The Santa Claus most Americans recognize as the carrier of Christmas gifts to sleeping children was not always the happy man he is today. Early illustrations of St. Nicholas depict him as a stern, commanding figure, holding to a stout birch rod as a reminder to children of the importance of being good.i
In recent blogs, customer Sarah has revealed the opportunities and challenges personal lines carriers face in the growing Internet of Things (IoT) environment, but the experience of her friend Cam, a medium-sized business owner, demonstrates that commercial carriers can also use IoT to forge new interconnected relationships with business clients while reducing carrier and customer risk.
Thanksgiving is a time for feasting and reflecting on the blessings and good fortune of life, and though the holiday may have been based on the traditions of the early settlers to the American colonies, the very first Thanksgiving would hardly be recognized by most Americans today. Did you know that:
Becoming a More Friendly Carrier
P&C insurers may not be well known for speeding down the technology highway, but advances in the Internet of Things (IoT) have many carriers sitting up and taking notice. To date, auto insurers have been the forerunners in adopting and utilizing connected technology to assess driver behavior and customize coverage, but opportunities in the age of the smart home are big for providers of homeowners policies as well.
Across the corporate landscape, the increasing ability to connect a multitude of devices, known as the Internet of Things (IoT), is reshaping business practices and operations. As auto insurers look to reduce costs and better meet consumer standards, IoT devices are emerging as an effective means of delivering a cost-efficient product tailored to the needs of the customer, including small- and mid-sized business organizations. Pay-per-mile or usage-based insurance (UBI) is an example of a new product offering fueled by IoT and embraced by customers. In fact, predictions are that 50 million people will be using UBI by 2020.[i] As insurers evolve to meet rising consumer expectations, strong digital capabilities will pave the way.
The small- and mid-size commercial market accounts for 95% of all businesses,[i] representing a lucrative field for many insurers. Currently, very few commercial lines carriers are investing in digital proficiency to serve this segment, focusing predominantly on agent channels, but there are strong signals that commercial carriers need to step up to digital engagement.
In a recent carrier survey by Bain & Company, 70% of respondents indicated that they would be willing to purchase related products, such as home security monitoring, from their insurer.[i] For P&C carriers, this should be one of those take-notice moments. Insurers that provide more than one insurance product to a customer already realize an 85% or greater share of wallet.[ii] Imagine the revenue-churning power of delivering a suite of renewable products, each geared to the unique needs of your customer. For insurers, becoming a P&C solution provider could open the door to endless possibilities, as long as they are positioned to capitalize on the trend.
The last time we checked in with Agent Todd, he was happily writing new business and acquiring new customers thanks to the digital capabilities and product selection he’s gained from his digital distribution platform. He knows that nearly 80% of his current and future customers want the ability to interact digitally, and he’s happy to have a platform that finally supports everyone’s needs, especially after talking to his friend Agent Ned who works for a competitor.Todd used to be a little jealous of Ned. His company was a forerunner in the industry, leading the charge toward anything new and better. In fact, they were one of the first to see the writing on the wall about changing customer expectations and decided the only way to reach digital superiority was to scrap their decades-old legacy technology for all new core systems. Well, all of Todd’s envious feelings disappeared today after he learned about the rollout of Ned’s company’s brand-new systems.
Lemonade is making headlines as the Uber of insurance. What does that mean, exactly? Lemonade is expected to disrupt the P&C insurance industry in the same way that Uber transformed transportation services. While much of the talk suggests that established P&C insurers won’t be able to compete in this new environment, many incumbent carriers are already contenders thanks to their digital distribution platform.