The impact of business and consumer trends is sometimes more apparent when we connect them. For example, if you follow the trends below, you may come to some new conclusions about where and how non-life insurance companies should focus on their future development strategies.
- In 2019, personal savings in the US were $ 1.2 trillion.
- In 2020, personal savings in the United States to the tune of $ 2.3 trillion. [i]
- Gen Z and Millennials invest outside their retirement plans at higher prices than their predecessors, but their choice of investment tools are new platforms, such as as Robinhood.
- Robinhood has a market share of 37% in this area over Fidelity (26%) and Acorns (23%). [ii]
- Personal health spending increases, with individuals wanting to improve their health. [iii]
- All this indicates a renewed desire for financial control, self-sufficiency and protection from catastrophic economic consequences.
- At the same time, long-term insurance will be reviewed by financially conscious customers. seeks price and value. [iv]
The message is clear. A volatile world has generated new scrutiny of individuals and companies. They want to prepare for anything by protecting themselves from loss and doing whatever it takes to keep the keys to their future in their own hands. The customer wants to drive. Are the insurance companies ready to thrive when we have given them the keys?
Innovation with the customer at the center
Last week, Majesco and Capgemini together released a thought-provoking paper, Embracing Innovation and Growth Opportunities in P&C Insurance. In last week's blog, we used the magazine as a springboard for a discussion of why non-life insurance companies must invent themselves to suit new market needs. In this week's blog, we will look at how creating an engaging customer experience will strengthen an insurer's strategy and allow them to take advantage of platform technologies.
Responds to changes. Change to respond.
At a high level, insurance companies must achieve two coherent goals.
- They must respond to change by switching from push to pull. They have to turn the insurance process into something that is bought, not sold.
- They have to improve their speed and agility. They need to change their business and their technology to become responsive to changes and opportunities in the market. The faster they can bring new products and channels to market, the more effective they will be at taking advantage of trends.
Change from push to pull
In this new insurance era, almost every process quickly becomes frictionless, including buy. If distribution channels are easy to use with products that are easy to understand, insurance companies can grow through a frictionless, multi-channel distribution system. According to the World Insurance Report 2021 by Capgemini and Efma, more than 70% of customers expect a seamless multi-channel experience for police investigation and purchases. [v] The advantage of adapting to this channel dynamic is that we go from having to sell people to buy insurance to introducing insurance that is ready to be bought seamlessly when needed, which creates a scalable, sustainable business model.
Technology provides energy. customer expectations, change and expand markets and channels through which insurance is sold, including the automotive industry, transportation companies, BigTech and more. In order to get customers to buy insurance products on their own, in addition to identifying customers' needs and expectations, insurance companies must understand and adapt to their behaviors. Customers want to buy where, when, how and from the supplier that offers the best fit. the services or the provider of products and services. This will lead to a transition of the insurance value chain from a monolithic to a modular, where industry players will focus on their strengths within a specialized value chain. This could lead to two future scenarios highlighted by World InsurTech Report 2021 by Capgemini and Efma – Insurance embedded as an added value in third party ecosystems or Insurance with added value at the core of offerings . [vi]
What they achieve will depend on their ability to enter the market while it is still a crowded space. When early insurers enter these markets, they will experiment, succeed, fail and learn how to best fulfill their roles in the new insurance landscape. An insurer's opportunity to enter now will provide greater long-term value. New revenue streams and access to wider markets will have a multiplier effect. We are currently seeing this unfold in the new business models for affinity and programs emerging in the market.
Insurance companies need to repeat their role by adopting the "cultural persona" of flexibility. Companies with a cultural mindset that insurance needs to adapt to the customer will overtake competitors who believe that policyholders need to adapt to insurance.
What these insurance companies will find is their choice of place in the ecosystem, the best choice of available roles and the first deal with innovative products that will change the face of insurance. The future depends on being in the right place at the moment.
