Insurtech and Customer Services: Lessons for the Incumbents
The emergence of insurtech has been fueled by new digital capabilities and Internet of Things (IoT) devices that are reducing costs, changing systems and processes, and enhancing the consumer experience. From an industry burdened by outdated systems and paper-based operations, the insurtech space has emerged as one of the largest innovation ecosystems globally in 2016, and is set to modernize the industry in the years going forward. It has taken a while for banks and insurance firms to fully embrace fintech innovation, due in part to the amount of legacy systems in place, the heavy dependence on historical data, and the low risk appetite for new insurance-related products at most traditional firms. However, rapidly changing customer behavior, the availability of smart devices, and innovation ecosystems achieving scale provided the industry with a much-needed push in 2016 (and beyond) to adopt insurtech in a huge way.
- Consumer behavior has shifted to accentuate the sharing economy, and the products/platforms that best encompass these new behavior patterns are likely to be the most successful.
- One of the largest emerging areas within insurtech in 2016 was the development of apps and devices that monitor how consumers behave and make purchases, mainly driven through IoT.
- Policy management is a key theme stemming from most new insurtech developments, enabling consumers to personally manage and take more control of their insurance dealings.
- Start-ups are encouraging consumers to move away from traditional insurance practices through the introduction of peer-to-peer (P2P) platforms, where liabilities and risks are managed by the individual(s) instead of the insurer.
“Insurtech and Customer Services: Lessons for the Incumbents” provides an in-depth analysis of recent developments in the insurtech space and the impact on the insurance industry. The report discusses how mainstream insurers are embracing new technology and how these new innovations could revolutionize many of the long-standing systems and processes within general insurance. It also looks at how insurers could benefit from the types of propositions offered by these new tech groups and the opportunities that may exist in the form of partnerships.Reasons To Buy
- Gain a detailed insight into the insurtech space.
- Discover how insurtech is benefitting mainstream providers, and also the potential limitations.
- Be informed of the insurers investing in the technology and those looking to develop new digital/tech-based propositions.
- EXECUTIVE SUMMARY
- Insurtech groups have made it difficult for insurers to ignore the tech revolution
- Key findings
- Critical success factors
- HOW INSURTECH IS RESHAPING THE INDUSTRY
- What is insurtech?
- Insurtech encourages the use of technology to help connect with customers
- The IoT can boost consumer engagement with brands
- Insurtech is being used to meet the changing needs and expectations of modern consumers
- Insurtech encourages disintermediation and automation in the customer relationship
- Insurtech encourages consumers to take insurance matters into their own hands
- P2P models provide users with the option to bypass traditional methods
- Lemonade entices P2P users with the prospect of making charitable contributions
- P2P services remove some of the power and authority from the insurer
- Guevara encourages motor insurance customers to pool their resources for protection
- Speed and convenience must be offered to modern consumers
- Learning from the PFM evolution, insurtech offers improved insurance management
- Established insurers are developing their own ventures to invest in digital
- Aviva's commitment to new tech is to avoid falling behind
- Insurers' commitment to tech must ultimately bring them closer to the customer
- Incumbents need to correct the basics before they can truly modernize and move forward
- The launch of AXA's tech-focused funding initiative will help with market expansion
- Insurers would benefit from augmenting existing capabilities with strategic relationships
- Insurers run the risk of competing against insurtech if they fail to embrace it
- The future is promising, but a consistent approach to insurtech disruption is required
- Abbreviations and acronyms
- List of Figures
- Figure 1: IoT refers to the connection of smart devices with other items embedded with electronics and software
- Figure 2: Metromile offers low-cost pay-per-mile insurance for low-mileage drivers
- Figure 3: CoverHound enables users to compare the rates offered by leading insurance providers
- Figure 4: Lemonade invites users to form small groups of policy holders who pay premiums into a pool to pay claims
- Figure 5: insPeer looks to reduce premiums by raising deductibles and laying off risk on the other participants
- Figure 6: Guevara customers collectively share available resources (but also costs and damages) in the event of a claim
- Figure 7: Cuvva enables the purchase of short-duration car insurance via a smartphone
- Figure 8: Trov enables users to record and keep track of the value of their personal belongings
- Figure 9: BIMA Mobile utilizes new technologies to provide insurance to emerging markets