Looking Forward Insurance — How Insurtech Is Making Insurance Look Alive For The Future
The insurance industry continues to step into the breach and support people, often in times of incredible emotional and financial need. Throughout these years, there were countless stories and examples of the great work that insurers do and the steps that they are taking to protect their customers when they are at their most vulnerable.
With that in mind, we thought it a good opportunity to take a look at the years ahead and discuss some of the things that will take place in the insurance market in the coming future.
The outlook for human kindness
The primacy of the customer has been a major issue in the insurance market for some time. With the influx of millennial customer habits, insurers had to recognize and adapt to the fact that people want insurance on their terms, that they can manage and access whenever and however they want. This largely meant the development of digital channels and the adoption of chatbots, apps, and on-demand insurance.
Yet, there is a dawning recognition that digital is not always best. Maybe it works when you have lost your phone, but it is not so great when your house has been burgled. In more serious instances of loss, you need human sensibilities and emotional intelligence. The importance of digital is still going to remain, but it will be human interaction that customers put the highest premium on when they need it.
In the coming years, the insurance industry is going to go from a customer-first to human, and it will be the value insurers create from their staff that will be the biggest differentiator.
Collaborate to accumulate
The question of whether insurers will be uprooted by digital-first insurtech “upstarts” appears to be largely answered as we head into the future, and the answer is no. Although there are record levels of investment in latter stage insurtech, the insurance boat has been rocked, but not capsized, by these challengers.
Nevertheless, this is not a case of insurers triumphing over insurtechs. They need them more than ever. Customers expect digital channels that work. An appetite for on-demand insurance for the shared ownership economy is growing. Insurers need to work with insurtechs who specialize in these areas and integrate them with their offerings. Integration is the operative word here, as a poor integration into an insurer’s core platform will be a disaster. To help achieve this, expect many insurers to make the move to the cloud if indeed they have not already; this means someone else is responsible for the APIs whilst they focus on delivering customer value.
Head in the clouds
The insurance industry has recognized SaaS as a viable model for accessing the computing capabilities they need to run parts of their operations for example in sales and marketing. Shifting more significant IT risk to a chosen vendor is the next step in cloud adoption that is beginning to gain traction, especially when it comes to core processes, whether it is for a bank or an insurer. In the wider IT world, digitally mature companies want their technology projects to ‘make’ rather than ‘save’ money.
There may be some who would argue insurers are some way off from being digitally mature, but the larger point is that IT is no longer there just to keep the lights on. In a global insurance landscape where players in foreign markets are achieving huge market share through the use of technology, some insurers just cannot afford to sit on their hands. Insurers need to take the shackles off their IT teams and let someone else take responsibility for their core system maintenance. Once they have done that, we should see insurers begin to innovate more easily as they take advantage of the agility the cloud affords to develop and integrate new services that drive customer value.