In the modern age of GPS, Google Maps, and Instant News, it is hard to imagine that civilizations were simply blind without maps for centuries. Even the modern era is approaching, explorers, such as Lewis and Clark, met their travels with a certain level of anxiety and fear of what lay outside the known world. The maps they had were largely blank, with vague lines indicating the best descriptions they could find from trappers and natives. It was up to them to work in the dark while making new maps.
Once we had extensive geographical maps, the maps were still expensive and scarce. When American hostilities broke out against Spain in 1898, the first map of the Philippines that President McKinley was able to locate in the White House was torn from a geography for children. He had to wait for real maps to be delivered from the Coast and Geodetic Survey. [i]
In some ways, however, the lack of maps was at least an excuse to work in the dark. Today, insurance companies work with access to thousands of "map-ready" data sources. We have satellite imagery, geo-spatial data, radar to warn of weather conditions, location data, images, expert demographic and geographic data, real-time IoT, telemetric and health data, social media, data related to business and consumer behaviors and trends and so much more !
How much more information do we need to create accurate maps of new opportunities and new markets? Too often, companies still blindly move forward in new markets as if they were unknown territories, or they stay away from new ecosystems, partnerships and opportunities due to lack of knowledge or fear of the unknown.
This is relevant and true for the program and Affinity business. Why? Because even though companies have had some success, they have stuck to the proven paths for partnership, white marking and growth instead of moving with market and customer trends towards the newer and hotter opportunities that are not only on the horizon, but are now clearly in our middle. While the possibilities exist, however, they can not be understood so easily. We need new maps. Insurers must clearly identify these opportunities so that they can map a course in the right direction.
Using primary research from Majesco and our latest joint research with the Professional Insurance Marketing Association (PIMA), we have created maps to help you map a new one. course to capture new opportunities for affinity and program growth.
You will find these maps in Majesco's latest thought on leadership report, A Roadmap for the Future of Insurance: Programs and Affinity Businesses written in collaboration with the Professional Insurance Marketing Association (PIMA). In our report, we use our joint research with PIMA and PIMA's latest research initiative, Affinity 2030: Exploring Our Blind Spots for a Brighter Future in conjunction with Majesco's 2020 car and life insurance customer survey to uncover blind spots and reveal the growing opportunities for affinity and program growth. We highlight some of these maps with you in today's blog.
To better understand the maps, we must first look at the basic relationship between programs and affinity activities and ecosystems and partnerships. .
Ecosystems and partnerships
Given the nature of partnerships and ecosystems, insurers have choices. They can take on several roles, from owner of the customer and unifying platform, to orchestra of the products and services, or the supplier of products and services. What they achieve depends on their ability to enter the market while still containing unpopulated territories. Of course, this requires leadership with an appetite for taking informed risks, the ability to move quickly, the ability to build partnerships within and outside insurance, and strong technology capabilities.
Partnerships and Integrations
What is clear from our multi-year research is that the expansion of partner ecosystems is beginning to separate the leaders from the group. As we have seen with customers' expectations, market boundaries are no longer as relevant as they used to be. Traditional silos are falling. Customers want to buy when and where and from whom they want. Technology drives new customer expectations, changes and expands the traditional markets and channels through which insurance is sold, including retail, banking, gig or on-demand activities, automobiles, transport companies, big tech and more. This creates greater value for the insurance industry to capture new revenue streams and gain access to a broader market through the multiplier effect.
But is the industry growing its partnerships and ecosystems? Figure 1
Two newer and more innovative options are also available:
- Offers APIs to embed your product with another company's offering or on their platform (54%). This is as the Amazon-Acko relationship recently announced in India where Amazon will offer car and motorcycle insurance, supplied by Acko but sold through Amazon Pay. [ii]
- Collaborates with other companies to embed an insurance product as part of their product or service (50%). This is like what Tesla and Ford offer. When you add the levels of consideration and planning to these, the figures jump to 89% and 88% respectively, which also exceeds the traditional partnership and the white label, which indicates a change in the types of partnerships used, and greater adaptation of offering products where and when customers want them – move the model from sales to buying focus.
Figure 1. Activity levels for creating connection and partnerships with other organizations.
Comparison of PIMA / Majesco's joint survey results with our strategic strategy for 2020 Priority results reveal that companies with affinity and business models place themselves far ahead of "traditional" companies as leaders in strategic partner ecosystems which is reflected in Figure 2.
The gap between traditional and affinity / broadcasters varies from 14% -33% higher when it comes to offering the different options for collaborating and reaching new markets – either via APIs (26% higher), embedding insurance (28 % higher), or sales of white label products from another company (33% higher).
The gap underlines why affinity and software companies are ready to take leading positions in a rapidly changing landscape of customer expectations.  Companies that are not actively engaged in building a partner ecosystem through affinity and program activities lose out on a significant growth engine and will find fewer opportunities for partnerships the longer they are delayed as today's "white space" is captured by these new leaders.
