InsurTech (Insurance Technology) is a hot topic in the insurance community these days. But how significant is this trend and how urgently do we have to respond? We think that the recent Insurance-Canada.ca Executive Forum (ICEF2016) provided insight.
What do we do and, when do we do it?
Writing in PropertyCasualty360, PwC analysts, Jamie Yoder and Javier Baixas note that the 3 biggest drivers of change to insurance are:
- Customer Expectations
- Pace of innovation
- InsurTech Startups
Together these elements create a leveled playing field where data acquisition and analytics provide the ability for new players to compete with established insurance organizations. The net result is greater leverage for the consumer.
Yoder and Baixas advise the incumbent entities to shift their focus to InsurTech:
In a time when societal changes, technological developments and empowered customers are changing the nature of the insurance business, established insurers need to determine — with all possible haste — how InsurTech fits in their strategies.
If done intelligently, the authors suggest that “the growing presence of InsurTech companies is not a threat, but rather a game-changing opportunity for insurers.”
So it’s urgent. But execution might be easier said than done. A recent research report from SMA Strategy Meets Action – Customer Engagement at the Digital Edge in Insurance – found that:
- 79% of insurers are actively engaged in redesigning the customer experience.
- 65%, however, have limited awareness of evolving digital ecosystems and the impact they will have on customer acquisition and engagement.
At the ICEF2016, practitioners, anaytsts, consultants, and suppliers provided guidance to help insurers and brokers balance the deep complexities of the insurance product and the consumers’ expectations with the urgent necessity to understand and employ digital technologies. Here are some examples.
It is just business …
In his keynote presentation and during a subsequent panel discussion, Global Technology Executive, Joseph Cooper, made the point that digital transformation must begin with the a customer experience strategy that is owned by the business. In addition, as much as we seek digital solutions for customers, we must be mindful of the employees’ expereince and have a program for continuous improvement of back-end core systems.
The cultural shift
Ben Isotta-Riches, CIO, Aviva Canada focused on the need for a significant cultural shift within the organization in order to complete with ‘born digital’ companies. Key cultural changes include:
- Moving the centricity from Product/Underwriting to Customer Experience
- Increasing responsiveness to meet customer expectations
- Shift technology focus from a drive for efficiency to leading the evolution of the busienss model.
As with Joe, Ben focused on talent acquisition and support. This includes hiring and managing true talent, putting talent to work in small teams, and increasing creativity by promoting cognitive diversity.
Ben’s final exhortation was the need for leaders to model the behaviour you want to see because “You are the culture:”
Disrupt or be disrupted
Economical Insurance introduced Sonnet insurance, a direct to consumer organization earlier this year. Two senior vice-presidents – Alice Keung, CIO and Michael Shostak, CMO – operated as co-leaders, brought the program from concept to fruition, and shared their experiences.
With over 140 years of successfully serving their clients, the Economical determined that new customer segments would not be well served and came to the conclusion that it had to ‘disrupt or be disrupted.’ Keung and Shostak described the three critical components at the heart of the disruption:
- Unmet customer needs
- Enabling technology
- New business models
The result is a fully digital experience based on self service. The critical element is to utilize third party data and analytics to dramatically reduce the time required by the client to produce a quote, bind a policy, and effect service requests.
But there are times you have to talk….
There were a number of other sessions which included new technologies, business models, and case studies. There were active panel and Q&A sessions. And a lively discussion at the reception following.
So the last lesson learned is a bit ironic: In spite of all of our investment to develop and deliver digital services, sometimes we need to talk in the old analogue way.
Editor’s Note: If you are interested in disruption, this will be the focus of the 2017 Insurance-Canada.ca Technology Conference, 28 February 2017.