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Article Synopsis :

Digital transformation is changing more than just the platforms insurers use to interact with customers. It is changing the whole relationship.

The relationship between insurer and customer is changing

It lists a number of insurers that have broken the mould and developed tailored services to help different markets.

What comes next?

The paper says we are entering a post-digital world, where companies will move beyond the adoption of digital tools and concepts to a new generation of technologies that businesses will use to differentiate themselves in the marketplace.

This does not mean that digital has finished. It is just the beginning. Most of the digital journey still lies ahead.

Every insurance company will be driving its business with digital technology, so which digital technologies are deployed—and how they are deployed — will be crucial.

The more I know, the less I understand

This digital transformation affords companies greater understanding of their customers and to a level of granularity never even considered before.

There are more channels than ever to reach those consumers and more digital ecosystems and potential partners to help insurance companies create holistic experiences.

Being digital will not be enough to differentiate one insurer from another. Insurers will need to understand the level of expectation they face from digitally mature customers, employees, and business partners.

Consumers that have experienced high levels of digital transformation will expect insurers to match and exceed this level of advancement.

Technology will be a key part of the everyday life, and if they are smart about it, insurance companies will be able to use it to service clients wherever they are, at any time.

Digitising the core business won’t be enough on its own. Insurers must:

• understand instant demand and supply options and that there will be more opportunities than they can service, so they must pick who to target and how they will meet those goals;
• determine which ecosystem partners they need and what their place in the ecosystem will be;
• mastering social, mobile, analytics and cloud (SMAC) technologies will allow insurance companies to harness power of disruptive technologies that will define the post-digital era, including distributed ledger technology, AI, extended reality, and quantum computing (DARQ).

Is a fair price fair to everyone?

Those who fail to master SMAC will be unable to meet even the most basic demands of a post-digital world.

They will also have new levels of responsibility and must address the privacy, safety, ethics, and governance questions that come from the access they will have to customer data.

AI and big data allows the pricing of risk on an individualised basis. But where do insurers draw the line? Should someone under treatment for clinical depression expect higher prices for life cover because their wearable shows they do less physical activity each day than the optimal amount for a healthy person of their age?

Should those who buy healthy food be rewarded more than someone struggling on minimum wage?

There is a fine line between nudging customers into ‘doing the right thing’ and discriminating against people for factors beyond their control.

The reputational fallout could be devastating. Society may not accept an insurance business model that prices products on these bases.

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