Library: Insurance Edge – Insurance is in desperate need of a digital revolution
Executive summary :
In this piece, Callum Rimmer, founder and CEO, By Bits takes a look at how far we still have to go when it comes to digital insurance.
It is thought-provoking stuff, enjoy.
The stories of Kodak and Nokia are 21st century fables with a clear learning around adaptation and evolution. Each has universal understanding that is applicable to every sector, geography and service. Only, unlike their childhood counterparts, these cautionary tales are actually true and the endings are not happy ones.
This is something the insurance industry needs to be cognisant of as we enter a post-pandemic world. This is because the last 12 months has forced every sector to review its operating models and approaches to customer experience in light of rapidly changing customer needs and evolving cultural behaviours. This is particularly pertinent when it comes to motor insurance as global lockdowns, social distancing measures and sweeping changes to working habits have led consumers and insurers alike to reevaluate the value of traditional policies.
Insurance at an inflection point
According to the J.D. Power 2020 Auto Claims Satisfaction study, there was a 22% decrease in car insurance claims since the pandemic in the US. In the UK, we’ve seen a few insurers , like Admiral, offer cash refunds to customers as a result of travelling reduced miles and, while a nice gesture, it’s not one reflective of the disparity of the situation – both historical and present.
That is because the insurance industry has been ripe for change for years – long before COVID became part of the vernacular. Motor insurance, and in particular its pricing models, are seen as opaque and unfair, and because it is mandatory if you own a car, motor insurance still feels like a tax rather than a purchase decision. According to this 2018 study (BritainThinks) by the Association of British Insurers, seven in ten (70%) insurance customers agree that, no matter what they do, their insurance premiums seem to go up every year.
There is no doubt consumers are overwhelmingly dissatisfied with the level of service they are receiving so the industry is at an inflection point. It is here the examples of Kodak, Nokia and other defunct brands and products becomes particularly pertinent to those in the insurance sector that don’t want to follow suit.
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