At Axell, we work with insurance clients from Australia to Japan to South Africa to Europe, and despite local market differences, we’ve seen how technology is driving change across four key areas.
I recently was honoured to speak about these trends at the Israel Chamber of Commerce in Thailand Virtual Conference on The Future of Digital Disruption in finance. You can watch the interview here or read a summary of my insights below
What's driving the change?
- New product design and redesign
Insurance is moving from a static product with fixed pricing to a dynamic, personalised proposition. Innovative insurers are creating usage-based products, such as motor insurance, or developing new digital value propositions, such as consumer cybersecurity protection or microinsurance offerings. Not only do these present new opportunities to reach new markets, but they can also improve satisfaction with your existing customer base.
- Operational excellence and simplicity
Traditional insurers have decades of legacy systems and processes that create operational complexity, ultimately costing the business time and money to maintain. Streamlining these processes creates efficiency and delivers an experience that helps meet the expectations of today’s digital customers. Digitising customer onboarding, policy renewals and payments, and claims automation are quick wins for big improvements.
- Customer risk prevention
Insurers are starting to see value in motivating their customers to create positive behaviour change with incentives and rewards. In return, insurers can reduce claims and ultimately, improve the wellbeing of customers. For example, safe driving rewards can reduce car accidents, healthy lifestyle programs can reduce rates of chronic illnesses, and return-to-work incentives can improve employability.
- Digital distribution via financial advisers
COVID-19 has highlighted to insurers the value of their financial advice distribution channel and how technology can empower this network to reach and service more customers. A human touch is the traditional insurers competitive advantage over the new digital-only insurers. Therefore, it’s vital to invest in technology that bring this humanity at scale while streamlining low-value processes in the advisers’ workflow.
How to compete?
To win in today’s digital world, insurers must be willing to embrace innovation and invest in projects across the spectrum of these areas. I’ve seen throughout my career how insurers’ risk aversion to innovation projects that may fail can hold them back from investing in new initiatives.
It’s no longer enough to invest in single, large digital projects. Not only do these stifle business resource and are rarely delivered on time or to budget, but they also have a huge opportunity cost.
Our advice to our clients is to create an innovation ecosystem that can foster a portfolio of projects ranging from incremental to disruptive themes. This strategic approach balances the risks against the opportunities while helping to build frameworks, capabilities, and efficiencies in project delivery.