7 insurance industry trends
Ideas on tackling the challenges of transformation
By Martin Stewart : 20th of December 2020
Insurance companies have found it arguably harder than other industries to transform, faced as they are with the challenges of established processes, stringent compliance and legacy software. But a revolution is happening which can no longer be ignored. But by embracing these insurance industry trends you can stay ahead of the curve.
1. Emotion is valued as much as function & price
When disrupters like Lemonade are promising “instant everything, killer prices and big heart” it’s important to focus on both functional and emotional value. There’s proof that the more value you provide – from price and ethical standards to time savings and cultural fit – the more NPS and sales increase.
2. Millennials are the new market
Millennials are fast replacing Baby Boomers as the largest customer base for insurance. This segment comes with high expectations and expect to be communicated with not only through traditional channels and big moments of truth like a claim, but through multiple channels and smaller interactions.
Only 26 percent of Gen Y customers report a positive experience with their insurer.
3. Customers aren’t just comparing you to other insurers, but to Amazon and Google
30% of customers globally are willing to buy insurance products from companies such as Amazon and Google, who have set new standards for convenience, speed, value and ease of use.
Insurers currently lag behind other industries, but with customers now considering ease of use highly important, it’s time to introduce technology to remove complexity and provide a consistent experience across every touchpoint.
4. Insurers are no longer just in the business of insurance
Insurance companies are starting to provide non-insurance services that are natural extensions of their core products, allowing them to be more immediate and relevant.
Almost two-thirds of insurance firms are testing smartwatches and wearables
More than one-third have deployed telematics
Many are providing home security systems
More than 55 percent are investing in speech recognition and blockchain.
5. Change can’t wait anymore
Almost half (48%) of insurers fear that up to 20% of their business could be lost to standalone FinTech companies within the next five years.
The world of insurance traditionally has been the tried and tested and the slow and steady. But aggressive InsurTech disrupters means maintaining the status quo is no longer an option. Any insurance company that relies on old software to implement a new digital strategy is unlikely to walk away the winner. What’s required are systems that allow them to test ideas rapidly and at low cost, alleviating risk and making them more agile.
Older technology that users have learned to navigate won’t appeal to younger customers who expect a great User Experience (UX) as standard. Speed of response, ease of navigation, and the way websites handle personal information are critical to an industry like insurance where trust matters.
The top companies leading in UX outperformed the S&P index by 35%.
7. Personalization is no longer just about using your customer’s first name
From the call center to product development teams, insurers are using flexible front-end technology and analytics tools to collect data, profile customers and provide them with products and services tailored to their specific needs – true personalization.
18-34 year olds expect technology to deliver experiences that are customized to their own personal needs and tastes.
At the beginning of 2009 there were:
- No iPads
- No Uber
- Only 23% of the world had access to the internet
- It took longer to download a movie than to watch it
With this pace of change there is no way to predict how you will need to respond. The solution is to prioritise adaptability and scalability of systems and software. Supported by newer more adaptive technology, insurers will be able to transform their businesses:
- Driving expertise in digital sales and support
- Reducing internal costs
- Redefining products and processes to control claims costs
- Streamlining your business, and ditching the anchors