On-Demand Insurance Solutions are creating a Buzz in the industry. Introduced by InsurTechs, they are now being adopted by major carriers. Though only 1% of the market today, their influence will reshape the future of the insurance. If you haven’t taken the time to deeply understand the impact they will have and begin to work with them, you need to. Here’s why.
Attracting Younger Generations of Consumers
On-Demand Solutions enable users to obtain coverage for what they are doing when they are doing it. This allows them to live life the way they want and be protected when they need it. Whether it’s for travel, an apartment or scooter rental, or an adventure sport. It also allows them to manage policies on the fly as their life and business situations change increasing or decreasing coverage as needed.
Rather than an insurance coverage that they don’t understand or don’t think they need, On-Demand insurance is something far more tangible. It has a clear relationship to an activity or need they have at that specific moment in time. By developing and providing On-Demand Solutions, insurers gain the opportunity to build a relationship with a younger demographic, that has been difficult to cultivate relationships with.
Building Credibility & Trust
Transparency, Value, Speed, Control. These are attributes that most people see lacking in mainstream insurance offerings. Yet because of their simplicity, On-Demand Solutions provide these. They provide the building blocks needed to build credibility and trust between the insured and the insurer. As a recent study in the urban mobility industry has shown, offering On-Demand Insurance has made urban commuters feel safer and more protected when renting escooters and other eforms of Urban Transportation.
This is a brand quality and image every insurer needs to build. As long as insurers make it clear what these On-Demand Solutions cover and are as responsive in settling claims fairly as they are in binding a policy, On-Demand Solutions provide a powerful way to establish credibility and trust as part of their brand.
Creating a Gateway for Cross-Sell & Up-Sell
With that trust built, On-Demand Solutions open the door to cross-sell and up-sell opportunities. Whether it’s for other micro-insurance offerings or for larger more mainstream insurance offerings, On-Demand solutions can offer a gateway to a larger more valuable relationship between the insured and the insurer. Beyond that, there are opportunities to further monetize the relationship by offering value added services that help insureds better predict, prevent, mitigate and recover from risks.
Building Technical & Innovation Skills
On-Demand Solutions require developing innovative approaches to insurance products and distribution channels. They also require digital generation infrastructure and systems to run on. In addition, they require a customer-first-focus. A focus informed by real-time data from multiple devices and sources. These are all skills and capabilities that insurers will need to thrive in the digital generation of the insurance market that is coming. On-Demand Solutions offer a great on-ramp to the future of insurance and provide a relatively low-risk approach to building them for those willing to invest in them and the infrastructure and partnerships required to support them..
Open the Doors to Powerful Digital Ecosystem Partnerships
We have already seen partnerships between InsurTechs and Insurers that are capturing and adding to the motive force of change On-Demand Solutions provide. In addition to offering standalone On-Demand Solutions, Insurers are now offering them as value-added add ons to mainstream policy types.
The next generation of On-Demand solutions is being designed to operate within the digital ecosystems the end insured places the greatest trust in and uses the most frequently. The digital ecosystems that help them manage and protect their homes, build, manage, and protect their businesses, explore the world, travel, and commute, and keep themselves and their families safe and healthy.
These next-generation solutions are being designed to leverage the data, transactions, and solutions within those ecosystems to engage and support customers at their point of need. They are being configured to offer additional services from within the ecosystem and leverage emerging technologies that help guide insureds in making more informed and better decisions. They will use behavioral science and data to motivate better lifestyles and decision making. And they have the potential of becoming the “brokering agent” for other mainstream insurance products because their participation and interoperability with digital ecosystem platforms and solutions places them at the customer’s point of need.
Act Now
Companies that aren’t exploring these solutions are building up technical, cultural, market, and partnering debt. Digital leaders are going rapidly up the learning curve On-Demand Solutions requires. They are building the technical knowledge, infrastructure capabilities, and the cultural and strategic momentum needed to gain a significant market and operational competitive advantage not just in On-demand Insurance, but other types of policies as well. They are also identifying and building strategic relationships with the key ecosystem platform and solution vendors that are gateways to customers.
If you aren’t developing On-Demand Solutions and leveraging that knowledge across other policy types, you will find it very difficult if not impossible to play catch up. On-Demand offers a bridge to the future of insurance. One that you need to cross sooner rather than later for it to do you any good. The message is “Act Now”.
Thoughts Appreciated.
