Time to get serious

Time to get serious with InsurTech

Ronny Reppe, chief executive officer of Norway-based insurance platform provider Noria argues that as we approach the end of the globe’s second year of the pandemic, businesses are starting the journey to recovery but must realise they are one failed project away from disaster. Insurers have to take InsurTech very seriously right now

As the global community slowly shifts into the next phase of post-pandemic recovery, there are three key trends in InsurTech to keep abreast of ahead of 2022. At the same time, there are risks that could cause insurers to fall behind their competitors if they are left unmanaged.

INSIGHT ANALYTICS

In my experience, there’s a vast difference between blind trust and the emerging concept of “digital trust”.

Blind trust involves a customer placing complete faith in an insurer’s ability to manage their affairs and act in their best interest. It is blind because typically, customers in the past had no idea what data the insurer was working with or how they reached decisions.

On the other hand, digital trust is earned by providing radical transparency; sharing data rather than hoarding it. Today, stakeholders including customers, underwriters and claims handlers increasingly expect insurers to provide them with complete and constant access to useful information to boost their ability to make better decisions.

As PWC writes (‘Digital Trust: Protecting and realising the value of digital assets’) digital trust is about protecting and realising the value of digital assets, including data.

The trend I have observed as we move towards 2022 is that customers are increasingly impatient with insurers that, first, make them wait for information, and then provide information in a non-user-friendly format.

Customers want 24/7 access to useful information, which is why a self-service approach is usually best. Customers don’t want to arrange a meeting with an insurer to have their questions answered. They don’t want data dumps or spreadsheets. They want to be provided with valuable and actionable information in an easy-to-comprehend format, based on advanced analytics of real-time data.

Through advanced data analytics, insurers can access better information about an expected claim to help them not only provide a more exact price, but help prevent future claims by providing customers with advice on risk minimisation.

The digital customer journey

“If insurers intend to improve the digital customer journey at scale, they must take a self-service approach. This means providing customers with customisable dashboards featuring realtime information on loss prevention and other valuable data.’’

RISE OF THE INSURANCE ECOSYSTEM

Ronny Reppe, Noria Software

Will 2022 be the year of the insurance ecosystem? Improved data-integration and increased digital trust have led to the growth of digital ecosystems between the broker, the insurer and reinsurers. These ecosystems enable better interaction with partners, customers, and other stakeholders such as regulators. It pools the industry’s most valuable resource: customer data.

McKinsey defines an ecosystem as “an interconnected set of services or products that allows users to fulfill a variety of needs in one seamless experience” (‘Ecosystems and Platforms: How insurers can turn vision into reality’).

This is achieved by creating partnerships across industry boundaries to bundle together digital offering and provide customers with an end-to-end experience. Stocking an ecosystem with additional products and services beyond the core insurance offering will generate new customers and increase existing customer loyalty.

scale, they must take a self-service approach. This means providing customers with customisable dashboards featuring real-time information on loss prevention and other valuable data.

Through the power of advanced analytics, hyper-personalisation (Deloitte: ‘The future of retail banking. The hyper-personalisation imperative’) will enable insurers to deliver dashboards that are highly relevant to customers’ individual needs, boosting the customer experience and increasing customer engagement.

An effective dashboard could add value through the provision of an analytics tool that shows how their insurance risk benchmarks with the rest of the world, along with advice based on those benchmarks. This is in addition to insurance basics: providing clients with certificates, policies, billing, and claim capabilities, access to user-friendly admin forms, and the ability to maintain assets in their portfolio without having to call the insurer.

Self-service tools should be seamless, user-friendly, highly intuitive and require no training to use.

Building a self-service solution will not only improve the customer journey but can provide vast efficiency gains for insurers. Keep in mind, however, that a digital dashboard should not replace the human touch in customer communication.

RISKS

While the potential of the above trends is exciting, there are several risks to watch for when implementing major digital initiatives such as building a digital ecosystem or creating a hyper-personalised self-service portal. These risks are centered around poor data maintenance, ineffective talent strategies, and taking a non-agile approach.

FAILING TO MAINTAIN DATA

According to Gartner (‘How to improve your data quality’), poor quality data costs organisations an average of just under $13m per year. With data quality directly linked to the quality of decision-making, poor data maintenance in insurance will inevitably result in poor business decisions, sub-quality advice to customers, inexact pricing, and a failure to reduce the number of future claims through predictive analytics. Together, these consequences can shatter the trust built