Spring. The season of rebirth. Revival. Rejuvenation.
We see the first colors – yellow daffodils, green grass, purple hyacinths and white flowering trees emerge. Spring is the beginning of something new. From long winter days, snow and cooling cold arise the new ideas and energy.
And the spring of 2021 is unique and more powerful, because we are not only coming out of winter but also out of the COVID pandemic, where hope and the beginning of something new are sprouting.
2020 saw the constant threat of disruption, expanded and accelerated due to COVID and its constant consequences for the economy, companies and individuals. Now, almost a year after the inception of COVID, companies ̵
The necessity of the insurance's digital transformation has obliterated all remaining doubts as a result of the pandemic. With rare exceptions, the is the only way to do business digitally. It is digitally transformed or dies.
Leaders know that they can not assume that the customers they serve today need or want the same products and services tomorrow … or that the same customers will come and with being there tomorrow. Leaders constantly monitor the changing demographics and dynamics and make short- and long-term adjustments to adapt and thrive in an ever-changing market.
Andreessen Horowitz, a renowned leader in technology, noted in his blog, “2020 has shown us that every company – regardless of industry or size or age must become a technology company to survive. [i] Although many leaders are not technical experts, they understand the business value and impact of technology on business, not just today but in the future. They realize that they need to consider their future with new products and business models that will accelerate growth and position them as leaders in the digital insurance age.
New market opportunities with new products
The COVID crisis seemed to come from nowhere and blinded the world with the force of a tsunami. Suddenly, the "usual" way of doing things no longer worked. We have seen it before with other major events or crises. We learned … adaptability to a new reality in the market is the way to new opportunities.
Brokers and employers met a new reality recently hired favors open registration season – and they adapted. The pandemic emphasized the need for specific voluntary benefits based on the market and customer dynamics. In a new article on BenefitsPRO, they note that new data from Aon shows that employers increased by offering voluntary benefits by 27% during the most recent enrollment period. In particular, the demand for ID protection (probably due to more employees working remotely), short- and long-term disabilities and life insurance led by 10–40%. In addition, additional benefits, including accidents, health care benefits and critical illness, saw significant growth as new benefits offered by employers. [ii]
Similarly, we saw an increase in buying individual life insurance policies, especially lifetime or lifetime. The value and importance of that step to the forefront especially for the younger generation. In our customer life insurance survey, we found that 79% of Millennials and Gen Z were ready and willing to buy life insurance. But their expectations of the product and the experience were very different. Companies like Haven Life, Ladder Life, Lemonade and others that offer a digital, simple and fluid shopping experience saw tremendous growth. Fast-forwarding and many traditional life insurance companies now want to launch new semester and overall products and business models that adapt to a new reality.
The pandemic had a huge impact on car driving in 2020, resulting in a growing market opportunity for insurance companies to accelerate the offering of UBI car insurance. It has been noted that telematics data and the significant decline in driving due to staying home early in the pandemic was an important reason why insurers were able to return money quickly to customers, which has subsequently led to increased interest in UBI insurance from customers. and insurance companies. which does not currently offer it. According to a study by Allied Market Research, the use-based insurance market is expected to grow another 25% by 2027. [iii] Those with UBI offerings (and several players entering the market now, such as Farmer's new commercial car use-based program called FairMile) are positioned to capture this market opportunity when car owners go from traditional to UBI insurance. [iv]
Due to significantly changing customer behaviors, needs and expectations as well as the use of technology during the pandemic, we are now seeing the emergence of new or reshaped companies. Some of the industries ready for growth include e-commerce merchants, online merchandise, e-learning, dark kitchens, supply chain resurfacing, virtual meetings, augmented reality and more. Many of these will require new products and services to cover their businesses and the new risks associated with them. At the same time, almost all companies have increased their digital presence, increased their cyber risk and the demand for cyber coverage.
New market opportunities with a new business model
In today's dynamically changing market, there are a growing number of unearned and substandard markets, often driven by new industries, innovative new companies, technology and changing customer demographics. Instead of fighting for the same market share, capture and grow new market share. A start-up mindset will give teams less fear of entering untried or untapped markets.
New and untapped markets are increasingly supported by greenfields and start-ups. Similar to the post-finance meltdown and the emergence of InsurTech, we continue to see new business models – but increasingly from existing insurance companies as a greenfield. At the same time, we are seeing a "doubling" of investments in greenfield start-ups or acquisitions of existing insurance companies.
