P&C customer engagement is changing. That change driven by InsurTechs and Big Tech firms engages customers personally through the use of big data, AI & ML, awesome UX design and back end systems purpose-built to support this kind of engagement. That’s just the first wave. What’s coming next as these companies tap deeper into the digital ecosystems surrounding insureds will change the competitive ground rules again.
Changing the Game
InsurTechs
InsurTechs have stepped boldly into the market on the personal and commercial side of P&C with solutions that make it easier and faster to understand and purchase insurance.
On the personal side, CUVVA who insures anything you drive, SURE who ensures where you live and what’s in it, and Lemonade, who offers instant everything, at great prices with heart have turned the traditional insurance customer engagement and experience on its head. Lemonade’s opening line says it all. Forget everything you know about insurance.
On the commercial side, innovation to date has focused on the small business. NEXT, biBerk, and Thimble provide coverages in minutes. Trov enables insurers to provide just in time insurance solutions where and when needed. Digital Risks, offers insurance to business as a subscription that can be turned up or down as business needs change.
Each of these companies has tapped into Big Data, AI and leverages state-of-the-art infrastructure to manage customer engagement and core processes. Lemonade explicitly uses behavioral analytics to reduce claims fraud. They also use a portion of insureds unused claims funds to support the insureds charities of choice.
Re-insurers
But wait there is more. Re-insurers are playing a key role in shaping the digital future of customer engagement in P&C as well as the broader insurance market. They were some of the first to invest in some of the InsurTechs listed above. They have also invested in companies like Slice, that provides both On-Demand solutions and a platform that others can use to offer On-Demand Solutions. Solutions designed to interoperate with digital ecosystems.
They have also invested in AI and Cyber startups and companies like iBeat that make wearable devices that monitor heartbeat and sends alerts when the signal indicates a problem. They also invested in FIGO a pet insurance platform that provides insurance as well as providing or connecting owners to other related pet products and services. Reinsurers are continuing to invest in next wave companies at the same time they are doubling down on the companies they have already invested in. And they are also investing in digital MGA’s that can leverage technology to quickly bring specialized offerings to market.
Re-insurers as the companies that insure the insurers are basically the industry shot callers. Investment by investment they are laying the stepping stones to a next more dynamic, higher growth insurance industry. One that meets insureds when and where they need it, with a host of offerings that include insurance and other value-added services. Offerings that are personalized, dynamic, easier to understand and much easier and faster to acquire.
BigTech
Big Tech; Apple, Amazon, Google, Facebook, and others have set the bar for customer engagement for the world for some time. Each of them is making its own play in the insurance industry. These companies understand big data, analytics, and customer engagement at a level and scale that virtually no other companies in the world understand. They have access to customer information in terms of their activities, needs, relationships, and buying behaviors that few other companies have. And, they are putting that data and knowledge to work to bring together personalized suggestions and offerings in amazingly beautiful and effective user experiences. They are also masters of developing, leveraging, empowering and monetizing the digital ecosystems surrounding insureds. They are bringing that capability to the insurance market. And, every InsurTech and Reinsurer building next-gen solutions and customer engagement strategies are paying attention to what they are doing and working out how to leverage it.
Digital Ecosystems
The Digital Ecosystems surrounding insureds offer an amazing array of solutions. Solutions designed to provide tools, knowledge, and services. Capabilities they need to help them manage various aspects of their business and personal lives and better achieve their goals.
On the personal side, you can easily find listings for the 10 best of about anything. Wealth management, home maintenance, managing rental property, wildfire and flood protection, you name it, it’s out there.
The same is true for commercial, no matter what business you are in. Restaurant, beauty salon, auto repair, consulting, gig worker, they are out there.
On both the personal and commercial side of transportation, manufacturers, as well as 3rd parties, offer apps to make managing upkeep, monitoring driving and practicing safe driving easier.
There are also government agencies that provide support services and data to insureds, an increasing number of whom, are providing APIs that others can connect to.
These apps connect with insureds when and where they need them the most. They offer not only potential engagement points for insurers but also a deep insight into the customer’s current and future needs as well as behaviors.
