Insurers cannot simply rely on brand loyalty: Customers want frictionless, fast solutions..

Unbelievably it is 15 years since Netflix first started streaming films and 13 years since Uber launched its ride hailing platform. They were the original digital disruptors of established business models; their platform-based offerings delivered an engaging, frictionless customer experience that set the bar high. Now they, in turn, are being disrupted by younger businesses. The pressure is always on to innovate, differentiate and meet ever-higher customer expectations of positive, enjoyable interactions.?

The financial sector is close to facing its ‘Uber moment’. Last year’s revelation that banking app Revolut’s value had surpassed that of NatWest was eye-popping but, it’s the modern business person’s paradox. The more we adopt technology to facilitate remote working and find that elusive work/life balance, the more value we find in face-to face gatherings where we can network, share knowledge and inspiration and take the temperature of our industry. Three of the most pressing issues include:?

The dynamic relationship between insurtech startups/ scaleups and established businesses. The thinking shifts constantly in this area but big players are keen to learn how to spot emerging technologies that will have a future impact on the insurance sector. And, once spotted, they must learn how to evaluate whether to partner or take a stake in an innovative entrepreneurial business versus buying outright before a competitor spots the opportunity? Finally, how can you know which vehicles aid investment? Do you go the way of Willis Towers Watson and launch a specialist division to invest in emerging digital and technology businesses??

Embedded insurance. The bundling of insurance cover within a product or service is not new but developments are coming thick and fast, ranging from new distribution channels aided by technology to increasing consumer acceptance of this model. This has a significant impact on future relationships for INSIGHT Insurers cannot rely on brand loyalty: customers want frictionless, fast solutions.?

As the financial sector comes close to its 'Uber moment'. Those counting on brand loyalty to retain business are going to be disappointed It’s the modern business person’s paradox. The more we adopt technology, the more value we find in face-to face gatherings in a way, not surprising. Revolut, Monzo et al have been nibbling at the lunch of the established banking brands for a while – it was only a matter of time until they took a bigger bite. These developments should ring alarm bells for legacy insurance businesses to speed up their response to changing customer behaviours before they are outmanoeuvred by the nimble strategies of technology-driven insurance brands like Wefox or Zego. Covid accelerated the challenges facing the traditional insurer. Customers in lockdown wanted quotes and had queries about health, auto and travel insurance – not to mention cover for all those new pandemic pets. Most importantly, they wanted these queries answered as quickly and painlessly as possible. Insurers operating from physical offices have a heavy overhead to carry and had to try to switch services needing a face-to-face meeting to new channels. Those with a fledgling online presence found that scaledup demand put systems under pressure and the provision of a customer experience based on joined-up data extremely difficult. Those counting on brand loyalty to retain business are going to be disappointed. Customers now value speed, efficiency and transparency – no hidden costs or T&Cs please. And they want to be recognised – the frustrations of continuous box ticking and form-filling every time they return for a renewal or to query their new premium won’t wash. Future winners are planning ahead and using tech to reveal efficiencies and get closer to the customer. The wisest know they can’t do it alone and are working with partners to navigate all the possible pitfalls of a digital transformation programme. Benefits include greater consumer accessibility and lower prices – but there’s a fierce debate around surrendering the insurance product to a third party. Ultimately, will direct sell fade away??

Automated underwriting. Automated processes are increasingly embraced by the insurance sector but questions remain around how much of the underwriting task to hand to AI/machine learning. Standardised formulas for every eventuality are still difficult to devise, so should automation be a tool to augment human judgment and assessment or is the human element necessary at all??