//Back To The Future: Insurance In A Digital World

Back To The Future: Insurance In A Digital World

By Robert Kooij, Digital General Manager, Insurance, Asia, DXC Technology

The nature of risk in the insurance industry is rapidly evolving. From environmental risk to cyber threats to new types of risk driven by technology innovations and evolving health trends — the needs of aging populations, driverless cars and just-in-time insurance for lifestyle pursuits — the market is fundamentally changing.

At the same time, the boundaries between the key industry stakeholders have blurred. While brokers have always owned the customer relationship, they are now seeking to use technology to further consolidate the ownership of that relationship, and through partnerships with insurtechs expand into insurers’ traditional domain. For their part, insurers in some lines are looking to disintermediate brokers, either working with insurtechs or building their own next-generation technology capabilities. At the same time, insurtechs are eager to build their business, creating their own products, competing with traditional insurers and working directly with reinsurers.

Just where all this ends remains to be seen. What is certain, however, is that success will be driven by an organization’s ability to create, drive or actively participate in an ecosystem and how well it can adjust to changing socioeconomic dynamics. In other words, can your ecosystem give customers what they want, how they want it and when they want it?

In today’s economy, the way the business ecosystem is structured and connected is integral to guiding buying behavior. Companies that thrive will be those that successfully create their own extended ecosystems — think Alibaba, Grab and Tencent in the Asia market — or become integrated into a well-established ecosystem. Consider the example of Apple and the iPod; while the iPod was possibly inferior to other MP3 players, it survived where others failed because of the Apple ecosystem’s power.

Building trust
Why is a connected ecosystem so important? Given that the insurance industry typically struggles to win customer trust, it makes good business sense to connect with groups that customers already trust and find ways to sell products as part of the broader value chain. For example, consumers in the Asia market may not trust their (very private) health metrics to an insurance company that tries to sell them health insurance, but they might trust recommendations from a fitness company with which they choose to engage and implicitly trust.

To reach new and untapped customers, companies should devise ways to market and sell their products as part of a broader ecosystem value chain. Therefore, it is important to get a thorough understanding of what customers want, when and how, based on what is happening in their lives at any given time.

Rather than try to sell life insurance, for example, insurers need to tap into the specific concerns of their customers based on lifestyle and stage in life, such as parents who want to make sure their children have what they need to be secure. It’s about knowing the customers, recognizing their social and economic concerns and constraints, and offering customer-centric services in real time. And that requires having a well-integrated ecosystem with the corresponding data to support that deep understanding.

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