Editor's note: This article has been excerpted with permission from "Six Trends That Are Shaping P&C Digital Insurance Tech Strategies In 2021," a Forrester report that can be
The bedrock of the insurance industry is quaking. The year 2020 brought COVID-19, catastrophes, social crisis, controversy, and, for insurers, claims. It also tested the limits of insurance digital technology strategies as customer behavior changed drastically. The confluence of these and other forces are disrupting long-standing insurance equilibrium. The following forces will shape the insurance landscape and determine the priorities for digital and tech teams at property and casualty (P&C) insurers in 2021:
- Carrier priorities stay fixed on customer loyalty. The customer experience is now priority number one, and P&C insurers are focusing on making the purchase, use, and renewal of motor, dwelling, travel, and other retail lines simpler, faster, and more personal. And without the ability to walk into an agency, customers — and agents — need digital tools. When we recently asked US insurance customers what attributes they value in a financial services provider, 56% said excellent customer service, 45% excellent online experiences, and 31% excellent mobile experiences.
What it means: Count on easier-to-use digital tools and a focus on digital servicing education in the onboarding process. COVID-19 gave customers virtually no engagement option but digital, but past onboarding failures dumped digital service education into the laps of insurance call centers. It is time for digital strategy teams to face up to the secret shame of the industry: the failure to effectively onboard new customers by teaching them about — and how to use — digital servicing tools as part of the binding process.
- Upheaval comes to insurance products and packaging. The pandemic’s silver lining? Products that innovation teams — and customers — begged for but once died at the feet of actuarial, legal, and compliance professionals. Insurers got ahead of the regulators and stepped up as driving habits and the workplace changed. Smart carriers like Allstate and State Farm bought insurers offering coverage for cash-strapped consumers, while startups like Thimble added more flexibility in their by-the-month small business coverage.
What it means: Legacy IT org structures sabotage the product-packaging pivot. COVID-19 woke up insurers to the fact that what customers needed was going to be different — and immediate. But past tech decisions incapacitated insurers from delivering what customers and their own employees need now. Product-line silos that made performance easy to measure no longer work. Saying you’re an agile shop won’t be enough. The demand for new operational performance metrics to reflect how the entire tech stack organization supports the customer will require ruthless rethinking of success — and big thinking on culture and change management. Prepare for intransigence.
