The insurance market is constantly evolving.
With new challenges presenting themselves almost daily, industry players are exploring innovative business models to tap into the opportunities they bring along. One such is where insurance service providers and allied players come together to form an ecosystem where each player offers something that may be of immense value to another. This includes many insurtech companies providing novel services such as data providers, sales aggregators, analytics firms, or claims service providers. It’s not just the industry players that are proliferating. With the increasing adoption of digital technologies, increase in the volume of electronic data, and the ubiquity of mobile interfaces, the range of services and products have also grown.
Customers gain with ecosystem collaboration
New market players are offering products and services backed by improved capabilities across the insurance value chain.
Such capabilities, which include data aggregation, analytics, and more, help insurers to improve business agility. For instance, a data and analytics service provider may help an insurer conduct better risk assessment by improving the underwriting function. This enhanced business agility, in turn, triggers improvements across the insurance value chain such as ensuring products or claims are rolled out faster or customer servicing takes place faster. Niche services offered by market players such as insurtechs, sales aggregators, and more to insurers, in particular, are packed with innovation and cutting-edge technologies that can help insurers gain competitive advantage. What’s more, many of these providers cut across lines of business, so they can support rather than compete against each other. Insurance companies can capitalize on this synergy among players to move beyond boundaries and offer more to customers.
Insurers play the role of orchestrators and strengthen their brand value by offering greater value to customers.
As orchestrators, insurers consolidate services and bring players together to improve the entire insurance process, from the time a customer is onboarded and throughout the entire cycle of servicing.
For instance, they accelerate the underwriting process using a combination of traditional data sources and non-traditional ones offered by the market players. Traditional sources include motor vehicle reports and medical information bureau reports such as lab reports, analytics and predictions based on lab reports, and more; non-traditional sources are clinical lab data, electronic health data, biometrics, genomics, and more.
Besides, insurtech firms use predictive models to enhance the precision of underwriting. The use of risk ratings through various combinations of data sources has automated underwriting and straight-through processing. The resultant non-invasive and simplified underwriting enhances customer experience. When it comes to medical insurance, the possibilities of personalization and better pricing for customers are many, especially as more and more people are now willing to share their vitals through connected devices. This allows for vast amounts of data to be compiled and assimilated. Working in tandem with business service providers and insurtech players, insurers can improve the experience for the insured.
Customer experience at touch points
Anticipating and delivering as per customer expectations involve considerable reimagination of the customer journey.
Behavioral analytics backed by artificial intelligence (AI) and machine learning (ML) plays a vital role in ushering such richness in customer interactions. For example, AI and ML platforms offered by certain insurtechs predict the likelihood of life-changing events so people can prepare for the moments that matter. This adds a lot of value for fostering customer experience. Similarly, certain insurtech companies offer services for the early detection of medical conditions.
Claims automation is a big leap that insurers are attempting; some have succeeded, many are on the journey. Accelerating this journey is imperative in this fast-evolving market. A few insurtechs have automated the claims process and it keeps customer interventions at a minimum, thus enhancing the overall experience.
Ecosystem business models
Insurers collaborate with ecosystem players to formulate business models for packaged products or services.
A synergy among technologies and business services translates into exponential benefits. For example, integrating financial, insurance, or wellness products results in embedded services, which generate value for the end customers. As orchestrators, insurers play a key role in packaging and embedding services from various players and catering to their key business functions such as sales, marketing, underwriting, and more, potentially enhancing the customer experience.
The insurance ecosystem is expanding with a large number of players offering different types of services powered by cutting-edge technologies. Integration of these services can deliver immense value at the point of sale. Insurance organizations have started seeing the value of tapping into the synergy between these players. It’s time that insurers move from being a part of a business system to being orchestrators of the entire system. Working with ecosystem players to enhance customer experience at every touch point is a surefire way of striking the right note with customers.