How technology is changing insurance
We are constantly flooded with information about new technologies, innovative ideas, cutting-edge software and new generation tools. It’s getting hard to keep your head above water.
It’s what the French call “embarras de richesses”, or – confusing abundance. What’s an insurer to do? The real challenge, in this case, is to select the most effective solution for your business, the one that your customers, employees and partners would all benefit from.
However, not every “innovation” guarantees success. Not every industry has customers who are ready for changes, and not in all cases the changes result in desired effects.
A good example is a huge bang online banking has arrived with, and the growing popularity of its mobile version as opposed to, with exceptions, a slump in the development of these channels in the insurance sector.
A few years ago I was convinced that the users of online banking would go for online insurance offers in no time. As direct insurance bravely entered the market, it stimulated competition and reduced policy prices, mainly in motor insurance. And – it acquired quite a bunch of customers open to new communication channels. But what it did not do was reaching the critical mass needed to maintain effective performance. Direct insurers had to start cooperation with intermediaries working in the “meatspace”, and thanks to that the former are doing pretty fine now.
It is also hard to acknowledge any greater success of mobile applications targeted at insurance customers. The mobile channel has proved to be even more fickle here than the online one. Smartphone or tablet users seem to change their interests very quickly. They usually use several apps, mostly email, social media, search engine and gaming ones.
The question is not whether we will ever see claim adjusters equipped with Google Glass, but how soon it’s going to happen.
And here’s the rub: nearly 1 in 4 people abandon mobile apps after only one use. It doesn’t get any easier when you realize how seldom people get in touch with an insurer when they don’t have to. What kind of app would prompt them to do it more often? Some insurers seem to have figured that out.
It’s not just about being innovative though. In the end, there is always a CFO who asks about the results, sales volume, collected premiums, the new product line or channel performance, and ROI. The effectiveness of customer communication and relationships are important, but the innovation performance must be calculated, which technology enthusiasts often forget about.
Mobility and mobile technologies represent transformation that can be observed on a daily basis. Conferences such as Consumer Electronics Show (CES) or Mobile World Congress (MWC) bring a number of new tools and technologies that aim at changing our world. Insurers should pay attention to works on Smart Home or combine smartphones with cars (car connectivity apps).
They should also look into the idea of using drones (risk and loss assessment) or 3D printing (reconstructing damaged elements) for insurance purposes. The question is not whether we will ever see claim adjusters equipped with Google Glass, but how soon it’s going to happen. The device does not have to be, of course, of that particular brand as the market already suggests a number of alternatives. Wearables, i.e. clothing and accessories incorporating computer and advanced electronic technologies are growing extremely fast. Smart watches or bands transmitting data about the user’s health or behavior provide powerful capabilities not only in healthcare but also loss prevention or underwriting.
Mariusz Janczewski, Senior Insurance Consultant, Comarch