How insurers can prepare for future generations
A report published by Swiss Re in mid-May argued that technology is quietly revolutionising insurance distribution, helping increase consumer centricity. It continued by stating that technology and big data are fundamentally changing the traditional insurance distribution model by re-configuring how insurers and consumers interact. However, I feel the report has missed the point.
What Swiss Re should have asked and what insurers should be asking themselves is how they stay relevant for future generations. Is their value, function and business model sufficiently adaptive for the impending scale and velocity of change? Claiming that the internet is a disruptor to insurance buying is like claiming harmful emissions are causing accelerated climate change. Besides stating the obvious, these facts were agreed upon years ago. Now is the time to adapt and survive.
But the difficulty in taking this approach is that technology is moving so fast that it is impossible to have a plan for what is going to happen in five or 10 years. However, there are certain approaches that insurers can take to make sure businesses are agile.
To take advantage of this change, time should not be spent on technological advances or even products but should closely look at the human behavioural factors driving this change.
Over the past decade there has been a drastic change in how people buy insurance. They are now purchasing online rather than in person, yet the changing customer experience has not evolved.
Insurers need to change their products to match their individual customers rather than any internal practices. By taking this approach, customers will be appreciative and responsive to the tailored experience. Then in return, businesses will be able to closely navigate and understand the human behavioural elements of the changing environment.
The report concludes that data will be key in fostering advances and predictive analysis for customer needs. This is a point that I agree with. While data has always been big, the recent explosion of information at the disposal of insurers is phenomenal and will be the driving force behind whether they can adapt to the evolving environment. Big data will prove to have a bigger impact on the industry than the internet. If you aren’t preparing for future generations now, then it may already be too late.