At Highwing, we always try to stay on top of the latest thinking in insurance innovation. Last week, we heard many interesting ideas at InsurTech Connect, the largest conference in the world for insurtech thought leaders to share their latest thinking, including some of our friends at Travelers and BrokerTech Ventures.
Most of the sessions we attended were focused on digital transformation, property & casualty, and the future of our industry in general, but we made sure to see a few others, as a lot of innovations in other spaces can be applicable to P&C as well.
Despite the many challenges and changes that have come with COVID-19, the overall tone of the conference was remarkably optimistic and solutions-focused. Customer experience, distribution, connectivity, and partnerships were common themes.
Here are some of our main takeaways:
Changing customer expectations is one of the key forces driving digital transformation across the industry. On a panel about adapting to evolving customer needs, futurist Jim Carroll challenged the audience to ask themselves how hard it really is for their customers to deal with them.
Consumers have come to expect immediate gratification, simple purchase processes, and clear value for everything they purchase. Almost every speaker noted that insurance is missing the mark on these expectations, with one panelist mentioning that, like going to the dentist, buying insurance is a painful necessity. The purchase process as a whole takes too much time. While this is a problem, it also means that there is a massive opportunity to improve customer experience using technologies that are now becoming available to the industry.
Brian Hetherington, Chairman of the ABD Team (a BrokerTech Ventures Firm), discussed the promise of “real time insurance” where risks can be covered as they come up, made possible by technologies like natural language processing, AI and blockchain.
The common vision shared by several speakers and panels was one of an industry that moves faster, does business with more empathy and humanity, and delivers clear and essential value. COVID has accelerated this shift, especially within property and casualty lines. Traditional commercial P&C tends to focus on protecting an inventory of real assets. Now that we’re all working from home, the approach needs to be less about “what's the make and model of the vehicles?” and more about “how can we help your business?” In other words, the key shift is toward a more consultative approach to bringing holistic risk management and advisory solutions to clients, rather than focusing narrowly on risk transfer.
Closely related to customer experience, innovating distribution was a key theme. As new technologies enable insurance to be procured faster, brokers will need to expand their value proposition to stay competitive.
While distribution for personal and small business lines are shifting to digital channels, most speakers agreed that commercial P&C is an area where brokers will continue to play an essential role due to the unique and complex needs of businesses, which demand specialized expertise and highly tailored solutions.
The ability to easily access and use data is becoming a core strategic capability for brokers. Those with a good command of data can create unique and valuable insights that make risk more personal and actionable for clients, and deliver a faster and easier buying experience.
On a panel titled How Insurtech Is Impacting Complex P&C, Jay Rajendra, CSO & CIO of Arch Capital pointed out that the customer can serve as our distribution; improve your customer experience and your customers improve your distribution for you. On the same panel, Carla Owens, Chief Digital Officer at Markel, added that using partnerships to offer additional services and capabilities for clients was core to this strategy and to providing the most value possible to clients. With this approach, customers will return, and recommend your services as they go.
While a faster customer experience with more empathy and value for our clients sounds great, many speakers pointed out that these goals aren’t possible without first improving data connectivity. Brokers simply need easier, faster access to data and more efficient ways for brokers, carriers, and clients to communicate. The ability to create a free flow of data, communication and money between these parties is the biggest barrier to moving innovation forward.
The key issue is access, not volume. “In total, there is more data available now than ever, but it still takes most insurers 1-2 years to adopt a new data source” points out Sean Harper, Co-founder & CEO of Kin Insurance. “Adopting new data sources can lower claims by 30% or more.”
Several speakers said that speed of access is what largely determines the value of data. That’s because data loses value and usefulness if it’s not current. Having data that is cleaned, enhanced and up to date is a first step to Innovating. Partnerships with technical firms can help streamline your exchange of data, and help you easily gain new data and analyze it in new ways.
Besides connectivity, partnerships are seen as another key enabling force for further innovation. Rooted by legacy systems, it can be difficult for brokers to determine where to start a digital transformation. Given the complexities of P&C, listeners were repeatedly advised to avoid doing everything themselves.
Jim Carroll urged brokerages to deliver surface-level simplicity to customers, and keep all the complexity of a modernized digital infrastructure hidden underneath. Rather than attempt this alone, he recommended partnering with more sophisticated software providers and specialty organizations to do this quickly and effectively.
Similarly, Jay Rajendra expressed how more data also means more learning, and working with insurtechs helps firms understand their customers and even their own business more. "You can not, and should not attempt to do everything on your own" he explained, "Technical partners are key.”
Learn more about successfully implementing new tools and innovation initiatives.
Leaning on 3rd party solution providers allows brokers to access a new pool of knowledge and experience, iterate on new digital initiatives, and move substantially faster than they would if they attempted to do too much work in house. Focus less on building new software and systems, and focus more on how to test and operationalize new tools from 3rd parties.
Interested in learning more about how you can apply these to your organization? We'd love to help! Drop us an email at hello@highwing.io, check out our other blog articles and listen to our podcast, Zoom Into Insurance for more tips on digital transformations in insurance.