Porch's acquisition accelerates their new business model of offering homeowners insurance with a range of value-added services – creating a new customer experience that also helps reduce risk. [v] Next's acquisition of Juniper Labs will expand their predictive analytics and computer science team to leverage expertise across their entire portfolio of insurance products — providing enhanced data security claims. [vi] And then Lemonade expands to life insurance with a new offer that uses the platform from Bestow, a digital life insurance company. [vii] These companies understand that the risk product is only one part – that the digital experience and value-added services are equally important for a new generation of products and business models.
In these examples, digital business models continue to expand and adapt to new market opportunities across a range of products for individuals and businesses. These greenfields and start-ups have new business paradigms that are constantly being tested, grown, adapted and matured — but at a speed unseen by most traditional insurance companies. They apply a healthy mix of entrepreneurial energy and digital expertise to traditional insurance wisdom.
Market leader – new generation with accelerated growth
The changing market and competitive landscape, low growth, narrow margins, high operating costs, declining customer satisfaction and slow market speed for new products place many insurance companies further behind the leaders introducing new products and business models which captures new market opportunities and growth. This new generation of leaders surpasses them on so many fronts, placing traditional insurance companies in an increasingly challenging position.
Early data from the AM Best Innovation Assessment in March 2020 stated that there is a connection between innovation and business. The insurers that have the best operating performance have better innovation results and those with the highest overall financial strength have higher innovation levels.
In our new research on strategic priorities, we found that those who focus on new products and business models along with expanding channels, move to cloud platforms and redistribute resources to focus on changing the way they do business are well positioned as a new generation of market leader. On the other hand, Laggards is significantly behind with a gap between them and the leaders of 103% and for Followers the gap is 28%. This gap reflects a focus on the past rather than the future – a dangerous blind spot for insurance companies that want to remain viable and relevant in a rapidly changing market. Success requires leadership and revival of the insurance model.
Spring is here. A new normal has arrived. It is not possible to return to "normal". Bold moves that embrace the "new normal" will define the next generation of leaders in the insurance industry.
As the industry continues a new digital awakening and adapts to market changes, new customer expectations and global demands, insurers willing to adopt a different mindset and leverage the latest technology to accelerate growth will accelerate their growth and position themselves in a new era of market leaders.
Are you ready for a new era of insurance? Are you looking at the possibilities for new products and services that meet a changing marketplace? Are you ready to launch a new greenfield business model to create a new foundation for your future?
Are you ready to be a leader in this new era of insurance?
What we can say is that your competition – current and new – is actively emerging from the past year with ideas, energy and commitment to the future of insurance. The buds of a new era of insurance are blooming around us. Open your eyes and see the possibilities!
[i] A16z-ledare, "The Enterprise in 2020 – what 24 company builders had to say," December 18, 2020, https://a16z.com/2020/12/18/the-enterprise-in- 2020 /
[ii] Payne, Emily, “Diagram: Voluntary Benefits Increase,” BenefitsPro, March 29, 2021, https://www.benefitspro.com/2021/03/29/charts-voluntary-benefits- on- the-rise /
[iii] Yale, Aly, "Drivers Choosing Use-Based Insurance Amid COVID-19 Pandemic, Study Finds," February 3, 2021, https://www.foxbusiness.com/money / drivers-opting -for-usage-based-insurance-covid-pandemic
[iv] Golia, Nathan, “Farmers Launches Commercial UBI in Washington, & # 39; April 8, 2021, Digital Insurance, https: //www.dig -in .com / news / farmers-launches-commercial-ubi-in-wash
[v] PYMNTS, "Porch expands to InsurTech, adds key acquisition services," January 15, 2021, https: // www. pymnts.com/news/partnerships-acquisitions/2021/porch-expands-into-insurtech-adds-services-with-key-acquisitions/  [vi] Wilhelm, Alex, "When Next Insurance makes its first acquisition, insurtech looks energetic, "December 10, 2020, Tech Crunch, https://techcrunch.com/2020/12/10/as-next-insurance-makes-its-first-acquisition-insurtech-looks-energetic /
[vii] Sheehan , Matt, "Lemonade launches life insurance using the Bestow platform," 10 February 2021, Reinsurance News, https: //www.reinsurancene .ws / lemonad-launches-life-insurance-with-shine-platform /