Life insurance and retirement solution providers with an ear to the ground know their industry is in the midst of a sea change. The industry — which, until recently, comprised of traditional insurance carriers— has been shaken up by many new Insurtech entrants.
As these tech-savvy, digital first newcomers seek to grow and expand in the market, traditional insurers must adapt faster to stay competitive. The rise of digital ecosystems has played to their benefit, enabling insurers to integrate with partners offering specialized capabilities (think: digital origination and self-service, automation, data and analytics (AI) based underwriting, decision making and services, customer engagement) and provide a comprehensive customer experience through a single unified platform. This reduces cost and risk, makes both the front-end user experience and the back-end delivery more seamless, and — most critically — helps insurers better compete with newcomers as the industry evolves. Insurers further need to deal with the complexity of their multiple legacy environments separated by their product blocks or M&As.
Here’s a closer look at some of the benefits of the ecosystem approach.
Innovation. Ecosystems take the concept of partnerships to the next level, allowing insurers to interconnect a host of digitally accessible service offerings and products from partners in many industries — not just insurance. It also gives them flexibility for plug and play capabilities as needed via open APIs. For example, many carriers have partnered with payments-processing software-as-a-service (SaaS) companies to allow customers to make secure digital payments on an insurer’s website.
A fully built-out ecosystem of technologies and services will allow insurers to easily and cost-effectively launch new digital and direct-to-consumer products; continually expand their distribution channels; and future-proof their business by keeping pace with the disruptors. It helps them reimagine their business and operating model to continuously innovate and leverage best of breed capabilities.
Customization. Through the ecosystem approach, insurers leverage existing capabilities to create personalized, flexible solutions that are customized to their business — and to their existing and potential customer bases — without building everything from the ground up.
In the March 2020 article,
Future-proof. Cloud-based Platform-as-a-Service (PaaS) frameworks offer pre-configured, pre-integrated capabilities that give insurers flexibility within their ecosystem while removing the onus of handling complex integrations, future technology changes, cybersecurity, or regulatory upgrades. This not only increases speed and efficiencies; it frees up insurers bandwidth to focus on evolving their core business and supporting their customers instead of continuously investing in new technologies.
Personalization. No matter what the product, today’s consumers want personalized buying and services experiences; the days of an effective one-size-fits-all approach are over. In fact, we conducted
Yet policyholders also like to use different communications channels when interacting with brands, depending on what works for them at a given moment. Without access to a single cohesive view of customer data, their current financial products, , insurers can inadvertently create a disjointed experience for the same customer across different channels. Customers want Insurers to help them with their “holistic life needs” rather than sell them point solutions based on their products.
With an ecosystem of customer relationship management technologies that can “talk to” each other via open API, insurers can ensure customer data carries over between different channels — website, mobile messaging, social media, chat, telephone — to offer prospective and current customers a personalized experience tailored to their needs and preferences.
Increased Sales.
For example, insurers can automate underwriting with platforms that use AI, robotic process automation, analytics, algorithms, and more to assess risk based on data such as medical history, wellness/life style data, motor vehicle record, credit history, and criminal record. This allows insurers to pre-approve buyers and deliver quotes and pricing instantly, as part of the application process, while the consumer is thinking about buying — increasing their “propensity to buy”.
To retain current customers and reach new prospects, L&A insurers must find ways to provide the high-value, low-friction experiences that digital newcomers to the market are already offering. By creating an ecosystem of digital capabilities within a single integrated platform, insurers can deliver a personalized, high-touch customer experience for today’s mobile-first, digitally savvy consumers — helping even traditional brands compete on an equal footing with the current disruptors.
