Regulations, product complexity, and large balance sheets have long sheltered insurers from a massive wave of disruption that has impacted the rest of the world. But that is all changing as the digital effect becomes a normal part of consumers’ lives and opens the door to unlikely competitors.
“The insurance industry is certainly facing an interesting shift now that digital titans, such as Amazon and Apple, are testing their competitive value as nontraditional insurers. And consumer interest in purchasing insurance from these big tech firms is growing exponentially,” says Reet Das, chief marketing officer for Insurance Thought Leadership.
In under 30 seconds, Reet summed up perfectly what’s at stake for the industry as this seismic, tech-driven shift begins to take shape. As competition continues to heat up, incumbent insurers have no choice but to take a fresh look at their business models and customer experiences if they want to stay in the game.
Reet and I recently met to further explore this new reality of digital disruption and discover an emerging partnership that can help insurance companies quickly prepare for the changes ahead.
Reet, virtually every industry has been impacted by the rise of digitalization over the last few years – except for the insurance industry. But now it seems the time has come. What do insurers need to do differently now?
Historically, insurance companies have been highly focused on their products and services, not necessarily on the customer experience. But as nontraditional players begin to emerge, this mindset is becoming more of a liability than a competitive advantage.
According to the “World Insurance Report 2018” from Capgemini and Efma, the insurance industry ranks third behind retail (consumer products) and banking in customer service. And as we all know, these new competitors are widely known e-commerce retailers with a reputation for serving up incredibly easy, proactive, and fast customer experiences.
The entire insurance industry – from the carrier, broker, and agent to the third-party administrator – must put their customers at the center of the business. I can’t underscore the importance of this new imperative enough. Incumbent insurers have to view their business from the outside-in, instead of the inside-out.
Your company has developed a vast network that matches insurance carriers, venture capitalists, advisories, consultancies, brokers, and agents with insurtechs that can help them quickly create new opportunities and pioneer new business models. Why do you believe that a partnership with insurtechs is critical for insurers to overcome this wave of disruption?
Many insurance companies are not well-versed – let alone, comfortable – with investing the time, money, and resources needed to innovate with digital technology. There are so many emerging technologies and ideation concepts available that it can be difficult to know where to start first.
Insurtechs give insurers a holistic – and honest – view of their business from internal processes, such as document management and workflow, to external customer-facing applications and claims processing.
By packaging proven best practices, expertise, lessons learned, and tools, insurtechs help insurers create and deliver breakthrough processes and experiences that resonate with the evolving marketplace, as well as change the very nature of their traditional business model.
Under the guidance of insurtechs, insurance companies can become a team of technology, processes, and people that rapidly innovates with a well-defined roadmap. This is more than just innovating for the sake of innovation; it’s about igniting the insurers’ current and future growth.
Companies innovate to affect the bottom line – in terms of, for example, revenue, internal efficiency, and mitigated risk – based on the overall business approach that happens to be enabled by technology. Insurers can learn from those that have already digitalized their business so they can drive lasting change that gives their customers a reason to stay engaged and steadfastly loyal.
What should insurance companies consider when partnering with an insurtech?
Insurers should maintain a clear vision on how they want to fulfill the ultimate promise of insurance – to provide coverage for today and what might be coming down the road. They must be readily available when any customer experiences a catastrophe or life change and to process those claims quickly, simply, and reliably.
No matter the technology implemented, process adopted, and employee enabled, the right insurtech empowers all aspects of the insurance business to embrace next-generation capabilities with scalable solutions that make that value proposition evident for all customers.
Discover how your insurance business can provide groundbreaking experiences that not only grow your company but also keep your customers loyal for life. Read the press release on the exciting new partnership between SAP and Innovator’s Edge, powered by Insurance Thought Leadership.