Digital storm clouds swirl around carriers portending upheaval and change: 

1. Insurers beset by slow growth and high churn
2. Customers trust primary insurers but switching
3. Insurers in danger of losing control of the customer interface

Despite increased take-up by rising middle classes in emerging markets, global premiums grew in real terms by only 1.3% annually over the period, to $5.2trn. The world economy managed twice that."

The Economist June 19th, 2019

Bain & Company (link to article below) investigates how incumbents can fight back and highlights the dangers that may dash them on the rocks of disruption.

Let's go back to those challenges facing storm battered insurers.

Comparison websites encourage churn and the more policyholders trust that interface the more they start the insurance journey outside the primary insurer. 

Danger One- the data collected by Go Compare and other aggregators is owned by them. Insurers loose insights on customers. They are in danger of becoming less relevant  to consumers.

Then analyse the trend of policy holders to switch even though they trust primary insurers. Who to?

Danger Two: Switching to?

1. Insurtechs- full stack digital insurers
2. Big Tech- Amazon, FB, Apple, the Chinese giants
3. Embedded insurance- Tesla, Amazon, IKEA
4. Non-traditional players- Auto OEMs, Home Security companies, IoT players

Bain & Co say insurers can fight back as customers want insurers to be a part of ecosystem service providers.

We have all heard of insurers promoting escape of water risk prevention services, leveraging auto telematics to reward better driving behaviour and embracing wearables to monitor health and activities.  Small steps but not really an overarching strategy to deliver risk prevention and a new era of connectivity driven services.

To build that vision into goals and a viable strategy insurers must face hard facts.

Millennials live in smartphones and tablets. They are:

• Fickle
• Switch service providers frequently
• Demand simple digital interactions 
• Demand frequent, proactive digital engagement
• And people to talk to when they need empathy and advice

This takes insurers outside their core competencies and areas of competitive advantage. Insurers have under-invested in data analytics, master data management and agle no code software. A large proportion of their IT investment is spent maintaining core systems of record and multiple technology stacks inherited over decades of M&A.

Ads a result they know less about their customers than  the Big Tech customers who thrive on customer data.The data about Tesla drivers is held by Tesla and not by insurers. Sensors installed in vehicles, cars, homes and inserted in pets are provided by tech companies. Insurers are falling back in technology stacks layer by layer.

Who controls the data controls the value-add services. This trend is most evident in autos whilst life insurers are probably best placed to leverage wearables and health apps unless Amazon, Berkshire Hathaway and JP Morgan steal the digital match.

Who collects the data controls the value-add services. This cannot be repeated often enough. That leads uncomfortably to the next danger.

Danger Three: threat of new entrants

Many customers trust at least one tech company more than they trust insurers because they interact proactively with them.

Insurtechs have not really made a disruptive impact yet and are not the main beneficiaries of church

Tech companies stride purposefully into the gap

• Amazon partners with Mapfre, Berkshire Hathaway
• Alphabet with Oscar health
• Ikea with Swiss Re

Insurers need a clear, coherent and overarching strategy to keep close to the collection of data via these exponentially exploding numbers of sensors and the companies installing them. This means deciding where in the evolving ecosystems they best fit and whom they best partner with.

• Insurtechs?
• Tech Companies?
• Systems Integrators?
• Auto Manufacturers? (aka mobility solution providers)
• OEMs to the auto business, homes, medical/hospital services.

More likely combinations of all these. 

The strength insurers have is that customers trust them and want insurers to be at the forefront of digital transformation and new insurance models.

Even Millennials still want personal contact at any point in the insurance and especially claims journey. Insurers can combine slimmed down call centres (the typical claims handling teams today) to customer engagement hubs empowered by intelligent technology platforms.

Automating the simple and predictable tasks means the customer engagement teams handle the complex and unpredictable needs of policy holders and claimants. 

The insurance platforms must integrate with and leverage the ecosystem partners insurers partner with whilst still allowing insurers to innovate, test, iterate and customise optimal workflows and processes that deliver delightful customer journeys and experiences.

• Easy to compare
• Easy to buy
• Easy to use
• Easy to claim
• Where the value exceed the effort to use
• Where customers offer to share data in return for value-add services

The time is ripe as No Code software and platforms that are scalable, proven and relevant are deployed across the globe. 

Meaning insurers can deliver added-value services quickly, test and whilst discarding those less valued continuen to iterate and improve the ones consumers value with their digital wallets.

A platform like360Siteviewthat allows insurers to turn ideas into added-value products and services without coding or reliance on an army of developers and consultants.

The time is right and the time is now to leverage the new Era of Connectivity and avoid the pitfalls by partnering with the right companies. 

To discuss this further I would be delighted to help shape strategies and ideas. Email me on

Mike.Daly@360Globalnet.com

Further Reading:

Why do consumers leave their insurers?

Auto industry OEMs venturing into Carrier's markets

Swiss Re’s iptiQ and IKEA partner to launch affordable and easily accessible home insurance

The future of insurance is happening without insurance firms

Insurance Ecosystem Models

True Digital Transformation or Just Digitizing?

Insurance beyond digital: The rise of ecosystems and platforms