Connect with us
Finance Digest is a leading online platform for finance and business news, providing insights on banking, finance, technology, investing,trading, insurance, fintech, and more. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.

INSURANCE

Mark Lusted, managing director at financial experience design agency Dock9

Will the insurance industry really be disrupted? And what can incumbent players do to adapt and grow?

Mark Lusted

Mark Lusted

These questions have been hot topics in sector forums for a number of years, and we have noticed a definite change in attitude amongst many in the industry over the past twelve months. Investments in new technology, innovation labs, rapid prototyping and user testing, as well as an adoption of agile practices are on the up amongst the most switched-on.

Despite this, much of the sector is stuck in its ways – strong on tradition and ways of operating -particularly when it comes to innovation. For years this didn’t matter, but in the start-up era,there are an increasing number of fleet-footed InsurTechstartups changing the way consumers and businesses alike, look for protection.

With Consumer Intelligences latest survey reporting that “consumer trust and confidence in

insurance brands is at an all-time low”[1] there are clearly opportunities for new entrants who have the advantage of a fresh slate to build their technology. These businesses are leveraging data,automation, connected devices, personalisation and increasingly artificial intelligence to deliver simpler and smarter user experiences.

Crucially, the most innovative are challenging the notion that the engagement with a customer after purchase should only be at claim, adjustment or renewal. Could meaningful on-going customer engagement be the solution to the commoditisation of insurance in the age of the aggregator, and create happy, loyal customers?

Digital Darwinism

 While many insurance companies may dismiss these ideas out of hand, comfortable that their line of business or specific niche is safe from disruption, this is a risky attitude to take.

They should look to a fallen behemoth in the form of Kodak for evidence of how such complacency can come back to bite them. Failing to acknowledge the rise of the smartphone, Kodak focused on legacy technology – pushing out handheld cameras to an audience that simply wanted a more convenient solution.

Insurers cannot afford to go down this route.

Constant innovation is needed to make money, with which businesses can invest in their company to spur its growth. Insurers need to be aligned with their target market, which itself is likely to be seeing generational shifts in behaviour and give them what they want in the form of slick, easy to use digital solutions.

Systems strain

 Many insurers think that doing this will mean over hauling their legacy IT systems. It’s like the loft in your house – a potential new space that can be converted into a spare room, or office – but the hassle of cleaning it out is too much to bear, meaning it’s left as is and excuses are made.

The complexities of the insurance sector’s legacy systems can be baffling. The problem is, once norms have been set, it’s difficult to break out of them. With a history of mergers and acquisitions, it’s far from uncommon in our experience to find a multitude of independent legacy systems, often supported by a limited group of individuals with a reluctance to change.

However, insurers need to understand the damage using the excuse of legacy systems is causing their businesses, by hampering their advancement in an increasingly competitive market.

Moving away from existing systems is particularly undesirable if you’re a business that wants to quickly address the problem and move on; the thought of a multi-year system procurement and implementation project causes sleepless nights. There is also the danger that a ‘rip and repair’project will fail.

So how can you stay innovative without spending a fortune?

The truth is that delivering modern user experiences in most cases does not require a core system change.Rather than a full system overhaul, businesses can build middleware layers that interact between their systems and the front-end, allowing you a way to work around the incumbent technology and still provide customers with the best experience.

The level of complexity of the middleware developed will depend on the product, number of systems to be integrated with and amount of self-service touchpoints offered. But in most cases, this is far simpler and more cost-effective than a system change.

This can help incumbent insurers stop legacy systems acting as an obstacle in the way of exceptional user experience – which customers now expect as the bare minimum.

But it’s not just about technology solutions; a shift in mindset is also required. Delivering a transformation in user experience requires cultural and process changes across organisations. From top to bottom, there needs to be an understanding that the old rules will no longer apply, and customers in future will expect all touchpoints throughout the life of a policy to be delivered to the same high standard.

It’s a perfect opportunity for insurers to now start thinking about how they operate and ask themselves the following questions: Has anyone taken ownership for the complete, end-to-end user experience within your organisation?Have you shifted to rapid prototyping and testing with real customers before proceeding to develop any new features?Are were maining innovative and attracting the new generation of customers? ls your company culture going to enable the change required to keep ahead of the pack? Most importantly, how can westeer clear from becoming a Kodak?

Continue Reading

Recent Posts