When most people think of Valentine’s Day, they picture candlelight, soft music and maybe a glass of wine.
Evolving trends have finally combined to make 2018 the year of digital transformation in the P&C insurance industry.
President Trump’s much publicized Tax Cuts and Jobs Act (TCJA) was passed in December of 2017. Some companies reacted quickly to the reduction in the corporate tax rate, including The Hartford and Travelers, who announced plans to offer bonuses to employees netting less than $75,000 annually.
According to George Westerman with the MIT Sloan Initiative on the Digital Economy, “When digital transformation is done right, it’s like a caterpillar turning into a butterfly, but when done wrong, all you have is a really fast caterpillar.”
In response to changing consumer expectations and preferences, Rick Huckstep, insurance industry influencer and chairman at The Digital Insurer, sees insurers evolving from the , where risk and premium move from brokers and agents to carriers and then reinsurers.[i] Huckstep envisions an emerging new industry order built around the customer, where trusted insurers own relationships and automation makes it easier to do business.[ii]
In 1994, Amazon burst onto the scene as an online book and music mogul, only to ascend to meteoric heights selling everything from media to groceries through web-based channels. The Amazon influence on consumers has reshaped purchasing expectations and created an entirely new way of buying the things that people need and want.
CX consulting firm Walker predicts that by the year 2020, customer experience will overtake price and product as a key brand differentiator.[i] To remain competitive in the consumer-driven era, EY advises insurers to provide an omni-channel environment where consumers can move seamlessly between channels.[ii]
Based on the concerns of industry executives reported in the latter half of 2017, the property and casualty insurance industry should see a renewed vigor in 2018 when it comes to the industry’s need for digitally-enabled direct-to-consumer distribution.
Property and casualty insurers understand that technology is continuously reshaping consumer expectations and exerting pressure to change the way they do business. In our research, 73% of insurers are seeing demand for digital distribution, but delivering online buying is only the tip of the iceberg when it comes to meeting consumer experience standards.
Customer satisfaction remains a high priority for insurance executives as fast-moving InsurTech disruptors enter the industry with an innate customer focus, and innovators appear on the scene to support insurers with novel new tools to engage target audiences. PwC’s InsurTech study found that 94% of insurance executives are prioritizing the customer in their strategies,[i] a fact that did not go unnoticed at Insurance Nexus’ 3rd Annual Customer Engagement Summit held in Chicago the last week of November.