Navigating paradigm shift in insurance – Grant Thorton report
Article Synopsis :
The insurance industry is being roiled by technology innovations and the emergence of disruptive business models.
“Navigating a paradigm shift in the insurance industry” from Grant Thornton explores three trends working together to not only change insurance but transform the insurance paradigm:
- Gen Y customers perceive insurance products as difficult to understand and a hassle to buy. As a result, they tend to shun insurance (buying only legally-required insurance products).
- Digital customers compare the insurance purchase experience with those of non-insurance players such as Amazon and Uber.
- An increasing number of consumers prefer a seamless shopping experience that starts online and ends online or, if desired, through channels such as phone or mail.
Legacy insurers are at least trying to change at speed, embracing new innovations and technologies to meet ever-changing customer demands, creating new commercial opportunities in the process. Insurers are also embracing vanguard technologies such as Robotic Process Automation (RPA) and AI to streamline core operations and improve customer service.
The report advises insurance leaders to focus on:
- Creating data-driven customer insights, which is in reality an organization-wide effort, not just the job of marketing, leveraging data analytics, social media analytics, etc. Data-driven cost and fraud reduction also have high ROI potential.
- Leveraging today’s technology tools to make leaps in customer engagement and operational efficiency. Tools such as AI and RPA, can also improve organizational decision-making.
- Monitoring all regulatory changes, with a specific focus on customer protection, risk management and cyber security.
While the report stops short of predicting specific winners, it does like the chances of insurance entities, be they incumbent insurers, InsurTechs, or digital natives entering insurance, possessing 1) digital capabilities, and, 2) organizational agility.
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Digital Insurer's CommentsAmazon’s Jeff Bezos is on record saying, ‘(In the digital world) The best customer service is where clients don’t need to call you, don’t need to talk to you.’ Amazon’s aim, therefore, is to make the buying experience simple and foolproof. No unmet expectations, no returns, no call-centers either.
While no one knows what the insurance industry will look like ten years from now, we believe big chunks of it will look and feel like what we’ll call ‘the Amazon model.’ Simple, fast, foolproof, and, yes, cheap—or less expensive than today. And 100% digital.
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