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Insurance products and services that suit future customers

April 4, 2019 |
Denis Garth | Subject: Change of risk profiles and needs, cloud solutions, insurance business models

  What is around the corner?

The only thing that is certain about the future is that there is a constant change, which creates surprises and risks around every corner. This week's surprise is Wow Air's financial failure ̵

1; the supercheap Icelandic operator who had temporarily given the world "ridiculously low" transatlantic air fares.

While most of us may regret Wow's closure far from, Wow's instant shutdown was a cold splash of reality to thousands of people stranded far from home. Many thousands of other people have permanently lost their prepaid flights. The airline's insolvency is not covered by most travel insurance policies. Some of these purchases will be covered by credit card companies, but many real people run into a risk and are now lost substantially when they encrypt to buy their flights again via another operator. [i]

This is just an example of how change creates surprises and risks. Management of change and risk has always been the insurance area. Our industry is capable of helping people cope and give them a small measure of security in the middle of an uncertain world. Since this world is in the midst of great change, we should also be in the midst of anticipating how we can cover these risks and how we can serve those who are guarded.

Travel is a great place to start. We know that travel arrangements are in flux. High-speed trains in Florida and California may be the forerunner of more rail travel. Autonomous techniques can contribute to fewer personal vehicles. Younger generations rent longer than owning a home. Distracted driving increases. The sharing economy allows homeowners to rent out their homes. It also contributes to a growing supply market.

In Majesco's recent management report, we build a business model for future insurance customer . We look carefully at how investigated consumers who make or share insurance decisions make their own relationship with insurance. We also investigate how up and coming technology and lifestyles are set to influence insurance product and service. In last week's blog we told why business models have to change to meet future customers. In today's blog we will give an insight into why future products and services must also change. To do so, we should look at two types: current and future lifestyles and current and future technologies

. </p>
<h2><strong>  Current and future lifestyle </strong></h2>
<p>  Who buys insurance? Majesco started her research with some elementary questions about purchasing insurance through generation. The big news is that millennials are equal to or higher than Gen X and Boomers in the ownership of all types of insurance coverage except home / tenants (see Figure 1). Given that housing loans require insurance coverage, this suggests a high rental level (without insurance) among this segment and a correspondingly high market and sales potential for tenants insurance. High rental rates are probably a long-lasting effect of the financial crisis's impact on Millennial's or the university's loan receivables. The recession is also a likely driver of Millennial's high ownership of individual life insurance, annuity, and investment, reflecting concern for economic well-being and protection. Gen Z's lower ownership in 5 of the 6 types of insurance probably indicates that many are subject to parental policies and plans for convenience or cost reasons. </p><div><script async src=
 Household Insurance Decisions

Figure 1

Reduce Payment Value and Subscriptions

Since cloud technology and subscription-based services are growing (and they are growing), future customers are looking for simplification of products and services to free themselves from many different payments to uniquely different units. Customers will ask, "Can't I just consolidate all these services under the same umbrella so I don't have to track every source of recurring transactions?" This can very easily be a disruption to insurance because some efficient consolidators are already there. The insurance companies should note the very high penetration of Amazon.com accounts into the Gen Z (83%) and Millennial (89%) segments (see Figure 2). If Amazon decides to enter the insurance market, they have a large built-in base of loyal customers who look after them for almost everything in their lives. These segments are not "indoctrinated" in the way older / existing insurance works and they will work with companies like Amazon – whose processes already make them comfortable in other areas of their lives.

Insurance products and services that fit the future customers can look much more like Amazon services than our traditional products today and cover more areas of life with less division between types of insurance. Can travel insurance be combined with life or car insurance? Would we change the definition of what a "whole life" policy is and what it covers?

  High Amazon.com Account Penetration in Gen Z and Millennial Segments

Figure 2

Removing Art Mistakes and Sharing Economies

Platform companies like Fivvr.com and Freelancer.com allow people to Make money from their talents and passions by connecting them to companies that need their skills for specific projects or for limited engagement. The latest research by Upwork and Freelancers Union estimates that 56.7 million Americans worked as freelancers in 2018, an increase of 3.7 million from 2014. [ii] Our research has shown that there is a stable range of 10% to 20% over all generations who have worked as an independent entrepreneur in the Gig economy.

Platform companies such as Uber, Lyft, VRBO and Airbnb allow people to free their assets from limiting personal use and adjusting their time by connecting them to people who are willing to pay to use their assets or services on request. Because many personal assets such as cars, homes, or homes in the home can mean significant periods of unused and cost to their owners, these platforms provide millions to make money on a scale that was never possible before.

