New Conclusions for P&C Insurers

The customers want to drive. Are insurers prepared to thrive once we’ve handed them the keys?


The impact of business and consumer trends is sometimes seen more clearly when we link them. For example, if you follow the progression below, you might come to some new conclusions about where and how P&C insurers should be targeting their development strategies.

  • In 2019, personal savings in the U.S. were $1.2 trillion.
  • In 2020, personal savings in the U.S. skyrocketed to $2.3 trillion.
  • Gen Z and Millennials are investing outside of their retirement plans at higher rates than predecessors, but their investment tools of choice are up-and-coming platforms, such as Robinhood.
  • Robinhood holds a 37% market share, over Fidelity (26%) and Acorns (23%).
  • Personal wellness expenditures are on the rise, with individuals looking to improve their health

All of this points to a renewed desire for financial control, self-sufficiency and protection from catastrophic economic impact. At the same time, long-held insurance policies will come under scrutiny by financially conscious customers seeking price and value.

The message is clear. A volatile world has generated scrutiny by individuals and companies. They want to prepare for anything by shielding themselves against loss and doing what it takes to keep the keys to their future in their own hands. The customers want to drive. Are insurers prepared to thrive once we’ve handed them the keys?

Innovating with the customer at the center

Majesco and Capgemini have jointly released a thought-leadership paper, Embracing Innovation and Growth Opportunities in P&C Insurance. We used the paper as the springboard for a discussion on why P&C insurers need to reinvent themselves to fit new market needs. In this blog, we’ll look at how creating an engaging customer experience will invigorate an insurer’s strategy and allow the insurer to capitalize on platform technologies.

Responding to change. Changing to respond.

At a high level, insurers need to accomplish two related goals.

  1. They need to respond to change by shifting from push to pull. They need to transform the insurance product into something that is bought, not sold.
  2. They must improve their speed and agility. They need to transform their operations and technologies to become responsive to market changes and opportunities. The faster they can bring products and channels to market, the more effective they will become at capitalizing on trends.

Shifting from push to pull

In this new insurance era, nearly every process is rapidly becoming frictionless, including buying. If distribution channels are easy to use, with products that are easy to understand, insurers can grow through a friction-free, multi-channel distribution system. According to the World Insurance Report 2021 by Capgemini and Efma, more than 70% of customers expect a seamless multichannel experience for policy research and purchase. The benefit of adapting to these channel dynamics is that we move from needing to sell people on purchasing insurance to introducing insurance that is ready to be bought seamlessly at the point of need, creating a scalable, sustainable business model.

Technology is fueling customer expectations, altering and expanding markets and channels through which insurance is sold, including automotive, transportation businesses and Big Tech. To prompt customers to buy insurance products independently, in addition to identifying customers’ needs and expectations, insurers have to understand and adapt to their behaviors. Customers want to buy where, when, how and from the provider that offers the best fit.

Role rehearsal

Crucial to this is the expansion of partner ecosystems where insurers can assume multiple roles, from the owner of the unifying experience to the orchestrator of the products and services or provider of products and services. This will lead to a transition of the insurance value chain from a monolithic to a modular one, where the industry players will focus on their strengths within a specialized value chain. This can lead to two future scenarios as highlighted by the World InsurTech Report 2021 by Capgemini and Efma – Insurance embedded as a value add within third-party ecosystems or Insurance with added value at the core of the offerings.

What insurers achieve will depend on their ability to enter the market while it is still an uncrowded white space. As early insurers enter these markets, they will be experimenting, succeeding, failing and learning how to best fill their roles in the new insurance landscape. An insurer’s ability to enter now will provide greater long-term value. New revenue streams and access to broader markets will produce a multiplier effect. We are currently seeing this play out in the new affinity and program business models emerging in the market.

Insurers need to rehearse their role by adopting the “cultural persona” of flexibility. Firms with a cultural mindset that insurance must adapt to the customer will overtake competitors that believe policyholders must adapt to insurance.

