"Facebook is an ecosystem with a trust level of one (very low).  Posting a picture of my last meal is a transaction with a trust level of one as well.Amazon is an ecosystem with a trust level of two. Buying retail stuff is usually a transaction with a trust level of two.A money transfer is based on trust level four (very high).  Insurers are usually ecosystems of trust level three or four (P&C versus Life)" 

MOBINAUTEN Delivery Thinking Feb 21 2018

Trust Levels are important but Insurers have to maintain that trust level differentiation and the likes of Amazon are increasing Trust levels. They already offer specific insurance and finance products. Half of customers are willing to use Amazon for auto insurance which is a threat.

Another cloud on the horizon- Selling 100 million policies a day in China-Zhong An demonstrates clearly the growth potential of Micro Insurance- something that Amazon will hardly ignore.

More so the sheer breadth and depth of data Amazon and other digital giants can access and analyse. Data is the key to fututre success and too much of an insurer's data in currently inaccessible- some say as much as 90%!

It is no good saying that external data sources will be sufficient to price risk and match customer needs with optimal macro and micro insurance products. Amazon, Google, Apple and others have equal access and better data analytics capabilities. One strength incumbent insurers hold is the existing data they have on customers which can be combined with external sources

The BUT?

They generally cannot access it as it is unstructured and in data silos inherited with multiple mergers ans acquisitions. The only answer is to: - 

  1. Unlock the value in that data
  2. Combine it with external data sources
  3. Analyse the "Big Data" picture
  4.  Deploy a digital platform that maintains a single digital record

Single Digital Record - SDR

The organisation needs this SDR for;- 

  • Every customer
  • Each Macro and Micro product bought and/or considered
  • Every claim made by the customer

 WHY? To manage customer and user experience to "out-Amazon" Amazon. 

Do that and there is potentially no need for panic. Put it off and it is time to hit the panic button.