Examples
Here’s where new players come onto the stage. They are revolutionizing the insurtech space and designing data-driven experiences. WeFox Group, a German insurtech startup, has grown its revenues to over $100 million and serves more than 500,000 customers, which makes WeFox Group a leading insurtech solutions provider in Europe. The WeFox Group has several insurance brands, of which one of them is One Insurance which increased its revenues tenfold in one year.
One is Germany’s quickest-growing provider of third-party liability and household insurance. The competitive advantage One has is in its ability to make use of big data and understand risk in a much more technology-driven way. It uses predictive risk insurance and geotriggering so that insurees can build short-term insurance around their life. It also allows insurees to both assess the risks and rewards of their injury insurance and create custom insurance packages.
4. An exemplary customer focus
Present-day insurance customers have high expectations of insurtech providers. According to Accenture’s Global Consumer Pulse research, only 29% of insurance customers are happy with their current insurance providers, and as few as 16% are going to buy more from them.
According to McKinsey’s research, the five key factors driving customer satisfaction are:
- Claims settlement speed
- Simple communication with the insurer
- Professionalism and insurer knowledge
- Insurer etiquette and culture
- Smooth, simple, and transparent processes
It may be surprising to find out that ‘settlements paid’ ranks in 12th place, while the insurer’s knowledge, professionalism, etiquette, and politeness are much more important. In other words, the users care more about the service than about getting paid.
Why does it matter?
An exemplary insurance technology provider will utilize digital innovation to obtain insights, offer personalized services and scale, and profoundly collaborate and connect with its customers. It will excel at delivering a tailored customer experience to their various segments and will build trust within its brand. Insurtech providers that take the initiative to provide their clients with a wider range of high-quality products and services are better positioned to obtain a leading role in the industry.
Therefore, insurance companies that exploit the full capabilities of digital transformation and adapt to the needs of current and potential customers are likely to have the advantage and win the customer’s heart and business.
Examples
A great example of a digital-first insurance company is Lemonade Insurance. It’s clearly outperforming its competitors and has invented a new insurance business model based upon behavioral economics, technology, and digitalization. The main value proposition is “instant everything,” with 90 seconds to get insured and 3 minutes to get paid. With this simple offering, Lemonade quickly won customer loyalty by providing a personalized approach and being very easy to use.
Lemonade uses AI and chatbots to allocate insurance policies. It allows its users to file claims on their desktop and mobile (via Lemonade’s iOS and Android apps) without engaging with insurance brokers. Corporate social responsibility is another feature of Lemonade’s business model, as a part of its profits goes to nonprofits of the customers’ choice in Lemonade’s annual “Giveback” program.
5. Prioritizing strategic digital transformation
As we venture further into the digital era, the importance of a comprehensive and modern approach to insurtech strategy cannot be overstated. State-of-the-art technology, agility and flexibility, big data utilization, and an exemplary customer focus are the four previously identified key elements that shape this strategic approach. Now, however, it’s high time to turn our attention to the 5th crucial element: prioritizing strategic digital transformation.
Why does it matter?
In an increasingly connected world, digital transformation is more than just a buzzword — it’s a necessity for the survival and profitable growth of any business. For insurance companies, a strategic approach to digital transformation can redefine how they interact with customers and also streamline internal processes, which can ultimately lead to improved customer experience and operational efficiency. This step can be crucial in establishing a competitive edge in a rapidly evolving industry.
Examples
Let’s consider the example of Allstate, one of the largest insurance providers in the U.S., which has made significant strides in their digital transformation. They developed an AI-driven tool called “Virtual Assist,” which allows body shops to interact in real-time with Allstate’s remote estimators, speeding up the assessment and repair process for customers.
Furthermore, Allstate employs predictive modeling and Machine Learning in its underwriting and risk assessment processes. Their “Drivewise” telematics program collects data about policyholders’ engaged customers’ driving habits, allowing them to predict risk more accurately and provide personalized pricing models.
The company’s efforts to utilize these technologies have greatly enhanced the customer experience and operational efficiency of the current insurance model, thereby illustrating the transformative potential of AI and Machine Learning in the insurance industry.
Conclusion
Technology has substantially changed the insurance industry. It is an unstoppable process. Auto insurance and insurtech businesses are embracing it by implementing innovative digital technologies and models to make the insurance processes easier and to provide a seamless digital experience to their customers.
These five components of technological disruption, with all the given examples from the insurance industry, are not new. However, the successful implementation of digital technologies is crucial to matching the speed of insurance firms’ actions to the speed of business opportunities. These actions are not trivial because they can improve business performance and customers’ lives, and ultimately disrupt how we measure our milestones.
By reorganizing your mindset to manifest agility and flexibility, and also by implementing AI, big data, and AR & VR in your insurance company, you can get on the path towards sustainable and persistent growth and development. Contact us to get an in-depth understanding of how digital transformation in the insurance industry can help your business grow.