Steve Jobs gets a lot of credit for imagining computer use, for making us mobile and for putting technology in our hands that has changed the way we communicate, do business, buy products and so much more. While in this case it was the availability of increasingly powerful data storage options and more widespread Internet connectivity that enabled Jobs' rapid boundaries, adversity is more often the catalyst for dramatic change.
Prior to the ongoing COVID-19 pandemic, the insurance industry worked hard to overcome the notion of being outdated and out of touch. Part of this work above all means that you are faster and more willing to evaluate, buy and implement new technology. Today, the challenges of a global health and economic crisis are causing insurance organizations to climb to fully support a monumental change in customer risk needs, requirements and expectations.
But remember, from adversity comes innovation and invention. For insurers who are willing to adopt a new way of thinking and use the latest technology as a way to adapt to changes in the market, the personal, commercial, economic and social recovery is an opportunity. Insurers can emerge from the pandemic stronger and more able to meet new customer expectations and global demands and ultimately accelerate growth. Unfortunately, change is seldom easy.
There are operational and technical changes necessary at the basic level that enable insurers to match the pace of future business and success in this new era of insurance. And as the insurance industry continues to develop, it is important to give leaders the courage to seize the opportunity that comes with disruptions in terms of product innovation, redefining distribution and new technology.
The last decade has seen changes in lifestyles, workplace trends, entrepreneurship and new technology-driven businesses, such as online grocery stores, drone-based businesses and new services supported by the IoT. At the same time, we have seen new economies grow, such as gaming and sharing economies.
Today there are more small businesses than ever before, more women start businesses and more people work from home. Expectations are also different. Policyholders require more transparency in the calculation of premiums or risk assessment, self-service options for payment of invoices, insurance documents and claim status and an ability to proactively influence premiums through behavior modifications. These changes mean that both individuals and companies bear new risks or bear existing risks in different ways, and thereafter product innovation, true product innovation, can no longer wait. The move towards more personal, on-demand, use-based insurance products (UBI) takes place in all industries, but especially in real estate and accidents (P&C), as a way to meet and support the growing business landscape. [1
While many commercial policyholders will still purchase coverage from an insurance agent or broker, the next generation of policyholders is expecting channel options. In addition to the agent / broker option, insurance companies today must offer viable online or direct functionality through a dedicated portal, partnerships with public agency management (MGA) that can quickly cover new geographic areas, and places of purchase, embedded or ecosystem games through integration options. It is no longer just about convenience, it is about awareness and matching the right coverage to the right policyholder, through the right channel, at the right time. Finding a mix of distribution channels that enable market speed, producer profitability and a greater degree of self-service is the key for insurance managers who redefine the distribution schedule.
New Technology Foundation
Investments in cloud and next-generation core systems as well as emerging technologies (such as artificial intelligence (AI) including machine learning (ML), robotic process automation (RPA) and natural language processing (NLP) solutions) will support new greenfield business models and insurance products and accelerate innovation and growth for weeks versus months or years. New commercial coverages, such as those for cyber, cannabis and on-demand or UBI commercial cars today, are born digital and are in themselves flexible thanks to the flexible technology platforms on which they are based. As confidence in emerging technologies grows, enthusiasm for immediate use must be mitigated by industry expertise that does not compromise compliance, integrity or security of personally identifiable information (PII).
Throughout history, there has been a strong link between disruption and opportunity – driven by innovation in business and technology. COVID-19, including cultural, demographic and global pressures, changes customer behaviors and business models and creates demand for product innovation, redefinition of distribution and new technology base. It follows that these requirements create opportunities to make insurance better and more relevant through innovative application of technology. But just as Steve Jobs envisioned the world of the personal computer, insurance executives and organizations must be willing to think differently to get the most out of this open window.
To hear more about the possibilities, see the latest round table on request.
Seth Rachlin, Global Insurance Industry Leader, Capgemini Financial Services
Denise Garth, Chief Strategy Officer, Majesco
To continue this conversation, contact Seth on LinkedIn and Denise on LinkedIn or Twitter