems offer opportunities for insurers to sell digitally, provide touchless services, and adopt next-gen underwriting with enhanced pricing accuracy.
If leveraged with an Inventive Insurer mindset, property insurance can transform to deliver innovative products, business models, processes, channels, and experiences—outside the mainstream—with overall superior CX. Inventive insurers may reach the ideal where insurance is not just sold but eagerly purchased.
Incumbents that adapt an inventive insurer mindset are poised for the best of times.
To continue this conversation, connect with Seth on LinkedIn and Denise on LinkedIn or Twitter. For more information about the Capgemini and Majesco partnership, visit our resource hub.
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