The new insurance: ready to plug & play?
Digital transformation affects insurance as well. Insurers have to reinvent themselves and become a whole lot sexier. Bjorn Cumps, Professor of Digital Banking, comments on the main findings of research conducted by Chair Partner Accenture.
Accenture’s Market Pulse Survey 2016 measures current consumer behaviour and attitudes in Belgium. Unfortunately for insurance the findings underline the fusty reputation of the sector.
1. Loyalty: more than 80% of consumers are loyal to their insurance provider, be it more out of habit than because of satisfaction. But what’s really worrisome: two out of three consumers would consider buying insurance services from newcomers such as Google or online insurers.
2. Apps and websites: only 55% of consumers are satisfied with self-service solutions; only 49% with technology innovations (repeatedly asking for the same information, no consistent offers over various communication channels, no personalised experience).
Insurance as a lifestyle product
As a result, new products and services are emerging.
1. Plug & play: new entrants are bringing a more customer-centric approach to the value chain. Insurance ‘as a service’ is emerging.
Professor Bjorn Cumps: “Several start-ups are working on apps that offer on-demand, real-time, usage-based insurance. Imagine you just booked a flight. Your insurance company sends you a message a message via an app, asking if you’re leaving on a holiday. And with one push of the button, you’ve taken out your travel insurance.”
Professor Bjorn Cumps: “Several start-ups are working on apps that offer on-demand, real-time, usage-based insurance.”
2. From protection to prevention: By defining customer journeys for key life events, insurers can tailor their offers to fit the customer’s best interests. Tailored products, supported by analytics, can also achieve damage prevention rather than protection. Big data collected from telematics solutions in cars or health apps (wearables) can help you to lower risk and in return, increase your loyalty through complementary services or reduced premiums. In Belgium, 50% of all consumers would be willing to share personal information to insurers in return for such benefits.
Professor Bjorn Cumps: “The Internet of Things, sensors and all sorts of devices that capture data provide information that allows insurers to interact with customers in a more personalised way. At the same time insurers can move to a more active and proactive risk management.”
What about privacy?
Advances in digital technology can certainly empower the customer, who no longer has to accept to pay for coverage that he does not need. But what with privacy? What if the ‘new insurers’, as is already the case in the US and the UK, start commercialising the gathered data – aggregated and anonymised – to retailers, for example?
Professor Bjorn Cumps: “Indeed, the principle of subsidisation is under pressure. Moreover, technology isn’t infallible. Remember the driverless Google car that caused a crash. And if driverless cars become a reality, who or what will have to be insured? The car? The chip manufacturer? The assembler? These are all fundamental issues that deserve to be discussed.”
How do insurers feel about ‘the new insurance’?
“We have the brand and the experience. They have the new ideas and the agility. And we have found a way to marry the two.” Mikael Hvolgaard (Tryg, alumnus MBA-FSI 2006-2008)
Read the full interview with Mikael ‘InsurTech on the rise’
“How far van you go with the use of genetic information?” Arné van den Boom (Interpolis, alumnus MBA-FSI 1999-2000)
Read the full interview with Arné ‘The insurance sector is digitalising. And now?’