Article Synopsis :
We all know the digital insurance customer is more demanding. This crisp report, “InsurTech – insurance a new way” from Peter Braad Olesen of McKinsey, gets into the specifics and metrics.
With aggregators, agents and sometimes banks entering the mix, insurance transactions are more complex than ever. Nonetheless, digital customers expect the products to be attractive, personalized, transparent, and easy to understand and purchase. In response, InsurTechs have emerged across the insurance value chain and lines of business. Though 37% of InsurTechs are in Distribution, investments are increasing in Product Development, Marketing, Pricing, and Claims.
InsurTechs approach insurance in a new way, with:
- Focused offers
- A focus on customer experience and engagement
- Digital by default
- Early adopters of new technology
- Agile cultures and ways of working
Inspired by InsurTechs and following their digital playbook can yield significant results measured in net premium growth and lower combined ratios.
InsurTechs are friend and foe; leading to a number of strategic questions on competition and collaboration. Worth noting:
- 9% of InsurTechs aim to disrupt the full value chain, capturing value from incumbents
- 30% aim to disintermediate customers, enabling new channels for incumbents but also exerting potential pressure on margins
- 61% aim to enable the insurance value chain, yielding positive impact on incumbent’s top-line and costs
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Digital Insurer's CommentsDigital insurance customers are not normal customers. They’re far more demanding, as articulated in this report. Digital insurance customers expect better products more personalized, from vendors they can trust, and they want to be appreciated for their business. They want it all, and they expect it now.
Perhaps the biggest advantage InsurTechs have as digital natives is that they gladly accept these challenges, rather than ignore or even resent them. And they own the will to innovate, bent on making good things happen. In an increasingly digital world, these are increasingly valuable differentiators.
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