Insurance Goes Digital – FC Business Intelligence
Article Synopsis :
Digital innovation is driving insurers to rethink their distribution strategies.
In “Insurance Goes Digital: What Modern Technology Means for Distribution and Competition”, FC Business Intelligence explores the shake-up of traditional distribution channels due to the emergence of a new generation of customers and non-traditional players entering the market.
The paper presents a high level perspective on how insurers can tackle issues related to new digital tools, changing customer demands, changing intermediary dynamics, commoditisation, and non-traditional competitors like Walmart and Google. Key discussion points include:
- Commoditization has become an eventuality, but insurers can maintain differentiation through the effective use of digital channels
- Consumer discovery of information is going to play a significant role in future sales funnels as customers take more control of the process
- Intermediary relationships are becoming less adversarial and present opportunities for mutual growth to the extent customer value is co-created
- Customer demand is pushing change. Insurers must respond to new demands for information access, personalized plans and digital services
- Competition will intensify, coming from new sources, as data proliferates. New digital-native competitors may lack a historical context for insurance, which may be an advantage
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Digital Insurer's Comments
What’s changing in our distribution landscape? How do we respond? How do we leverage technology and data to re-orient distribution and pull closer to customers? All good questions.
Winning answers, in our view, come via the following actions:
- Establish meaningful partnerships with technology providers
- Focus on re-skilling internal IT teams
- Integrate intermediary/broker/agent modules in all core technology solutions (policy admin, claims, billing)
- Reward innovation across the enterprise
Digitisation can divide or unite. Insurers transforming themselves in alignment with intermediaries, brokers and agents will create synergies conducive to growth.
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