How will digital innovation transform the insurance industry in 2015?
From customer service through to data management – and even the Internet of Things’, the following year promises to be a period where “digital” is put to work to better meet expectations, increase efficiency and bring real improvements to products and services. Here’s a snapshot of what that is likely to mean for the insurance industry…
Insurance gets to grips with mobile
It has been almost 18 months since we witnessed the global ‘tipping point’ of mobile overtaking fixed internet access. It’s becoming second nature for consumers to conduct their entire relationship with the companies they do business with via mobile devices. But are insurance companies an exception to the rule?
So far: perhaps. According to Insurance Times, as 2014 drew to a close, the feeling within the industry was that there is still a long way to go to catch up with other sectors when it comes to all things digital. Mobile, however, was identified as an area where significant inroads could be made over the coming year.
There’s no denying that the industry-specific challenges are real here: insurance is, after all, a complicated product – and any attempt to over-simplify declaration and reporting requirements is especially likely to raise consternation among providers of professional indemnity insurance for insurance brokers, a challenge that providers such as Bluefin Group are tackling head on. There’s also scope for friction (not to mention confusion) if broker and insurer are both aiming for strong digital engagement via their own separate mobile platforms.
Nonetheless, with policyholders wanting and expecting easy access to accounts, quotes, assistance and progress reports on platforms optimised for their phones, the pressure will be on the industry to deliver.
Better ways of meeting Generation Y’s expectations
This point was highlighted recently in Capgemini’s 2015 World Insurance Report. Quite simply, insurance customers aren’t happy: globally, less than 30% customers report a positive experience – and the numbers are down on two years ago. Capgemini highlights the expectations of Gen Y, for whom digital is the norm.
The problem for Generation Y is that a seamless digital experience doesn’t sit well with the traditional broker model. Innovation in 2015 is likely to mean the removal of barriers that prevent a “consistent customer experience across channels”. It means a joined up approach: of providers working hard to ensure the same message across different platforms, to prevent customers feeling that they’re being short-changed on quotes, for instance, or the feeling that the claims process involves repeating the same information to multiple representatives of the same organisation.
Increased importance of big data
The Marsh Report on trends for 2015 highlighted the importance of data analytics in driving underwriting profitability. The capacity to collect and store vast metrics is already with us. The challenge is to compile and present that information in a way that underwriters can interpret with absolute confidence.
This year is likely to see continued evolution of the data dashboard: the ability of insurers to take that data and draw meaningful conclusions from it. Traditionally, the emphasis of the importance of big data has been on its potential to enable insurers to avoid bad risks. On top of this, its growth also has the potential to speed up the sales process and aid with the development of new products.
The Internet of Things
This whole area may still be very much a ‘work in progress’ – so isn’t it a little premature for Capgemini to list this as a “transformational driver” for 2015? In fact, it’s having an impact already. One of the consequences of this technology is that “things” – e.g. cars, appliances, home security systems are able to capture more information about users than ever before. Take motor insurance for instance, where a combination of GPS tracking and usage logging data means that insurers already have the capability to get extremely detailed information on driving patterns and usage rates. This has the twin benefit of giving insurers the ability to better assess risk and detect fraud.
As 2015 progresses, expect further developments on each of these fronts. Have you had first-hand experience of how “tech” has affected your relationship with your insurers? Share your thoughts…