Recent EY research confirms that insurance subscriptions are attractive to many consumers and businesses because of their easy and convenient bundling of holistic services, many of which will be provided by ecosystem partners.
The secret sauce for subscriptions in insurance is linking services and engaging customers around key life events (e.g., starting a new household or downsizing for retirement) or emerging lifestyles (e.g., urban gig workers, recreational farmers, world travelers) and complex financial decisions (e.g., launching or expanding a business).
The rise of hyperconnectivity and real-time risk
Consumers have already become accustomed to tailored notifications and prompts through activity trackers, wearable tech and mobile apps. People – and businesses – who like personalized guidance for traffic, weather and fitness will likely accept similar services for risk exposures (particularly if it helps them save money). This means the next major innovation opportunity with data and analytics for insurers involves rapidly identifying and precisely measuring risk, and then using that insight to proactively meet customer needs.
Insurers will capture streams of data from apps, mobile devices, wearable tech, connected vehicles, smart homes and workplaces, as well as alliance partners and the billions of devices connected to the Internet of Things (IoT). By applying AI, machine learning and other advanced analytics techniques, they can measure risk and price premiums in real-time, leading to discounts, tailored prevention services and usage-based products.
Real-time risk visibility is clearly a win-win. For small businesses, better risk management promotes bigger profits. For individuals, it’s about safer and better lifestyles. At the same time, insurers benefit from closer long-term relationships based on more frequent interactions and opportunities to add value.