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Next Generation Products and Services: How Insurers are Innovating Right Now
From day-to-day operations, to the very relationship between insurers and policy-holders, it is no exaggeration to say that connected insurance represents the biggest potential for transformation that insurance has witnessed since the invention of the computer. See, for example, the ability of an insurance carrier to react to live data, in real time, and prevent a loss from occurring. From simply mitigating the effects of a loss, they now become partners in risk-prevention.
The current focus on connected product development is rooted in the need to achieve customer-centricity. In an increasingly competitive, technology-driven market, insurance carriers must continually innovate to deliver connected products and services that resonate with customers and provide what they need, rather than what the insurer can offer. Likewise, as technology develops and the digital distribution of insurance products increases, product development itself must become similarly agile and responsive.
Squeezed between decreasing profit margins, increasing customer expectations and greater competition, however, all insurance companies find themselves in a potentially make-or-break position; innovate or die.
Yet while technology represents insurers’ best chance at outstripping competitors in terms of product development, efficiency and customer experience, with so many new technical possibilities available (many of which are relatively unexplored), there is also ample opportunity for them to overspend and underdeliver. To provide some clarity, Insurance Nexus recently interview over 300 executives to understand where insurance companies are concentrating their efforts to improve connected product and service innovation, who is responsible for these projects, and how things are expected to progress in the future.
In the course of our research, it was striking to note the degree of importance with which executives are now viewing connected insurance innovation. 50% of respondents believe that CEOs and Heads of Strategy must take the lead in connected product development; a clear indication that innovation is rightly regarded as an enterprise-wide undertaking.
Our results also suggest that insurers recognise the scale of these projects, and that in many cases, they do not have the required competencies in house; 54% confirmed that leveraging the expertise of external technology partners and insurtechs has been of greater value than relying solely on in-house talent.
On the subject of departmental collaboration, the results show that data and analytics departments feature heavily in connected product innovation. This is significant principally because the success of the AI and machine learning systems that underpin so much of connected products, is predicated first and foremost on data, both volume and quality. If insurers can maximise the potential of the data they already posses and then intelligently insert aspects of AI (as opposed to hastily implementing an AI system and feeding it on poor quality, invalid or disparate data), they will see the greatest results.
One particularly eye-catching statistic was that over half of respondents claim that their most successful channel for communicating product development and new services is by word of mouth. Although initially surprising to us in the digital age, this will be of great comfort to marketing teams everywhere since it tends to support the idea that product development should begin with the customer and their needs. If those needs are met, customers are showing themselves willing to become brand ambassadors themselves, a particular boon to insurers in such a saturated marketplace.
- Which technologies are insurers embracing and actually integrating into their everyday procedures and products? Including AI, ML, Data Analytics, Automation and IoT
- Where are insurers prioritising investment? Operational efficiencies and internal procedures or customer-facing UX Technologies?
- Proven internal blends of skill sets that drive transformation forwards- including leadership buy-in and recruitment initiatives in IT and Data Analytics
- The incorporation of external technology experts and insurtech that supercharge what you can offer your customer
This infographic was created in association with Insurance Nexus’ upcoming Connected Insurance Europe Summit, taking place 15-16 May 2019, at the Novotel Amsterdam City Hotel, Amsterdam, The Netherlands. Welcoming over 350 senior executives from across departments, the event will provide organisations with the necessary strategies and insights to transform each core pillar of product development, strategy & innovation and communication of value to the customer. For more information about Connected Insurance Europe, please visit the website, https://events.insurancenexus.com/connectedeurope/, or get in touch.