The market moves through speed and agility
Of course, the demand for insurance is not the only decisive factor for the insurance value. Innovation matters. Can insurance companies predict what will come and do forward-looking, market-changing products and services? Can they use customer trends to predict customer needs and voluntarily give customers the keys to purchase? It is not easy for any organization to gain the momentum it needs for change while the company is in motion.
Trend makers in the industry differentiate themselves by first letting go of their need for older operational traditions built into their current business system. Instead, they proactively shift their technical and administrative weight using a two-speed strategy for growth and future relevance.
- Speed of Operation is for the traditional business model with mature systems and processes that need operational improvements through modernization and optimization with cloud and API-based modern solutions that deliver in months versus years.
- Innovation Speed is for flexible, fast and MVP models to explore, test and introduce new products – many about 12 weeks or less. This strategy prepares the new business for the future with the help of the next generation of built-in cloud micro-services and API-based solutions.
Visionary, inventive leaders see the market, customer segments and technical trends as a gateway to new revenue. Therefore, they prepare to use new data sources, reach new market segments, offer innovative customer-facing products, create exceptional CX and take advantage of new channels.
Leaders drive exceptionally well from knowing to planning and then doing, and adapting priorities to strategies and action. When these are not adapted, a Knowing-Doing gap arises that defines insurance companies as a leader, successor or laggard, based on Majesco's research on strategic priorities.
Companies that postpone risk their future. The time for plans, preparations and implementation is now – one realizes that the gap is widening and the time frame for reacting is coming to an end. Leaders, as early users, are positioned to succeed.
Platforms fit customer-centric engagement and insurance companies' need for rapid flexibility
Leaders use an outside view with customer needs at the center. This is where platform technology makes a difference. Platforms support robust business models with network effects that disrupt traditional models, create enormous customer loyalty and offer significant growth opportunities. As a result, platforms are fundamentally changing companies, and insurance is no exception.
The heart of the insurance platform is an orchestration of next-generation technologies, including cloud-based computing, micro-services, APIs, new data sources and artificial intelligence and machine learning, living ecosystems of partners providing innovative or complementary products and services. This unified combination of components enables insurers to move from owning complex core systems to owning greater technical agility and flexibility, digital flow, innovation and the speed of value required to meet today's pace of change.
Leading companies work together to extend the range. , adopt new features, access new data and speed up the market.
- Collaborating with ecosystem partners and InsurTechs enables insurers to cross-sell / resell and launch innovative products.
- Carriers using open APIs can reduce service costs, package services and strengthen the value proposition
- Insurance companies that work with ecosystem partners stay informed about future product needs
- And they can strengthen their digital strategies, adopt new business models and add lucrative revenue streams
to most successful managers increasingly leading platform technologies and innovating at a faster pace. They increasingly see themselves as technology companies that provide protection services compared to insurance companies that use technology to deliver insurance products.
For a deeper look at the report, including the six key focus areas that insurance companies can utilize, be sure to download Embracing Innovation and growth opportunities in non-life insurance. And if you are curious about all the benefits you will get through nuclear transformation, you can get an excellent primer and overview with Majesco's latest webinar, An Intelligent Core to Transform Your Business.
Seth Rachlin , Global Insurance Industry Leader, Capgemini
Denise Garth, Chief Strategy Officer, Majesco
To continue this conversation, contact Seth at and and and 19659045] LinkedIn or Twitter
[i] https://www.statista.com/statistics/246261/total-personal-savings-in-the-united-states/  Jack, GenZ and Millennial Investors; Ranking of the most used and trusted investment tools, The Motley Fool, August 3, 2021.
[iii] Callaghan, Shaun, Martin Lösch, Anna Pione, Warren Teichner, Feeling Good: The Future of the $ 1.5 Billion Wellness Market, McKinsey, April 8, 2021.
[iv] Bundrick, Hal M., ‘Financial security is fun now.’ Many Americans want to continue to save more and spend less., MaketWatch, January 21, 2021.
[v] Capgemini and Efma, World Insurance Report 2021, 12 May 2021
[vi] Capgemini and Efma, World InsurTech Report 2021, 16 September 2021