Insurtech questions

September 24, 2018

Insurtech and the Great Blue Yonder… Really? – Part III

2 min read


A series of 3 articles looking at technology within insurance, where it is now and where it needs to go… (Go to Part 2).

It’s all about insurtech … isn’t it?

So let’s go back to the original question – where do we go from here? What does “good” insurtech for the ordinary insurance customer actually look like?

I’ve suggested 5 broad aspects that the “ideal” application of insurtech needs to bring – simplicity, competitive pricing, a hassle-free offering, providing relevant products and the ability to interact on-demand.

The point here is that this is nothing new, and we can set “insurtech” to one side for a moment…

Only Make Change That the Customer Will Notice … and Appreciate

In fact, these are all characteristics of a really well-run “traditional” insurance business today. If you can hit many or all of those aspects in what you’re already doing, then you will already be seeing higher-than-average retention and greater customer loyalty than the rest. Even if, for example, 24/7 on-demand interaction is a stretch, technology and services already exist to help you give the impression that you can be on-hand to help day and night.

If that is what customers demand of a modern, 21st century provider of services then even without huge investment in technology, or abandoning everything you have ever done, there are ways you can deliver on what customers need today.

Even looking ahead over the next 5-10 years still doesn’t mean that you should drop everything you’re doing now and invest hundreds of thousands of dollars in some new piece of tech. For example, simply developing “an app” (which seems to be what a lot of BMS providers are offering at the moment as an extension) doesn’t mean that your customers will use it – neither does it mean that they’ll stay longer with you, or pay you more for the convenience.

You need to think about what your customers currently buy from you, and how you effectively force them to interact with you to do so. Find out by asking them how easy you make things, and how your service makes them “feel”. At least that way you will get a really good understanding of whether “an app” is suitable, and a realistic expectation of what technology may or may not be able to deliver to your business.

It’s exactly the same as the rest of the insurtech industry. Unless we understand how we can make our customers’ insurance lives materially better on a day-to-day basis and use that as the sole focus of the tech we’re developing, whatever solution we build will be a monument to technology that nobody uses.

Is Alexa Now the Devil in Disguise?

For example, the name that everyone fears to mention in connection with insurance at the moment is Amazon. What if Amazon moves into insurance? What if you could just utter a few words to Alexa about you needing to renew your auto insurance, she gets you a quote in seconds and you can simply say “Alexa, buy it” and you’re on cover? With all the data that Amazon has on each of us, the brand recognition and trust, how could that fail to be a game-changer for pricing, packaging and buying (any kind of) insurance?

If you apply those 5 broad categories that result in a “meaningful difference” to customers, I’d have to agree that the Amazon/Alexa idea has the potential (with caveats) to smash pretty much every one of them out of the park … so long as, for example, what they were offering was a comprehensive auto or home solution that meant you didn’t have to go anywhere else to insure the bits they were missing out. Otherwise, even with Amazon, what would be the point?

So at one end of the scale you have the (sometimes) most valuable business in the world, Amazon, and at the other you have supplementing your current insurance service with a chatbot or other service after hours to give that “always-on” impression. And there we have the conundrum with insurtech. It can range from the most spectacular, to the most straightforward … but what they should both have in common is that it delivers on making a customer’s life easier. Both can fail just as easily as they succeed if you don’t understand what customers really need, and you can actually understand that without insurtech at all. For now…

Of course, this is all subjective – what role do you think insurtech could play for your customers and who, in your opinion, is likely to deliver it? A traditional insurer or a tech/data company like Amazon or Google?

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