Insurtechs, insurers and service providers agree that the industry is driving value through insurtech, but they see several areas ripe for innovation. The big areas of opportunity where respondents said very little value creation has been realised over the past three years are:
- Efficient administration: Many insurers are still using paper-based or, in some cases, face-to-face acquisition and onboarding procedures. Introducing digital self-service with smart online forms that self-populate will improve the customer experience and accelerate policy sales and servicing. As insurers start using the data captured by self-service, underwriting, leakage and administration expenses will also be reduced.
- Pricing and underwriting agility: Manual broker processes and non-integrated broker systems make it hard for insurers to maximise new business volumes. Integrating broker and insurer systems to enable real-time underwriting, pricing, policy updates and broker commissions should be immediate goals for the industry.
- New Products to deliver differentiated value propositions: Insurers will increase their focus on activating usage based products, and behaviour-based priced products. For example, a consumer who has opted-in to an Insurers Concierge program, posts an upcoming surf vacation on social media.
The digital insurance concierge detects this information and notifies the customer via an intelligent virtual assistant (“IVA”) that single-item coverage, only for the duration of trip, for surfboard and a camera are recommended and probabilities for item damage and theft are provided by the IVA. In the event that the customer has an accident on the way to the airport, the IVA automatically populates claim information to a new claim record, requests photos of the crash, arranges for an Uber to get the customer to the airport and arranges towing. If the surfboard is damaged in the car crash, the IVA arranges for a replacement to be delivered to the customer’s hotel.
We also expect a rise in IoT enabled Smart Devices to help to prevent accidents that would lead to damage, personal injury and costly claims in commercial and residential property. By detecting potential events such as water leaks, smoke or fire, or personal injury in workplace environments, insurers, property owners and employers would have early warning of an emerging risk. Early detection of events and subsequent notification to owners, insurers and service providers can address potentially catastrophic damage to property and mitigate hefty claims.
Such innovations rely on insurance processes being connected with external APIs, devices and IoT sensors, and can be aided by digital enablement platforms, which integrate an insurer’s core systems with new technologies and partners’ systems, enabling plug and play models.