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]
A quick search of the internet will tell you that customers are interested in bundling their P&C insurance coverage. Leading sources trusted by consumers for savvy advice on wise spending, such as Nerd Wallet and Investopedia, have all addressed the issue. Even Nasdaq has something to say, touting the money-saving advantages of bundling.
For traditional P&C insurers, business growth can be difficult in the current market. According to a recent report by EY, “…advances in technology and the growth of InsurTech are raising customer expectations for greater innovation.” They are also eliciting a more customer-centric environment. As P&C insurers adapt to the new market challenges, innovation in the areas of product offerings and the customer experience will be critical to growth.
In the era of the evolving customer, property and casualty insurers face a multitude of threats to profitability, pitting their own outdated legacy systems and processes against new players entering the market who seem to have all the savvy moves and attributes that customers want. Acquiring all of those consumer-pleasing bells and whistles is a chief challenge to operations officers of many incumbent carriers, and internal agents are the ones to pay the price. Without strong digital distribution channels, agents are unable to effectively meet customer expectations for fast, efficient quoting and purchasing and spend far too much time on administrative tasks, driving up costs and losing out on opportunities. The good news is that operations leaders can empower agents to meet 21st-century customer experience standards with the right digital distribution platform.
It’s the job of the insurance marketing team to attract the right customers and keep them engaged, but marketing across generations, with different engagement styles and preferences, has created a new challenge for P&C insurance marketing leaders. While more than 80% of consumers want the ability to shop for and purchase coverage online,[i] some still want to speak with an actual person when they have questions, and most millennials, those up-and-comers who comprise the future of insurance, prefer to do almost everything online, from researching to quoting and purchasing. Marketing strategies, without both traditional and digital engagement capabilities, lead to missed customer acquisition opportunities and suboptimal results.