According to McKinsey, insurance is entering a customer-obsessed era.[i] To outcompete, many P&C insurers spend more than 15% of their annual revenue on marketing, hoping to establish their brand as a foremost caring provider in the hearts and minds of target consumers.[ii]
Carriers and their agents may have a rocky road ahead. According to the Bureau of Labor Statistics, the median age of an insurance agent today is 44.5,[i] putting the highest percentage of the agent workforce on the road toward retirement.[ii] In fact, a quarter of them are predicted to leave the workforce by 2018.[iii]
We’ve been talking a lot about innovation recently, and with good cause. The ability to rapidly innovate is no longer a someday proposition, but an immediate concern for insurers as they grapple with gaining market share in the current environment.
P&C insurers are starting the year strong with policy holder surplus hitting a record value of $688.3 billion,[i] but a number of factors, including a soft growth market and a low-yield investment environment, are pushing insurers to cut costs.
The explosion of the on-demand economy has created opportunities for a new generation of disruptors in the insurance industry. These InsurTech start-ups have successfully attracted media attention and investor funding, and they aim to take wallet-share from incumbents by digitally distributing fresh, P&C insurance products to customers seeking a more streamlined, personalized way to buy insurance.
InsurTech is taking the P&C Insurance industry by storm. New market entrants looking to disrupt the industry and take a piece of incumbents’ customer wallet-share are a hot topic among insurance executives and consumers alike. As mentioned in a previous blog, InsurTech-Inspired Trends to Watch in 2017, InsurTech Disruptors challenge existing insurers by offering consumers complete digital purchasing capabilities, not to mention attractive and unique personalized coverage options. What they don’t offer is the established stability and longevity of traditional insurers.
We live in a new, digitally focused era. According to a recent Forbes article, InsurTech is rapidly changing the insurance landscape by bringing the demands of the digital economy to the forefront of the industry.[i] InsurTech is on the rise and the tech-savvy consumers of today, demand immediate, paperless access to information followed by a speedy buying experience.
As record funding poured into InsurTech last year, speculation started to rise on the future of established P&C insurers. Even company executives were giving thought to the potential ramifications. They revealed in a study conducted by PwC that when it came to InsurTech Disruptors, margin pressures, loss of market share and increasing customer churn were the fears that kept them up at night.[i] What was missing in all of the talk about disruption, was a realistic delineation between InsurTech Disruptors and InsurTech Innovators.
According to a study by Forrester, a “customer-obsessed” culture is the future of the insurance industry, a state that is impossible to reach without gaining digital capabilities to meet consumer demands for fast efficient service and greater product personalization.[i] While insurers have focused on moving the digital needle inch by inch, more needs to be done and fast.
The ultimate goal for any regional P&C insurer is to improve business outcomes, but that can often be a difficult task in today’s market. According to a recent study conducted by EY, the demand for new products, including the ability to provide novel offerings such as on-demand coverage, is disrupting the traditional insurance landscape.[i]