“Times change, and we change with them.” A simple little quote, that has the power to create very different types of emotions in people – especially in a business context and considering the huge changes the digital transformation is bringing to the table.
After all: Customers nowadays are more and more used to enjoying a certain kind of flexibility and availability. And if companies like Amazon are able to offer their service anywhere, anytime, and tailored to the clients’ individual preferences and needs, why wouldn’t that be possible for (almost) every other business sector?
Some industries had to face these changes from very early on – like the media or resellers. Others however have long been able to duck away and consider themselves “safe”. Like the insurance sector. But those times are over. That may sound like a threat, but in reality, it’s a huge opportunity.
In fact: pushing digitalization as an insurer can prove to be a win-win-win-situation:
- happier customers
- higher growth
- lower cost
Leveraging on new technology, and the data and analysis it makes available, enables insurers to get to know their customers better than ever before. By that, they are not only able to provide better, tailor-made offers, but can also identify fraud much quicker and with higher accuracy.
Additionally, analyses could show the need for entirely new products. Especially, as the digital change is also bringing along new risks to companies and private persons alike: the increasing fear of data loss or the trend towards sharing (AirBnB, Carsharing, etc.) for example.
And finally: implementing and leveraging on new technology for automation, using AI-fueled solutions, creates massive, quantifiable savings. McKinsey has it at 30%. We at omni:us see efficiency and cost gains that are far greater.
The Enemy at the Gate:
But there are external reasons too, why insurers should start innovating sooner rather than later. For starters, there is a societal shift towards preventing risk rather than insuring against it (active driving aids and the development of autonomous cars, smart homes that automatically detect damages and react to it, wearables that keep track of our vital functions, etc.). Also, the industry is no longer regarded as impregnable: Money is pouring in. McKinsey reports that in 2015, Venture capitalists globally invested $2.6 billion in insurtechs, followed by another $1.7 billion in 2016. And the results of some of these investments – potentially disruptive insurance-solutions – are already here and gaining traction: take Lemonade, Hippo and PolicyGenius for individual insurance and CoverWallet, Embroker, and Insureon for business insurance for example.
So to summarize: The market is changing, customer expectations are getting higher, the competition is getting tougher and the technology behind it all is highly complex … but there are also potentially very lucrative opportunities to be found. Especially if you are working with the right partners, of course … like omni:us. If you’d like to know more: Don’t hesitate to get in touch with me.