Insurance carriers of the future have a diverse and intertwined set of risks to manage, but there are abundant opportunities too for those which put societal needs and customers at the heart of risk models in the future, according to a new whitepaper from Reuters Events, titled Next Wave Insurance: Daring to be Different.
“Make no mistake, the multi-trillion-dollar global insurance market of the future will be different,” say the whitepaper’s authors.
“Things are evolving so rapidly in the digital space, the risk is that if you’re wrong today, 24 to 36 months from now, you’re going to be way behind,” they add.
Shifting customers’ perceptions
The paper states that insurers today are grappling with the effort to shift customers’ perceptions away from seeing insurance as a grudge purchase. They are also needing to ease experiences for clients, agents and brokers alike – an effort that “needs to be unpacked and prioritized,” they write. “Traditionally the customer relationship has been left for agents and brokers to manage.”
One of the paper’s contributors, Liberty Mutual recommends companies take a technology agnostic approach. “This allows us to be far more specific about the experiences we wish to drive,” says the company’s vice president and senior manager of digital transformation, Sandeep Haridas.
The paper also reviews trends, including the emerging demand for usage-based insurance, the trend where an increasing number of consumers say they are more likely to consider buying insurance from online service providers like Amazon or Google, and surveys which show that more consumers want pricing transparency.
To improve processes against this backdrop, the paper recommends insurers separate customer experience efforts from work on core systems. “Implement experience layers on top of core systems,” they write. The paper also recommends companies reframe their thinking, test quickly and test often. “Nobody has the perfect answer the first time around.”
Finally, they say it is necessary to bring teams together to develop what the customer needs, adding that building such solutions is no longer the exclusive purview of the professional developer.
Balancing build and buy
“A key decision for any carrier is whether to buy or build in-house,” they add. “Through a thoughtful balance of build and buy, your organization can continually evolve, upgrade and innovate.”
They conclude saying it is clear that companies are taking the customer’s experience seriously, but add that given the current climate and circumstances, insurers need to do more than simply pay lip service to the needs of their customers. “Carriers must first and foremost decide and define how and why they are different. This is a vital step in knowing what digital, customer-centric products and solutions to build,” they state. “Streamlining processes and partnering wisely will be vital because change is inevitable, and insurers must be quick.”