ITA Pro Magazine - August 2016

Insurance has traditionally been an insular industry, relatively unaffected by what goes on outside the industry. Of course, factors such as catastrophes or market conditions have an effect on insurance, but in terms of fundamental changes to operations or the business model, insurers tend to lag behind the developments taking place in other sectors.

To some extent, this has been by design and that’s perfectly logical due to the nature of the business. Insurance companies are in it for the long haul, and offer products with the promise of a potential future fulfillment.

Until recently, insurers have not had any desire to change rapidly in reaction to outside forces. Doing so would be a challenge anyway, due to the regulatory regime and the need to have vast amounts of loss histories to support the creation of new products. The winds of change are stirring and today’s headlong sprint into the digital, connected world demands that insurers build capabilities for more rapid change. Now, more than ever, it is vital for the industry to look at other industries and societal trends to spot new ideas, enable innovation, and reposition their companies for future success.

Insurers should examine three areas to gain a better understanding of evolving customer expectations and to find sources for new ideas. First, observe how customers interact with companies in other industries to learn what is influencing customer expectations.

Second, explore what is happening in the startup space, for both insurtech and other new technology companies.

Finally, assess innovation outside of insurance. How are companies in other industries approaching innovation and how can insurers leverage what they are learning?

Customer Experiences Outside Insurance

There is no question that customer expectations are consider-
ably different than they were 10 years ago. This does not apply
only to P&C personal lines or L&A individual customers.
Business customers also have raised expectations. The individ-
uals that work for those businesses are influenced by their own
personal experiences, and the technology now used to interact
in a B2B environment has also significantly improved.

The question, then, is what do customers have in mind as “the excellent customer experience” when they are dealing with insurers? At each phase of a typical insurance lifecycle, the customer may be comparing their insurance experience with an outstanding experience they recently had with a different type of company. This causes the bar to be set even higher for insurers.