Transforming to secure the future in the Insurance Industry
The pace at which insurance distribution is transforming is accelerating. New competitors with novel offerings, and a steady flow of technological innovations, are reshaping customers’ expectations and changing the traditional insurance landscape. To remain viable, insurers too must change. Some carriers are responding with conviction. Others are more tentative, hoping the wise course of action will become obvious in time. Many are reacting to the disruption by seeking to defend their legacy business and distribution models. Their more successful peers are becoming disruptors in their own right. The one thing we know for certain is that the insurance company of tomorrow will be different than it is today. Transformation is inevitable. The question facing every insurer is: do we dictate the nature and pace of our transformation, or do we allow others to set the agenda?
To be seen as a desirable partner, carriers need to enhance their credentials: improve their digital capabilities, optimize their architecture for cross-sector integration, and develop their partnering skills to secure a favorable role in their ecosystem of choice. Large carriers with strong brands and wide product ranges have a built-in advantage, as they are able to offer more to the group. Those with strong capabilities relating to customer-centricity, customer data management and contact centers will also be welcomed. These attributes will be important counters to the perception that insurers lag their ecosystem partners with regard to innovation, and customer trust and service. Carriers with a heavy dependence on agents also have to overcome the assumption that their service capability lacks industrialization. The ability to demonstrate a high degree of customercentricity and advanced digitization will not only increase insurers’ chances of participating in the more powerful ecosystems, but will gain them a more prominent and influential role. In defining the role that insurers will play in ecosystems, four key questions are critical:
- Whose brand will own the customer experience?
- How broad or narrow will the offer be – will it be just indemnification, will it include protection, or will it be something even broader?
- Who will have access to the customer data and insights that can be derived from the customer experience?
- What are the competitive dynamics? Will there be a single insurer in the consideration set or more than one?