Tag Archives: google and insurance

Google and Insurance: One Year Later

In January 2014, SMA published the research report, Google and Insurance: Far-Reaching Implications, which hit a nerve in the industry. We followed up in August 2014 with the research report, The Shifting Competitive Landscape: A New Breed of Industry Challengers, which generated even more discussion. We noted in both reports that the future of insurance is changing more rapidly than we expected. And for those insurers operating with the long-standing, wait-and-see attitude, we cautioned that ignoring the pace of change and putting off the use of emerging technology would put companies at risk. We strongly encouraged insurers to track and assess these trends, along with other outside industry influences, and to put together a strategy that would move them toward their vision as a Next-Gen Insurer.

Now it is January 2015, and our expectations for Google have come to pass. Google is getting approval for selling insurance on its Compare site in a large number of states via a number of different insurance partners. As we predicted in the reports, companies like Google would not underwrite the risk, but they would be the primary point of contact for the customer relationship, making insurers the providers of the insurance product within Google’s ecosystem.

Some in the industry may discount this as just another aggregator site from which to search, compare and select insurance, but that would be foolish. This move has much bigger implications for insurance. It represents a major disruption by a recognized innovative giant that brings an outside-in approach to customer engagement and empowerment. And the move demands that insurers re-imagine and reinvent a technology-enabled future.

This is just the beginning. Other industry companies from retail, automotive, technology and more are looking to leverage their influence, their offerings and their platforms to extend their customer relationships and experiences, which will either force traditional companies out – or force them to change. In particular, the technology companies have critical business attributes that are underpinning their rapid growth and influence:

  • Customer Engagement.
    They are leading the re-imagination of customer engagement models across all industries, setting higher bars for customer expectations.
  • Customer Demographics.
    These companies are part of the daily lives of customers from baby boomers to Millennials, representing a merging of the traditional with the future to create a new generation of insurance customers.
  • Digital Businesses.
    The companies all emerged as digital-based businesses, creating customer-driven, user-friendly business and operational models that have now become the table stakes in the digital revolution.
  • Innovation Leaders.
    Innovation is also table stakes. The investment and commitment of resources to innovation dedicated to driving new products, services and partnerships are redefining industries.
  • Data Masters.
    These companies have enterprise data management strategies and capabilities that position them as market leaders equipped with game-changing insights.
  • Capital-Rich.
    They have access to internal and external capital for acquiring or investing in new technology companies that can expand market reach, deepen customer engagement and put them at the leading edge of the digital and technology revolutions.

In a world of rapid change, the new competitors, emerging technologies, advancing innovation and fading industry boundaries are intensifying the challenge to traditional insurance business assumptions. How insurers respond to these changes – with a fresh set of views that combine both inside-the-industry and outside-the-industry perspectives – will very likely influence their future.

Google and other industry challengers are moving at breath-taking speed and on a high level, with innovations and capabilities emerging regularly, either through their own development or through acquisitions and partnerships. With each new capability, they are redefining everyday lives by how technologies are used and then creating products and services that leverage those technologies. And more companies outside insurance will follow, not only to compete but to capture the customer relationship and thrive in this new technology-enabled world.

While Google’s move was expected, it is the coming, unexpected moves from unexpected challengers that will intensify the challenge to traditional insurance.

The future continues to unfold before our eyes. We must assess the influencers of change and develop vision and strategies for a new future. We must begin to break down our legacy assumptions and open our eyes wide to the possibilities of a very different future – a future with new competitors and blurred lines between industries. A future that re-imagines and reinvents the business of insurance.

Striking a Nerve: Google and Insurance

To say we struck a nerve in the industry with the Google and Insurance: Far Reaching Implications research is an understatement! It was picked up by all the major industry media – in some cases multiple times. It has set a record for downloaded and purchased SMA research, generating a torrent of follow-up calls and discussions. It has been shared and used by executive teams for discussion and strategic planning. The companion blog for the research had nearly 10,000 views – and continues to be posted, tweeted and retweeted a month and half after it was published! 

So why has there been such a strong interest and reaction in the industry?

