Insurtech firms raised $2.5 billion in funding during the third quarter of 2020, an increase of 63% over the second quarter. Offerings should be customized to the individual in the interest of meeting their special needs.
Clunky processes on the part of insurers likely contributed to this shortfall. Consider something as simple as getting a physical examination, which is often required to purchase a policy. In 2018, over 50% of respondents indicated that they would be more likely to purchase if they could skip this invasive step.
There’s also a matter of the data insurers have accumulated on customers and what they are able to do with it. These companies tend to be “data rich and information poor.”
An insurtech infusion could address both of these problems, as it would provide the tools to analyze existing data while also collecting new information. Additionally, it could make predictive modeling possible, which would expedite the application and underwriting processes. This could lead to customized products (i.e., it would likely eliminate the need for things like physicals, in most cases). It could also improve efficiency, result in more affordable coverage and decrease costs for the insurers themselves.
There’s the personalization of the industry — be customer-centric, and in the end, it'll benefit all concerned.
Digital Gaining Traction - insurtechs gaining greater traction recently, the trend is not new. In 2010, a German company known as Friendsurance launched a peer-to-peer model designed to make the process of searching for and purchasing policies more customer-friendly. A similar model has been adopted in the U.S. by insurance company Lemonade.
Momentum continued to gather from there, showing that global investment in insurtech, which stood at $348 million in 2012, had reached $4.15 billion six years later. There is no going back now. Nor should there be. A report in 2020 honed in on the underwriting/onboarding process when it described the following best practices for those life insurance firms that are still getting up to speed technology-wise:
• Evaluate the entire operation: This includes stepping back and examining the entire customer experience — which is where personalization can come into play.
• Make sure everyone’s in step: This includes shattering silos and coordinating every phase of the operation, from underwriting to actuarial work and from risk to compliance departments.
• Trust the process: Digital transformation takes time, so that needs to be understood up front. There will be missteps. Mid-course corrections will be required. It is a matter of keeping the faith and maintaining momentum.
• Maintain short-term goals: There is value in getting immediate wins in that they demonstrate to shareholders and customers alike that you are headed in the right direction.
There is more to come. A day in the not-too-distant future where insurance follows a pay-as-you-live model. That is, your life insurance premiums could be determined by the lifestyle you maintain, as tracked by various wearable devices. Is your blood pressure trending up? Then so too will those premiums. Are you training for a marathon? Then your premiums will hit a downslope.
Internally, marketing and communications leaders need to continue to bang the drum for digital transformation, making it clear that this is what consumers want, and indeed, what they already have in other sectors. They can order virtually anything they want through their phones, up to and including their groceries; why should insurance be any different?
It's vital to build a culture that ties compensation to customer outcomes (NPS and CX journey scores) and create a marketing/UX “center of excellence.” The industry often falls into the trap of creating cultures focused on tech and operations — with an emphasis on driving these functions with meeting dates and revenue goals. There should also be an emphasis on operationalizing consumer focus (or centricity).
A marketing/UX “center of excellence” should apply discipline to customer experience and the idea of delivering consistently with design thinking and experimentation approaches; executing on user research, behavioral tracking and reporting; building advanced analytics/big data capabilities; and applying measurements and learnings based on those capabilities. The center of excellence enables marketers and UX experts to incorporate human-centered design and empathy into product offerings and build solutions for customers that are transparent and easy to understand. Moreover, they can use their learnings to pivot based on customers' needs.
Personalization is needed and expected, and insurtech illustrates how the industry can accomplish that. This may sounds strange: The machines will bring us closer together? Absolutely. And I that will continue to be the case going forward.
No comments:
Post a Comment