We all are aware of the disruption the insurance industry is experiencing especially from all sides. A significant challenge of adapting to the new normal has come up after the COVID-19 outbreak, and insurers need to find more ways to deal with it. Besides, the growing competition in the market (that was already there before the pandemic) increases the difficulty of thriving in today’s demanding market. Above all, they have to deal with the changing demands and expectations of the customers.
Several questions have been unanswered in the previous months; however, let’s read what industry experts say about how insurers can stay relevant in an era of disruption.
1. Adapt to the Evolving Digital Landscape
John Holloway, Co-founder of NoExam
Traditional insurance companies will need to look to partner with or invest in new startups that aim to disrupt the market. We have already seen this happen to an extent, but we have yet to see a new company really disrupt the insurance market in a wide-spread way.
Insurance companies have the capital, but they will need to stomach a bit more risk on their balance sheets in the form of partnerships and investments if they want to stay relevant. Disruption is coming; it is just a matter of when.
At a minimum, insurance companies need to invest in the digital experience from mobile apps to easy to use websites to streamlined digital communications. Consumers have reached a point where they will not tolerate frustrating online shopping experiences. The time has long since passed to adapt to the evolving digital landscape.
2. Embrace Technology
Tal Shelef, Realtor and Co-Founder of Condo Wizard
Insurers should embrace technology when aiming to stay relevant in these harsh times. Reach out to customers and maintain relationships through digital campaigns. Aim to provide the information they would find useful and relevant to help keep their interest. By doing so, insurers are not only showing customers that they care, but they are also distributing necessary knowledge and actions needed to help beat out the pandemic.
3. Utilize Data and Have a Customer-Centric Approach
Adrian Mak, CEO of AdvisorSmith , AdvisorSmith
Digital disruption affects insurers in two major ways:
1) Risk analysis and pricing
2) Customer acquisition
For risk analysis, increasing amounts of digital data generated by smart devices can improve the quality of insurers’ underwriting models and allow them to offer more accurate pricing. Think of sensors that measure how aggressively a driver accelerates, or satellite photos and machine learning that allows insurers to see if properties are accurately described.
For customer acquisition, the big opportunity for insurers is to invest in systems that allow customers to get quotes in real-time and purchase directly. The disruption here can come from new upstarts who are digital-first and have built tools to allow instant quoting, underwriting, and purchase.
Also Read: Remote Working & Insurance! Can they Go Hand-in-Hand?
4. Update the Buying & Underwriting Process
Sa El, Co-Founder of Simply Insurance Simply Insurance
To stay relevant, insurance companies are going to need to update both their buying process and underwriting process to an online platform that is super simple and fast to use.
If you look at the generation of people who are currently buying insurance and the ones that are going to need it in the future. It’s easy to see that people want things fast and want to be able to do it online.
5. Adopt Technological Advancements
Stacey Giulianti, Chief Legal Officer, Florida Peninsula Ins Co
I’m not convinced that insurance ‘disrupters’ are anything more than just better marketers. Insurance is still a business of collecting the proper premium, servicing the customer, and accurately managing your underwriting results. Apps on a smartphone won’t change the fundamental business of property insurance. Carriers should, however, adopt technological advancements that help the customer manage their policy and utilize their benefits.
6. Key Adoptions for a Successful Future
Rogan Dwyer, Chairman of Observatory Strategic Management
The insurance industry is, or shortly will be, technically bankrupt through its own refusal to move with the times. Carriers have failed to change the business model or perception of what an insurance company is in the modern world. By failing to clarify insurance coverage, failing to shoulder their responsibilities to place the interests of their customers first (the policyholders), and failing to embrace new technologies that reduce costs, redundancy, and risk, they will be forced to turn to governments for bailouts.
If we equate such bailout to Lloyd’s own Recovery and Restoration sleight of hand of the mid-1990s, the blueprint is there for an unencumbered insurance market to rise Phoenix-like to provide the services and support individuals’ and businesses’ need for the future. This successful future, therefore, relies upon the following adoptions:
- Policyholders primacy – carriers HAVE to recognize that they don’t exist without clients.
- Risk mitigation becomes a partnership with policyholders so that interests are aligned – technology incubators are critical to this.
- Costs and processes are streamlined and innovation companies embraced – again, third party system innovators must be involved.
- Agents are recognized as agents of the policyholder and not held to ransom by carrier appointments and contingent commissions .
- Cash flow is recognized as a fundamental underpinning of industry, and more must be done to safeguard and facilitate that aspect. Simplify the insurance contracts to speed up payment and remove attorney costs from the policyholders.
Insurers will always be relevant and are the DNA of the business, but a successful insurance company must focus on looking forward rather than back. Actuaries should no longer be the driving force for rating and coverage. Transfer of risk to the appropriate vehicle must take over.
7. Digital Technologies could Help Insurers Stay Relevant
Justin Nabity, Founder, and CEO at Physician’s Thrive
Insurers are facing disruptions from every side. They have to meet customer expectations as well as compete with digital-first companies. The industry is changing due to the rise of technology, and the change is genuine because these new technologies are modifying the businesses, and disruptors are emerging. The ignorance in acknowledging the challenges that came with technology, plus failure to identify and avail of the opportunities, was a big mistake. This was expected because the performance of insurers was very weak, i.e., average top-line growth sales slowed, and the rate of net assets also decreased in the past two years.
Analyzing the current state of the market, insurers must find ways on how digital technologies could help them stay relevant. Many researchers estimate that digital trends in the market are set to create massive value in the coming years. Therefore, insurers need to embrace new technology to avoid the risk of losing a competitive edge. Insurers can take advantage of the explosion of data because of the internet, coupled with machine learning. This will not only help them in making their monetization policies better but also aid them in providing the most optimal value to their customers.
8. Invest in Digitization & Data to Thrive
Jacob Sheridan, CEO & Co-Founder of TPA Stream
One of the promises of digitization is unprecedented access to data. From claims data to enrollment data, as well as pricing, usage, and actuarial data, the amount of information insurers can leverage is exponentially growing. This data unlocks different ways to think about insurance, allowing providers and employers to more easily build custom plans at competitive prices, all at scale. Forward-thinking insurers will need to make investments in digitization and data to thrive in a landscape that is becoming more competitive each year.
9. Consider AI-Driven Claims Management
Dan Roselli, Managing Director of RevTech Labs
The rapid acceleration of AI-driven claims adjustment is being fueled even more now due to COVID-19 and the idea that in this environment, ‘remote is better.’ AI is allowing quicker and more accurate claims management that will dramatically reduce fraud and costs for the insurers. It seems like every one of our Insurance partners is focused on this hotspot now.
In order to stay relevant in the era of disruption, insurers first need to have a clear and strong understanding of the disruption itself. Then only they can respond effectively to today’s evolving digital landscape. Consequently, they will recognise the need for product and service development to match customer demand and market trends.
Apart from focusing on the digital transformation of processes, insurers need to improve their traditional operational policies and build new, customer-centric strategies.
Amid handling all of this, insurers may experience heavy loads of work; moreover, the pandemic has increased the workflow intensity. In such circumstances, they might want to consider outsourcing claims management services to reduce a considerable portion of the burden. At Insurance Support World, we understand the pressure insurance carriers and agencies are bearing and offer them our quality back-office support. We have been providing insurance back-office outsourcing services to clients across the globe since 2008. Call us at +1 646 688 2821 or send an email at email@example.com.
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