When you embrace digital insurance, you are rewriting your company. You are reengineering processes. You are using data in new and creative ways.
Talking about this very topic at the recent 2016 LIMRA Life Insurance Conference was Kimberly Harris-Ferrante, vice president and analyst at Gartner.
She reminded attendees that digital insurance requires overcoming challenges of existing business models. Just a few of those challenges include: lack of product innovation, technology inadequacy and low consumer loyalty.
“In our industry, how many products over the last 10 years have been really innovative?” asked Harris-Ferrante. “Consumers aren’t excited about us.”
She reminded the audience that the insurance model of 1990, which is still very similar to that of 2015, will not suffice in the market of 2020.
So how does the industry catch up? One of the ways is through data.
“Data is one of our most important assets, and also one of the most underutilized assets,” said Harris-Ferrante. “How do we more effectively and strategically use data in our organizations?”
According to a survey of conference attendees conducted by Garnter before the start of the conference, big data/analytics was the number one trend that will have the greatest impact on the industry in the next three years (say 79 percent of participants). Other important trends noted were:
- Digitization (78 percent)
- Consumer adoption of mobile technologies (77 percent)
- Greater need for cybersecurity (67 percent)
- Growth in e-commerce and direct-to-consumer sales (65 percent)
- New and potential regulatory threats (59 percent)
- Threats from non-traditional competitors (51 percent)
“It’s interesting to note that direct-to-consumer, or digitization, has popped to the top, this is much different than a few years ago,” said Harris-Ferrante.
Digitization requires customer-centricity, she noted.
“You need to have a single view of the customer, one that tells you behavioral preferences, transaction history and channel of choice.” You also need:
- Customer analytics
- Customer involved crowdsourcing
- Customer communications management
- Customer experience management
- Multichannel integration
- Customer-centric product design
As Ferrante-Harris noted, there is heightened focus on improving insurance company websites, “but they’re still elementary/.” She added that there are basic improvements, but the technology is not totally interactive.
“You have to ask yourselves, are we trying to be as good as other life insurance companies or are we trying to be as good as other companies?”