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The insurance industry is going through digital transformation and it2 needs to leverage the latest technologies to cater to the new age customer who is at once tech-savvy and demanding. To stay relevant, the industry will need to incorporate three major industry shifts:
- Applied Intelligence
- The New Normal of Consumerism
- Transformation of Insurance Products
Applied Intelligence
Most insurers have embraced the value of data and the business benefits it delivers. Sensors, smart devices and third-party industry data sources have made it easier to monitor risks. For example, telematics, monitoring of driving habits and patterns, and commercial properties have made risk prevention easier.
Applied Intelligence combines the power of analytics, AI and automation to enhance outcomes for data-driven Insurers. This is done by automating the actions required to utilize the key Insights produced by analytical models, driving autonomous decisions.
However, applications of these capabilities are still in nascent stages. The success of Applied Intelligence thus significantly depends on how focused your approach is for specific business outcomes. Applied intelligence will play a big role in making next big things such as autonomous cars, connected homes etc. mainstream in our lives.
The new normal of consumerism
Consumerism is all about keeping your customer at the center of your product design and building lasting relationships. Brands like Uber have changed the paradigms of the consumer game by consistently staying on top of customer needs and personalizing services on the fly.
In the insurance industry, typically there is negativity around connecting with customers—renewals are expensive, accidents are not exactly the best time to deal with them either. However, staying in touch with customers is important for the insurance industry, in order to maintain relationship and to understand their needs.
Home Inventory by American Family Insurance is a great example of an innovative way to connect with customers. It helps policy holders store actual images of all things insured. This way they don’t need to worry about the claim payout list in case of some loss. Another example is a wellness/ health checkup reminder app for insurance customers from Cigna. The Mygbclaim app from Gallagher Bassett lets injured workers manage their claim anytime, anywhere from their smartphone. MetLife’s Infinity App allows customers to store the memories of various events by building a photo album.
Thus, increasing positive touchpoints with customers outside of traditional interactions has helped several insurers achieve better customer engagement.
Starting from taking a Quote to getting policy issued during sales process, how am I utilizing my coverages and premium paid while my policy is in-force, how my driving habits and usage patterns are impacting my cost of insurance on regular basis, when I am need to open a claim—how my claim is getting moved from first notice to next stages in the process of getting my car/ property restored and all this without the need for the customer to take additional efforts such as calling or emailing someone. It will be interesting to see how the insurance industry responds to this new era of consumerism.
Transformation of insurance products
Traditionally, insurance customers have been able to pick the services they require only from an inflexible menu card, which means that they might have to visit multiple insurers to cover all their needs. The next generation insurance services will offer customized products and services as per customer requirements, so they don’t have to run to multiple providers.
Another key development is the evaluation of InsureTech, which have taken early movers advantage, e.g., telematics, connected Homes, wellness or health monitoring etc. These providers eventually build a sea of data from IoT sensors, wearable or other customer engagements and will have significant knowledge of risk associated with every customer and would be in better position to issue customized Insurance coverage to these customer (independent or in collaboration with a primary Insurer).
Product transformation will bring in the next wave of disruption for the insurance business and is expected to take consumerism to the next level. Many insurance firms are already providing such value-added services to their customers, and some have even partnered with third-party ancillary services providers for building additional capabilities.