What insurers will find is their choice of location in the ecosystem, the best pick of available roles and the first crack at innovative products that will change the face of insurance. The future depends on being in the right place at the point of opportunity.

Market moving through speed and agility

Of course, demand for insurance isn’t the only determinant for value. Innovation plays a role. Can insurers anticipate what’s coming and make forward-thinking, market-moving products and services? Can they use customer trends to predict customer needs and voluntarily give customers the keys to buying? It isn’t easy for any organization to gain the momentum it needs for change while the enterprise is in motion.

Industry trendsetters differentiate themselves by first giving up their need for legacy operational traditions that are built into their current business core systems. Instead, trendsetters shift their technological and administrative weight using a two-speed strategy for growth:

  • Speed of operation is for the traditional business model with mature systems and processes needing operational improvements through modernization and optimization using cloud and modern solutions based on application programming interfaces (APIs) that deliver in months vs. years.
  • Speed of innovation is for agile, fast and minimum viable product (MVP) models to explore, test and introduce products – many in 12 weeks or less. This strategy prepares the new business for the future using next-gen native cloud microservices and API-based solutions.

Visionary, inventive leaders see the market, customer segments and technological trends as a gateway to new revenue. Therefore, they are preparing to use new data sources, reach new market segments, offer innovative and appealing products, create exceptional customer experience and leverage new channels.

Leaders execute exceptionally well from Knowing to Planning and then Doing, aligning priorities to strategies and action. When these are not aligned, a Knowing-Doing gap emerges that defines insurers as a Leader, Follower, or Laggard, based on Majesco’s Strategic Priorities research.

Companies that procrastinate put their future at risk. The time for plans, preparation and execution is now – recognizing that the gap is widening and the timeframe to respond is closing. Leaders, as early adopters, are positioned to succeed.

Platforms fit customer-centric engagement and insurer needs for rapid flexibility

Leaders are using an outside-in view with the customers’ needs at the center. This is where platform technology makes a difference. Platforms are underpinning robust business models with network effects that disrupt traditional models, create tremendous customer loyalty and offer significant opportunities for growth. As a result, platforms are fundamentally changing businesses, and insurance is no exception.

The heart of the insurance platform is an orchestration of next-gen technologies, including cloud-native computing, microservices, APIs, new data sources, and artificial intelligence and machine learning, coupled with a vibrant ecosystem of partners that provide innovative or complementary products and services. This unified combination of components enables insurers to shift from owning complex core systems to owning greater technical agility and flexibility, digital fluency, innovation, and the speed to value required to meet today’s pace of change.

Leading firms are partnering to expand reach, adopt new capabilities, access new data and accelerate speed-to market.

  • Collaborating with ecosystem partners and insurtechs enables insurers to cross-sell/upsell and launch innovative products.
  • Carriers that deploy open APIs can reduce service cost, bundle services and strengthen the value proposition.
  • Insurers that collaborate with ecosystem partners keep informed about future product needs.
  • And, they can bolster their digital strategies, adopt new business models and add lucrative revenue streams

The most successful insurance leaders are increasingly adopting leading platform technologies and are innovating at a faster pace. They increasingly see themselves as technology companies providing protection services vs. insurance companies using technology to deliver insurance products.

For a deeper look at the report,  including the six key focus areas that insurance firms can leverage, be sure to download Embracing Innovation and Growth Opportunities in P&C Insurance. And, if you’re curious about all of the benefits you’ll receive through core transformation, you can receive an excellent primer and overview with Majesco’s latest webinar, An Intelligent Core to Transform Your Business.

Seth Rachlin, global insurance industry leader at Capgemini, and Denise Garth, chief strategy officer at Majesco, are co-authors of this article.

Denise Garth

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Denise Garth

Denise Garth is senior vice president, strategic marketing, responsible for leading marketing, industry relations and innovation in support of Majesco's client-centric strategy.


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