Key Shifts Mark the Path to Digital Insurance
Empowered consumers, innovative competitors and new technologies are bringing massive changes to the insurance industry. Instead of selling the same old indemnification products through a network of traditional agents, insurers must now create an entirely new set of products that inspire customer demand by anticipating and holistically addressing real customer needs and wants. These products must be simple and flexible enough for customers to evaluate, tailor and purchase through any channel, including online. To do this, insurers will need to develop their own ecosystems of partners and value-added service providers, easily consumed through the insurer’s digital platform. They’ll also need to tackle, once and for all, their legacy business and IT landscape and gain control over a vast IT estate that must keep pace with the business.
WHY BUSINESS-AS-USUAL, ISN’T
Like watching storm clouds gather on the horizon, insurers have seen change building over the past few years in their industry. The same advances in technology that upended music, publishing, travel and other industries are pushing their way inexorably and forcefully into the insurance market.
Consumers, who’ve come to expect a highly personalized, self-directed shopping experience followed by instant fulfillment, are looking for the same service from insurers. And competitors, emboldened by the disruption and ahead in adapting to the new reality, are entering from many different industries — financial, retail, automotive and more.
Regulation and a conservative business approach have caused insurers to adjust slowly, but outside forces are now bringing to reality the full effects of this transformation-in-waiting for the insurance industry. The shifts that are now taking place affect every aspect of the industry value chain. In the near future, the insurance marketplace will look nothing like the one of the past.
The tools of the digital economy — largely based on open source software and commodity hardware — give new digital insurance players the ability to rapidly try new products, instantly market and scale those that work, and quickly eliminate those that don’t.
In this environment, insurance companies that insist on hewing to traditional business models will find themselves marginalized. A policy-centric, siloed business approach isn’t fast, isn’t flexible and won’t be profitable enough to effectively compete. While there seems to be no end to the changes and challenges insurers and their employees face, there is good news.
Companies that understand and respond to changes in the industry have the opportunity to capture new growth opportunities, control infrastructure costs and lay the foundation for a more dynamic and profitable future as a digital insurance company. The shift to digital insurance is a transformational journey that will ultimately lead the insurance industry to redefine its basic value proposition from one of simple indemnification of loss to one of education, enablement, mitigation and continuous value.
Download the complete position paper to learn:
- How consumers, competitors and technologies are reshaping the industry
- Why leading insurers are shifting their focus from policies to customers
- How data analytics is transforming the industry
- How new partner strategies are helping insurers align with today’s digital business