There is a huge opportunity in the market right now for insurers who can embrace digitalisation, with research indicating that insureds are likely to switch providers due to a lack of digital capabilities.
Joanne Butler is head of product marketing and pre-sales at Charles Taylor InsureTech, a leading provider of insurance services, claims and technology solutions across the global insurance market, particularly in complex situations requiring specialist expertise.
Butler, who also leads the CTI women in tech forum and is a speaker at D&I and product events, explains to The Fintech Times why she thinks it’s the ‘golden age of insurtech’.
The world has changed immeasurably over the last two years, and I believe we are entering the golden age of insurtech. The pandemic has meant that projects which previously took years to come to fruition were delivered in months, creating a real momentum and opportunity for digital transformation.
With 57 per cent of insurance CEOs saying tech-driven innovation is the biggest trend impacting them, we see opportunity for digital transformation in every area of insurance. The changing needs of the end customer now means they are more reliant on, and more fluent in using digital technology in every aspect of life, putting increasing pressure on all businesses to innovate. Two thirds (62 per cent) of insurance CEOs are worried about changing customer expectations, which touches every part of the customer experience.
Creating new opportunities from digitalisation
Insurers and insureds can now access more data than ever to create efficiencies and help make smarter decisions that can have a huge impact on the bottom line. This is not just limited to the sales process, our global insurance clients are using digitalisation to create real efficiencies across the piece – an example of this is risk selection.
“Smart risk selection is not limited to the initial contract,” says Jennifer Hurst, sales director EMEA at Charles Taylor InsureTech. “An insured’s risk profile will change over their lifetime and insurers’ can now use digitalisation to ensure their book of business is aligned with their evolving underwriting appetite.”
Retaining the right risks
As much as the insurer may know exactly which risks it wants to keep, retaining good customers is another matter. Research from earlier this year shows us that 41 per cent of insureds are likely to switch providers due to a lack of digital capabilities.This can prove an expensive headache for insurers not least because of the increasing cost of acquiring new customers.
Today, we support many of our insurer clients to make the process as painless as possible through effective insurtech. Intuitive apps allow the insured to navigate the full claims process in one place. The data is logged with the customer policy so that each communication is instantly available to a claim handler should they telephone in. For large losses, the process is similar, allowing commercial clients to get their businesses back on track faster than ever, reducing business interruption claims at the same time. The tech also allows effective triage of claims so that claims that any suspicious claims can be highlighted and managed to reduce fraud.
For those who need to make a claim and have a positive experience, they are far more likely to stay with the insurer at renewal. For those who do not claim, the focus naturally shifts to making the renewal process as effortless as possible on both sides. Again, insurers need to check the risk hasn’t changed and matches their desired underwriting profile, while insureds need to feel that it would be better to stay with their current provider than go through the perceived hassle of switching. Real digitalisation of these processes can have a huge impact on effective client retention.
Effective MI to improve the bottom line
Where we see digitalisation really changing the game for insurers is in creating genuine insights that inform business decisions. Being able to see both high-level and more detailed data from across the business can show the overall and future health of the business, as well as opportunities for new products and markets.
For example, electric cars are more expensive to repair but their owners tend to make fewer claims, so this could be a good market to move into with the right risk profile. Short term insurance is another growth area which historically was not viable due to the high cost associated with setting up a policy, however app-based technologies can now put a risk on in seconds. At present, this growing demand for short-term insurance is still under-served, and we see an opportunity for growth here supported by effective technology.
There is a huge opportunity in the market right now for insurers who can embrace digitalisation. This is the golden age of insurtech and we are excited to be working with our insurer clients to radically change the way insurance business is done.
At Charles Taylor InsureTech, we have more than 30 years’ experience of working with global insurance businesses and a deep understanding of the technology challenges they face. We will be covering this topic and many more at the Insurtech Insights Europe conference on 15 March at 2pm. If you would like to attend this on 15 March, please register your interest.