The next generation of P&C offerings will establish relationships with these apps and services. Whether its simply to advertise through them, or to offer On-Demand solutions through them, or to integrate their capabilities as value-added services into those offerings or incorporate those solutions into the insurance offering.
Big Data and AI
Big Data and AI have already made their impact on insurance. To date, most have been focused on improving claims and underwriting. The outliers have been those gathering data to create new data-driven business and product models. Those are coming to the fore, as well as offering that gather customer data to use in providing more personalized messaging and content. Still, others are using AI to assess which ads and add platforms customers are more likely to respond to.
As the digital leaders in insurance create partnerships with the platforms and services in the digital ecosystems surrounding insureds, they will leverage the same kind of referral models used by Big Tech to assess needs and interests and combine those with risk and risk mitigation models to provide highly personalized content and tailored suites of insurance and services offerings. Insight and offerings that help insureds better understand and address the risks that potentially hinder the achievement of their personal or business goals. As the metadata from these platforms and services is offered up digital leaders will also mine it to better segment customers, assess new product opportunities, and engagement points. That data will also be used to better piece together the customer’s journey through multiple ecosystems to determine which platforms and services customers use and trust the most, and where insurers can create more value through meaningful engagements across ecosystems.
Those ecosystems will include digitally augmented agents and brokers and comparator sites. Distribution partners that are incorporated into the customer’s journey where and when needed and that are proactively provided with customer information and relevant engagement history eliminating the need for them to start the dialog with the customer from scratch.
The net is that big data and analytics flowing from digital ecosystems and powered by AI & machine learning models will create a new generation of P&C insurers. One that is engaged dynamically in providing breakthrough value to prospects and insureds through highly personalized content, insurance, and value-added services offerings in real-time. A generation that is no longer held captive to competing on price, but that now competes on the incremental value they create for insureds.
User Experience Strategy and Design
User Experience Strategy and Design will play a key role in differentiating these next-gen P&C insurers. The next generation of user experience and design will be highly data driven. They will be responsive to what ecosystem the customer is using at the moment, what they are doing within them, and the context they are doing it within. They will provide a tailored but consistent experience across the various ecosystems and services the customer uses and across the various insurance offerings. They will also incorporate customer permissioned sharing of customer information to enable them to more quickly enable services of their choice.
Roadmap and Business Case
Though none of this is easy, it is coming. As it enters the market, it will dramatically change the competitive dynamics. So the message is, start now to develop and implement strategies that move your company in this direction. Each company’s roadmap will be different based on its current state of digital and cultural transformation. Greenfield applications provide the best launchpad for developing these next-gen offerings. Keep them simple. Define a market or segment. Identify the digital ecosystems, platforms, and services that surround them. Evaluate them to determine which has the greatest traction and value with the market segment you are trying to insure. Determine what type of relationship with them will provide the greatest mutual value to the insured, the partner and your company. Is it just an advertising play? Is it a platform you can offer On-Demand solutions through and or is there an opportunity to provide an integrated offering composed of insurance and their services.
Once you have completed that work its time to bring an MVP solution to trial or to market. That includes leveraging data-driven engagement and offerings and well as content. You will need to have a cloud-based core system or platform that uses microservices and API’s and that is designed to integrate with digital ecosystems and other platforms, like CRMS. Once the MVP is in place, you can explore other ecosystems and services and develop data-driven user engagement models that are responsive to the ecosystems and context the customer is coming from.
The Elevator Pitch?
Next-Gen P&C Customer engagement will leverage the digital ecosystems, platforms, and services surrounding insureds to create personalized value-added engagement models and solutions. Models that engage and deliver value where and when needed. These are being driven by the customer expectations set by Big Tech, InsurTechs and the investments being made re-insures and the movement to cloud-based core systems by the industry at large. If we wait to invest in this type of engagement model, we will be forced into competing totally on price. If we move now we can develop a more sustainable competitive approach by competing on value.
I look forward to your thoughts and comments.
