If you have gone three days without seeing the term "InsurTech," well, you are probably on a remote Caribbean island with no means of connecting to the outside insurance world.
And putting your head in the sand on some nice island might sound tempting, because InsurTech is exciting, but terrifying — simultaneously. Some may feel InsurTech is over-hyped, but that belief is probably more denial than anything else.
|Future of insurance
InsurTech is going to be a good part of the future of insurance. But, the challenge will be making it work for customers, distributors, and insurers.
The excitement is easy to identify with, but on the flip side of the excitement coin is personal lines "upload and download." It's been around for a very long time, and based on recent SMA research, has fallen down the priority list at some organizations.
While conflicting priorities is a reason in some instances, the more distressing responses marshal around the lack of strategic value or no business need. In reality, upload and download (and portal) are at a crossroads with InsurTech. No insurer with a vested interest in an agent and broker distribution model for personal lines can afford to ignore the situation.
SMA research indicates that 30 percent of the approximately 600 InsurTech startups being tracked are focused on disrupting and displacing conventional distribution channels — the largest of all InsurTech categories. What does this mean?
|Great urgency
With great urgency, personal lines insurers need to work with agents and brokers to ramp-up connectivity capabilities so that traditional distributors can execute sales and service transactions at the same speed and efficiency as the newly-minted distributors emanating from the InsurTech world.
Most personal lines insurers are not asleep at the wheel relative to the overall situation. Sixty-four percent of survey respondents indicate the top business driver for investing in agency connectivity is improved customer experience for the agent. The number two reason for investment, agent/customer retention, follows close behind with a 56 percent response rate.
Even though these two reasons correlate from a strategic and tactical perspective, 37 percent of respondents indicate they are mainstream investors in agency connectivity, not investing for differentiation, and another 11 percent indicate they are not investing at all. This leaves a fairly large hole for InsurTech-enabled distributors to drive straight through, gathering up customers … customers that used to be with traditional agents and brokers.
|Seamless and transparent personal lines sales, service
I'm a big fan of remote Caribbean islands, so any reader that has been on holiday and without the InsurTech reference is forgiven. However, for the remaining 351 days of the year, it's important to recognize that creating seamless and transparent personal lines sales and service transactions between agents and brokers and insurers is critical. This is the personal lines consumer mandate!
There are competitors in the market who have figured out the technology piece of the equation. And no one can assume that tradition and familiar corporate logos are going to protect market share.
Karen Pauli is a principal at Boston-based SMA. Email her at [email protected]. This article first appeared on StrategyMeetsAction.com and is reprinted here with their permission. Opinions expressed in this article are the author's own.
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
