The insurance landscape is changing. As we enter the digital revolution the risks and opportunities to insurers and brokers are great, Insurtech startups are fusing technology, data, customer preferences and social media to turn traditional advice on its head.
Digital disruption will affect brokers and insurers in a big way, though it may take a few years before we really understand the scale of that impact. It will at the very least mean that insurers and brokers have to change the way they approach servicing customers, but at the other end of the spectrum, it could mean that incumbents have a very difficult time remaining in business.
Amy Gibbs, Digital Communications and Content Strategy Manager, ANZIIF and a regular speaker on the risks and rewards to be found in the wave of technological disruption facing the insurance industry says: “Customers drive disruption, and as other industries have had to change to keep those customers, so will the insurance industry. It isn’t about the technology per se, it’s about what people want and how companies have to respond to that when customers have other, better, options available to them.”
While it may take longer for disruptors to disrupt the Australian market given the regulatory hurdles that they will have to clear, they will get here. Amy elaborates that understanding what these disruptors are doing overseas gives Aussie brokers the advantage of seeing what customers are responding to overseas and adapt to be able to offer those services themselves, before disruptors have the opportunity to have an impact on their customer base.
“At the moment, the disruptors that brokers need to watch out for are the ones that essentially do the same business as a traditional broker, but with better interactivity, transparency and convenience to the customer. Embroker is a good example of this. They’re a cloud-based risk and insurance management platform that uses predictive analytics to recommend coverage and optimise pricing, interactive dashboards to manage all policies in one place, automated processes, benchmarking against peers, claims tracking online and the ability to keep tabs on vendors’ coverage. While most of the service is self-driven, there is also personalised service when businesses need that bit extra.”
It is imperative that brokers don’t miss out on time, the opportunity to disrupt your business before someone else does is crucial.
“If brokers and insurers pay attention to the disruptors, watching and adapting to retain their customers, then there isn’t a need to panic as they can still retain customer trust. However, disruptors have different business models, less overheads and are more agile – so if incumbents don’t treat the potential disruption with the seriousness it deserves then there will be reason to be fearful.”
It is important to remember nearly all disruption is driven by customers, not technology. Customers are becoming increasingly sophisticated and want very specific things from the business they interact with. Specifically, transparency, convenience, personality, trustworthiness, timeliness. Using technology to achieve these things is what disruption is about, so brokers and insurers need only to look at how they best serve their customers in relation to those traits to begin addressing their own disrupting.
“Pay attention! Keep changing, develop a culture of innovation and openness. Listen to customers – and genuinely try and do whatever is possible to keep them happy.”
Hear more from Amy at the Digital Disruption: Insurtech, Social Media & Insurance session at the 2016 NIBA Convention, 11-13 September in Melbourne, where Amy and other thought leaders will explore some of the socially-focused insurtech start ups challenging the status quo. Register now for the convention here.