As we emerge from COVIDinduced disruption, despite facing tough economic conditions businesses appear to be returning to longer planning horizons. They are ready to invest and form new partnerships. To go from survival mode and look to thrive, they aim to use the many lessons learned over the last three years to accelerate their use of technology.
Globally there are already signs of innovation in insurance markets, but these are still relatively small developments. According to European insurer MAPFRE, 2020-2030 is the period that will transform insurance forever, so how will the next few years make this THE decade for big digital transformation?
And what does this mean for our local strata insurance industry, which is still largely manual and disconnected, and has the potential to be far more efficient?
Who will lead the way?
Research by Accenture suggests ecosystems will drive this momentous change – where suppliers from different industries interact to create value based on shared data. Leaders who can design and execute a market-leading ecosystem will be the disruptors.
For insurance, those who can build a market-leading ecosystem with trusted partners will ensure relevance and growth for the future, delivering “experiences” for customers to purchase, rather than individual products and services.
Shape the market play.
Winning insurers will set a clear ecosystem strategy – defining the vision, business case, prioritisation and roadmap.
67% of insurance industry leaders believe current business models will have changed beyond recognition within the next five years and that ecosystems will be the primary agent of change.Accenture
Take a look in the mirror.
Insurance leaders must assess capabilities, assets and culture to identify and rectify gaps to be an effective ecosystem player.
Pick your partners.
Leading insurers should select partners with complementary capabilities, proven trustworthiness, a collaborative mindset, domain expertise, customer relationships and data.
Emerging trend – Insurtech
While ecosystems will take time and collaboration to develop, we can already find many examples of Insurtech being applied (the use of technology innovations to find cost savings and efficiency from the current insurance industry model).
Bot technology is showing potential improvements for some manual renewal processing times to customer service. A bot gathers and collates data, and completes checks needed for a renewal. This information is sent to an underwriter to assess and make an underwriting decision. As bot technology further develops, we expect to see them checking Google Maps for property locations for example, taking a screenshot, layering it against flood mapping and sending it to underwriters to provide even better underwriting information.
Similarly, AI technology is automating small, administrative tasks, making them more efficient and reliable. This leads to faster processing times and enhanced service for brokers. It also allows businesses to target new business opportunities and build for future growth.
All this leads to a more informed insurance industry that’s even better able to assess and mitigate risk for customers. With this deep insight and unique knowledge, companies will be able to develop exceptional value propositions that will combine insurance coverage with a wide range of additional services within the ecosystem.
On the horizon – improved quote efficiency
An area that’s crying out for greater automation and innovation is brokers gathering new business and renewal quotations from the market. Currently, underwriters struggle with the volume of quote requests submitted to them. Mainly they lack sufficient resources to manage everything that comes in. The trade-off is they become too selective with the requests they will respond to. This generally means they may not respond to all the requests they are offered, potentially restricting the choices and competition available for brokers to offer customers.
We must invest in ways to create innovation for sustainable growth. Innovation is not just about creativity and generating unique ideas, it’s about identifying unmet needs and untapped markets, and addressing them.McKinsey & Company
An automated solution
Technology is ready to support us with dedicated contestable, open-access quote platforms, connecting brokers instantly with underwriters, creating a more competitive marketplace and a better choice of options for customers.
Benefits for underwriters
- Access to a bigger pool of quote requests alongside the ability to handle them.
- Process efficiencies with less manual intervention.
- Potential for future business growth.
Benefits for customers
- Access to the full market of insurers.
- Better assurance of a competitive premium.
- Quicker response times.
By shortening the sales cycle, underwriters will have the opportunity to be more competitive and the overall quality of quotes improve for customers with less manual intervention.
Innovation drives results
Wherever these next big developments come from, we know our strata market will keep evolving.
New entrants will keep the market fresh. For example, new Insurtech start-up Hutch Underwriting has entered the market with a strata policy designed for today’s market, with included protection from cybercrime for strata plans.
So, to truly innovate, we must allocate resources to it. A successful ecosystem relies on us reallocating resources from our core business activities to invest in initiatives with the potential to disrupt and generate sustainable sources of growth. The future is in our hands.