The last 18 months has seen a huge amount of activity all around the world as regards innovation in insurance. With both incumbents and startups alike looking to capitalise on the advances in applicable technologies – such as Artificial Intelligence, Cogntive Analytics, Robotics (and Robotic Process Automation), Sensors (think Internet of Things), etc. – never before have there been as many ways for businesses to enhance their proposition.
However, are a lot of these companies missing the point?
There is no questioning the importance of enhanced productivity, more accurate and speedier decision making, better tailored services, exponentially improved user experience/customer journey, and better risk management (both personal and commercial). And the vast majority of businesses are doing a great job of tackling these issues. But one thing that has struck me is that much of this improved functionality comes at a cost to the customer – not necessarily a financial cost, but in many cases there is a demand on time at initial engagement.
The reason I worry, is that these businesses are still thinking like traditional insurance vehicles – even those where the people innovating have little or no background in the sector – or, at the very least taking advice from experts from within the sector. I will not name names, but I can think of any number of fantastic propositions that will ultimately make a huge difference to the customers level of protection or perhaps their behaviours relating to risk – which is great – but they are expecting a commitment of customer time to offer this service. Let’s be honest, we all want better things; better houses, better cars, better jobs, better financial products, better everything. But who among us is actually willing to spend their own time getting those things? Too few I fear…
Perhaps I’m being overly cynical, but the furthest many people are willing to go to improve their financial position is to buy a lottery ticket. In an age of entitlement where so much is done for us and given to us, I worry that too few people are willing to work hard to get what they want. The age old cliché of ‘short term pain, for long term gain’ is undermined by the reticence of the many to take any pain at all.
What does this mean for InsurTech’s?
If you really want to get a slice of the big pie (where volume of customers is of greater importance than individual value), your offering has to be more convenient, more straightforward, and less complex, whilst also being competitive on price, and demand little-to-no additional effort from the customer.
Please don’t take this as negative sentiment to the InsurTech community, I can think a number of businesses that have focused on painless, more simple interaction with the customer at the core of their being. But those businesses that believe people will happily or easily change deeply ingrained habits are in for a rude awakening… It doesn’t matter how much better off they will be afterwards!