Figure 2. Traditional insurers versus affinity / program activities – Levels for creating connection and partnership activity
New partners and channels: Putting products in the purchasing path
For decades, agents and brokers have long has been the choice for P&C and L&A insurance companies. Our research clearly states that customers still see them as a viable and important alternative … but that they are also looking for a broader multi-channel alternative. This multi-channel expectation is driven by a number of factors, but especially customers and partner ecosystems.
Customer expectations are shifting to a multi-channel world, challenging insurers to provide channel options and choices, either directly or through partners. Multi-channel distribution options improve customer interactions on the customer's terms … not the insurer's.
We asked the surveyed companies to indicate how actively they worked with a wider range of channels – the same as we asked customers about in our lives and car insurance research earlier 2020. The results and contrasts were quite interesting, as depicted in Figure 3.  The three most traditional channels already used were what you expect to see, such as groups or organizations (73%), financial planning services (35%) and banks or credit unions (50%).
The top three new channels used, such as Facebook (42%), Google (31%) and embedded in the cost of an event or activity (23%), were surprising and encouraging. (Although we suspect that Facebook and Google may be through marketing ads rather than real partnerships.)
Looking at the chart overall, it is visually telling that only 18% (6 of the 34) channels or partner options are measured at 50% or more in interest (companies already doing and considering / planning together) – reveals a very narrow use of channels that significantly limit reach and revenue opportunities. Only 12 out of 34 (35%) show a third or larger activity … emphasizes the company's limited approach and a wide open field for those who dare to be creative when it comes to creating a next generation partner ecosystem. Companies with limited plans leave the door wide open for competitors within and outside the industry.
Figure 3. Channel options used or considered and planned.
Compared to what consumers think of these channel alternatives, the gaps between suppliers and customers become painfully obvious, as depicted in Map 1. Key results:
- Almost 67% (12 of 18) missed opportunities with the younger generation in the upper left quadrant , while only 28% (5 of the 18) are missed opportunities for the older generation. This highlights how business assumptions and models do not adapt to the younger generation, which will dominate purchases within the next four years, leaving many insurance companies "flat-footed."
- Companies focus on only 7 channels that are important to consumers 4 for the younger generation and 3 for the older generation, which highlights a limited reach for both generations. for the older generation – areas that are not so strongly seen by customers.
- Finally, three channels have overinvestment by insurance companies one for the younger generation and two for the older generation: Google and Facebook.  The key insight from this chart is that in order for insurers to reach customers, especially the next generation of buyers, on their terms through a wider range of channels, they must aggressively develop strategies and implement plans to move those channels to the upper right. the quadrant of the orientation.
Today, there are so few channels in the right-hand quadrant, underlining the unmet need and expectation that correlates with limited growth in the affinity and software market. While we have seen strong growth over the past five years, the growth potential is noticeably more … but only with strategies and plans to do so.
Map 1. Focus analysis between opportunities and customer channel preferences by generation
We also compared companies 'and customers' views on other products that can be offered as part of an experience for either auto or life, part of a broader customer experience concepts in the Auto and Life surveys. We show these results on map 2.
- We found 45% (5 of 11) missed opportunities for each generation segment.
- Only one (10% or 1 in 11), financial planning / pension service, was adapted to customers' expectations of both generation groups.
- For customer choices of lesser interest, companies focused on 45% (5 of 11) of them.
The main insight from this chart is that customers have a widening expectation of the types of products and services they want to offer – but which insurers are misadjusted to – especially for missed opportunities that could significantly increase customer expectations. This insight highlights the potential of new partnerships and revenue options in addition to traditional insurance risk products that will strengthen customer relationships and engagement.
Map 2. Perceived benefit of product range within an ecosystem app.
This brings us back to the idea of shopping routes and maps.
The usefulness of any map is in the path and direction it provides. If insurers can identify relevant avenues in customers' lifestyles and buying patterns, partnerships can be formed to place innovative and necessary insurance products and services along these avenues.
In our next blog we discuss how important it is for insurance. industry to adopt a multi-channel approach to program development and affinity We will also look at some of today's innovators for inspiration. Which new leaders use their knowledge of the changing customer landscape to reduce insurance gaps by placing insurances when needed – offer a path for opportunities and growth?
You can use more insights about the program and affinity business by listening to our latest webinar, Power of the Insurance Niche Market: Program and Affinity Business is Hot Hot Hot a conversation with myself and PIMA's executive director and industry expert, Ann Dieleman. You can also gather the latest program and affinity insurance trends in one place by downloading A Roadmap for the Future of Insurance: Programs and Affinity Businesses .
[i] Morgan, H. Wayne, William McKinley and His America, p. 293, Kent State University Press, 2003
[ii] Singh, Manish, Amazon-backed Indian Insurtech Startup Acko raises $ 60 million, September 15 2020, https://techcrunch.com/2020/09/15/amazon- backed-indian-insurtech-startup-acko-raises-60-million /