Well, one reason might be that there is a fascination and admiration for the competitive drive in Google’s transformation from a search engine to an innovator of technologies and solutions like Android, Google cars, Google glasses, wearable devices and others. And then there is the fact that Google is securing a strong, growing (and enviable) customer loyalty. Don’t overlook the challenge to other innovators like Apple, Amazon and Microsoft – it’s impossible to ignore, just like Google's impressive growth and financial results! But the appeal that underpins all of this is Google’s unwavering vision of making information universally accessible and useful. Having a huge imagination that is spearheading innovation in multidimensional ways doesn’t hurt either! 

As Google drives innovation, offering an integrated and seamless customer experience and making available the use of its ground-breaking technologies to people in their everyday lives, the levels of customer intimacy and loyalty continue to increase. In the opposite direction, the vast amount of data becoming available via some of these technologies concerning individuals and their cars, homes and bodies is breath-taking. The change will be transformative! 

This is why the implications for insurance are so great. Google is bringing an outside-in, customer-driven approach to innovation that is causing insurers to rethink, reimagine and reinvent their visions of a technology-enabled future. Google is organizing data, technology and location around people, creating a level of customer empowerment and -centricity unheralded in any industry, let alone insurance. Not only is this powerful, it is fundamentally changing the business of insurance!   

Innovation is no longer just a nice-to-have initiative. It has become a must-have, strategic, core mandate that will define a new era of winners (and losers). Why? Because the increasingly rapid pace of change is challenging decades of business traditions and assumptions and demanding a response. This is unprecedented in the history of the insurance industry. All the while, the changes just keep coming: new technologies, the mash-up of technologies and new uses for these technologies.

These changes are highly disruptive, but they are also transformational. One industry innovation leader whom we recently spoke to about innovation noted that: “There is an outrageous level of individualism – from devices, data and components that will break the traditional infrastructure, culture and systems of traditional insurers.” Companies like Google, Apple, Uber, Zipcar and others, as well as next-gen and emerging technologies, are intensifying this level of individualism. 

Many insurers, large and small, are struggling to get their heads around a comprehensive view or a full understanding of the impact that these influencers will have on the disruption and transformation of the insurance industry. That is why the Google and Insurance research report has provoked such a response in the industry – because it provides insights and a glimpse of the challenges and opportunities for the industry. It also points to why, as an industry, we need to rethink how we respond to and embrace innovation as the core of a new culture and keystone of a new future. 

Other industries, from retail to books, music and movies, have experienced the same thing the insurance industry is now encountering: the very foundations of their businesses are being challenged, requiring novel thinking, experimentation, innovation and adoption of the new and emerging technologies. As one industry leader and CIO recently commented, “Insurers must build knowledge, a network and an ecosystem of outside-in relationships to reimagine and contribute to their company’s future.”

This persistent and continual disruption will necessitate a new way of embracing change and innovation. It will require a culture and model built around continuing collaboration and ideation that extends outside the traditional insurance organization. This is why an innovation mandate is critical.  

The innovation mandate must track and assess trends and influencers both inside and outside the industry, prepare plans and scenarios, experiment and collaborate to gain competitive advantage. Unfortunately, the day-to-day operational demands, time constraints and shortage of expertise or resources for evaluating the many implications for insurance will find most insurers unprepared or unequipped to respond to this level of disruption. More troubling is the way that many insurers are continuing to operate with the long-standing approach of wait-and-see or being a fast follower. With the accelerating release of next-gen technologies, eager competitors, new influencers and increasing customer demands, failing to adopt a culture of innovation and collaboration could create a potentially unsurmountable risk to survival of the business.

For insurers, the coming years promise unparalleled opportunity to increase their value to their customers. Those that are best able to capitalize on the key technology influencers will reap the most in rewards. In contrast, those that do not prepare for the future will find themselves falling behind, losing both competitive position and financial stability. To capture the full potential, insurers must determine to create and participate in an ecosystem of outside experts and resources; inspire their leadership; and enable their journey of change, transformation and innovation. Why will this be so important? Because the ecosystem will integrate new ideas and thinking from outside the organization, and provide that outside-in perspective needed to break legacy assumptions.  

The innovation journey toward rethinking, reimagining and reinventing the business of insurance has started. Strategy Meets Action has joined the journey. Have you?