Technology is changing the kind of experience customers want from insurers and opening up a new front in the competition for customers. How can insurers keep themselves relevant for their customers and avoid being relegated to just manufacturing insurance products?
Framework for innovation
There are four key steps insurers could take to transform their customers’ experience –some insurers are doing some of these.
- Keep listening to the voice of the customer; track the innovations they adopt in other markets e.g. retail and plan how to do the same
- Embrace experimentation; adopt continual innovation in small steps and accept failure as a way of learning optimal solutions for customers
- Embrace collaboration with insurtech; in a build or buy decision could be better to deploy faster by partnering e.g. Legal & General and Slice for Homeshare Insurance
- Think talent as well as technology; insurers are risk averse and analogue in nature; recruit digital expertise from outside industry and take a punt.
This framework for innovation can only be implemented on a digital platform that enables constant experimentation i.e. business team can change processes and workflow without recourse to vendor's dev team or consultants.
And a platform for all perils and markets that does not require you to change today's core systems. You do not have the tome or money for that. To action this innovation framework you need to be able to deploy on eight to ten weeks and not face upfront integration costs or big ticket licensing.
Given the advantages that online retail and social media platforms have in customer engagement, they may consider providing insurance to their users in the future given the added revenue stream. There are, of course, regulatory hurdles to overcome before such platforms could manufacture insurance products. But, in the short term, these online platforms could take hold of customer interactions, become a new insurance or financial services hub and absorb key elements of the value chain. This could relegate insurers to just manufacturing insurance, reducing margins substantially. How can insurers fight back or is it too late?