Our survey confirms that the consumption of services in the sharing economy is very strong and growing. Rideshare services like Uber and Lyft have been used most by all generations (compared to other sharing platforms tracked in our survey), but above all by Gen Z and Millennials. Gen Z-participation jumped sharply from 45% to over 60% this year. Gen Z had a strong 10 percentage point bullet in the use of home or home rental services, while Millennials showed a 9-step increase in renting a car through a service like Zipcar or Turo. With this increase in use, there will be an increase in new insurance and risk products.

  People who paid for transportation through a ridesharing service such as Uber or Lyft

Figure 3

The need for insurance for the liquid to shift back and forth from personal use to business use has been a major challenge for the industry. In the United States, rideshare insurance is available from at least a handful of carriers in all states, but there is still an underserved market estimated at 50% of all rideshare drivers without coverage. [iii] In some ways, finding products and services that fit the future customer can have more to do with a business model shift than a new product and service shift. It will have to happen before the other is possible.

Coverage for homesharing hosts is somewhat behind the ridesharing coverage. When the industry has grown, confusion has also arisen over coverage options. The NAIC suggests that the hosts can purchase a rental policy or rent only for guests who can prove that they have their own homeowners, tenants or personal liability insurance. [iv] ISO filed home management coverage options in 2016 and some major companies such as Allstate and Lexington (AIG) offer specific homeehare policies. [v] Slice has established itself as a front runner in this market with its innovative mobile managed, on-demand, pay-per-use home insurance supplement. But in many ways, this market is still "up to ceiling" and can be open to further innovative thinking. How can insurance companies create a complete insurance picture that does not leave uncomfortable gaps between owners and tenants?

Current and Future Technology

If the insurance companies are serious about developing products and services that help individuals and companies handle the world's future changes and surprises, they will also be serious about using connected devices and future technology to reduce the effects. of surprises at their companies.

Connected devices create a digital ecosystem that is an ideal environment for insurers to start protecting themselves and their customers. Because they use connected devices to develop new products and services, open new distribution channels, improve processes, and improve customer engagement, they will also use them to predict weather, unit failure, health issues, and behavioral changes. Connected devices to more than report; They can also provide valuable information and recommendations reduce the risk to their customers who are covered.

In our 2017 survey, fitness trackers were the most widely used monitoring devices for all

generations. The popularity dropped slightly this year, especially among Boomers, but fitness trackers still have one of the highest penetration rates for all connected devices.

  Smart Speakers and Fitness Band Tracker - Connected Devices for Insurance

Figure 4 [19659023] Smart speakers are the new master of the connected devices category, with nearly 50% of Gen Z and Millennials using them, followed by 33% of Gen X and 25% Boomers. Adobe research shows that 71% of smart speakers use them daily, with 44% using them several times each day. [vi] Owners are increasingly using them for complex tasks such as online search (47%), basic research (35%) and execution of smart-home commands (31%).

Connected entities and IoT open up insurance for major innovations and improvements that we often consider under the umbrella of Digital Insurance 2.0. These innovations will not only improve what insurance already does, but more importantly, they will rewrite the nature of preventive and protective coverage through a digital awareness layer caused by cloud-based digital ecosystems. The power of the Digital Awareness Act is that it can unify, simplify and break down traditional insurance barriers and open the insurance company to all possible opportunities … new customers, markets, products and partners.

To truly capture future customers and future opportunities, you must first look into the future! And you have to have cloud-based platforms that can adapt to the continuous changes, surprises and risks of speed. Therefore, Majesco has been so focused on creating cloud platforms that enable insurance companies to meet the needs and requirements of their current and future customers … so that they are leaders in the future of insurance. Be sure to download Build a business model for future insurance customers to get a glimpse of the latest trends and their impact. In our next blog, we will investigate Distribution and Engagement Strategies that fits your future customers.

[i] Matthews, Lyndsey, Wow Air is ready – Here's what it means for them $ 99 Flight to Iceland, AFAR magazine, March 28, 2019

[ii] Freelancing in America: 2018 Upwork and Freelancers Union, October 22, 2018

[iii] Campbell, Harry, "2018 Uber and Lift Driver Survey Results", "The Rideshare Guy, February 26, 2018

[iv]" Navigation Home Sharing Sharing, "National Association of Insurance Commissioners, January 2017

[v]" ISO files Homesharing coverage options for homeowners, "Insurance Journal, November 16, 2016

[vi] Abramovich, Giselle," The study finds consumers surround voice services "Here," CMO, September 10, 2018

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