Disruptions in InsurTech
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What’s common between BIMA, Trōv, Quantemplate and Slice, in today’s time? Two things. The first is that all these companies came into being only after 2010, and second, despite that fact, they have managed to become extremely popular in different geographies in the Insurance space. Says enough about the value of disruption, right? In a digitally transforming world, disruption has almost become a success metric to track, and this is true especially for traditional industries and businesses.
New age transformations necessarily do not mean letting go of legacy systems all at once, but evolving with sophisticated technology, steadily. Not slowly. Slow and steady may not win the race anymore! With incumbent tech adaptations becoming a norm, it is not just the functioning of the business, but its nature also, that will change.
Tackling the Need of the Hour
The important thing to note is this: just adopting tech does not guarantee success. It is always the core consumer need that brings about sustainable palpable shifts, and today’s need is omnichannel presence. The insurance industry today has a much lesser volume of insurance shoppers than a decade ago but is also driven by consistent competitive pricing, which makes things tricky. Omnichannel experiences along with front-facing, customer-centric policies are emerging as differentiators for insurance providers, since customers need insurance on the go. Most InsurTech companies are also focusing additionally on sales and marketing to gain the consumer’s attention. Enabling seamless omnichannel strategies is no easy feat, and it’s important for InsurTech providers to complete their homework before embarking on this journey. Where should you begin, when thinking digital? Do you need a new IT system altogether? Can heritage and innovation go hand in hand? Can you take this one step at a time, or do you need to multitask? All of these are some core questions that need to be answered before making promises about new age experiences, otherwise, you might find yourself in a mess.
Changing Roles in InsurTech
McKinsey states, that going ahead, insurers will play more of a risk avoidance role, as compared to that of a risk mitigator. Cars come inbuilt with sensors to prevent accidents, artificial intelligence and machine learning-driven algorithms play a massive role in predicting personalized premiums for consumers, and data analytics-enabled microservices is making the rounds with customers who can’t afford to spend too much. Digital underwriting processes coupled with data have enabled organizations to automate value supply chains. Insurance has always played upon consumer risks, but the fact of the matter is, that in today’s digital age, the risk itself has changed. A sharing economy adds to this, as with platforms like Uber and Airbnb, a car owner becomes a taxi driver and a homeowner becomes a hotelier. In such a scenario, we can’t have setups with one-way communication, where agent-consumer interactions are limited to only claims settling and premiums. The insurance agents of the future will need to stay on their toes, as they dabble with new age tech to create experiences that can wow the consumer.
Collaboration as the Future of Insurance
What’s the most crucial factor that makes for a lasting agent-consumer relationship? Trust. Can that trust not build strategic partnerships for InsurTechs as well? In a rapidly evolving industry, innovation cannot be a choice anymore, it has to become a core business capability, and often, these innovations need support. Partnerships can help insurance providers come up with new policies, gain expertise and build IT ecosystems at scale. For instance, wearable technologies in healthcare has already left a significant impact on the stakeholders utilizing it. Tying that in with an insurance framework will be mutually beneficial for both, the healthcare provider, as well as the insurance company. Tech companies specializing in cybersecurity can also collaborate with insurance providers to boost risk analytics. Essentially, customer journeys can be redesigned, more perspectives can be explored, and personalized expectations can be catered to. Pretty exciting!
All in all, the key to staying ahead of competition is to not consider yourself a player in just your own sector. A consumer’s expectations from InsurTech providers today is no different than one they have from an Amazon. Keeping the benchmark high is important, and the higher the benchmark, the more room for innovation there will be!