Transforming innovative insurance ideas into a reality is the only way for the insurance market to move forward. Unfortunately, too much of the insurance press coverage is focused on potential rather than reality. We read multiple headlines such as ‘Five tech trends that will define the future of insurance’ or ‘How technology can rebuild trust in the insurance market’. These articles paint a tantalising picture of exciting possibilities for the insurance market.
The really exciting press coverage however, comes from the reports of when possibilities become a reality for the insurance market. To that end, here are some of the actual innovations that are already transforming the market.
Using Artificial Intelligence (AI) for insurance customers
Arguably it is the potential benefits of AI for the insurance industry that have created the most excitement. Luckily the benefits are not just theoretical. We can already see some inspirational examples of the potential becoming actual, as innovative ideas become reality. My favourite is Lemonade. Disrupting the Insurance Industry with AI, is a half hour interview with Daniel Schreiber, the cofounder and CEO of Lemonade. This interview delivers some fascinating insight. In particular, the conversation includes details of how the company has integrated AI into behind-the-scenes processes, including regulation, feature development and production.
Introducing Customer-Centricity to the insurance market
Customers should be at the forefront of every business decision. This sounds so obvious. However unfortunately there are many examples of customers not being at the centre of insurance strategies. Our blog, ‘Seeing through the eyes of the customer’, gave a stark example of an Organisation that put cost savings ahead of customer service. But there is evidence that this is changing.
One positive example from the travel insurance industry is Panzley. Here the innovative insurance idea was the ability for an automatic claim payment for flight delays and cancellations. The reality is The Panzly platform. Before you fly you enter your flight details into the app. Your details will then be used to give you a personalised insurance rate. After that, if your flight is cancelled or delayed by 2 hours or more, Panzly will automatically and immediately pay your compensation into your bank account. A great example of designing a service with the needs of the customer at the centre.
Collaboration for better insurance solutions
In their paper ‘InsurTech trends for 2019,’ KPMG forecast “More partnership between insurers and insurtech companies are likely to develop over the coming years”. There are many examples of the truth in this prediction. An article this month from Insurance Business UK, How insurtech Wrisk grew “from an idea on a wall to a real concept” outlines Wrisk collaborations with BMW and Allianz. It also poses this question: “In terms of opportunities, what is your outlook for the sector?”. The answer from Wrisk CEO Nimeshh Patel speaks to the truth of the KPMG prediction. His response: “I see the opportunities lying in insurtechs partnering with larger, heritage insurance companies to help them improve the customer experience.”
Another recent example comes from the American insurance company, Travelers. They have forged a partnership with Hoover for 3-D modelling in claims. This article from Digital Insurance on the collaboration reports “Hover’s technology transforms smartphone images of property into 3-D models, which will improve property damage views with detailed measurements of buildings.”
So, as technology becomes more diverse and complex, it is no longer possible to be market leading in every facet. The way forward for radically improved insurance distribution is collaboration. Those that integrate the best technology in a seamless solution will be able to give customers the best experience across the whole insurance life-cycle.
Reducing the cost of innovative insurance
A recurring theme in the insurance market is the cost and risk of introducing innovation. For Insurers with huge investment in ‘business as usual’ and complex legacy systems that ‘do the job’, there appears to be huge risk in spending vast amounts of time and money on change. One way of reducing the cost of innovation has been demonstrated effectively by Direct Line. Their ‘test and learn’ approach is outlined by Computer Weekly in the article ‘Direct Line built an insurtech it can tweak a thousand times a day’ . The objective for Direct Line is to have a cost-effective way to continually test and adapt ways of serving customers.
The internet-of things (IoT) for protection AND prevention
The ability to use technology to prevent claims from happening in the first place s fast becoming a focus for Insurers. Zurich are a great example in the ‘prevention-first’ space. To this end they have partnered with Vodaphone and Samsung to develop the Zurich Smart Home Platform. This service package includes alarms for smoke detection, water leaks and intruders. Talking about the benefits of the smart-home revolution in ‘How secure are smart home devices’ Arslan Hannani, Head of Market Management, Zurich UK, said “It’s primarily about providing peace of mind for customers,”
In conclusion, the positive news from the insurance market is that many innovative ideas are no longer just ideas. Concepts are fast becoming reality and long may this last. To finish, here is another great quote from Arslan Hannani. “For insurers and brokers, there is a clear advantage to getting behind this technology. It’s not something you want to be late to the party on.” Arslan was talking about Smart technology, but this quote can be applied on a much more universal basis. There is huge potential from multiple technologies to deliver radically better solutions for insurance customers. Let’s hope we see more and more examples of the potential changing into a reality.