Tag Archives: insurance insurance content

5 Ways Cloud Helps With SME Insurance

In the past decade, a number of organizations have adopted cloud technology. As reported by Forbes in 2018, 83% of enterprise workloads will be in the cloud by 2020.

The benefits of the cloud become especially valuable for SMEs (small-to-medium enterprises) without the infrastructure to support their own systems, let alone the staff to dedicate 24/7 to uptimes. Cloud computing allows insurance SMEs, including brokers and smaller carriers, to offer enterprise services without the overhead.

Cloud opens the door to digital systems without constraints. Cutting-edge tech used to be reserved for large organizations with the funds and capacity to deploy, manage and maintain their systems. It’s is now open to organizations of all sizes through the cloud.

Here are five ways cloud-based systems allow insurance SMEs to become more competitive:

1. You avoid costly up-front investments

One of the most limiting factors for the growth of a small business is the up-front capital to invest in competitive technology. Traditionally, engaging on the same level as enterprise competitors meant investing many thousands of dollars in infrastructure to support the technology of the day. Cloud computing companies generally bill month-to-month for the use of their infrastructure, which is more manageable for growing organizations. You rent rather than own. If you ever become dissatisfied with your cloud provider, you can switch.

See also: Cloud Takes a Starring Role  

2. You get the benefits of a built-in support team

Once you’re working on a cloud system, you get the benefits of an extended team. Not only does this reduce strain on yours, but it will also reduce your long-term IT costs. Depending on your contract, you won’t have to worry about the time, costs or staff required to make system upgrades or fix any hiccups in the system. Almost all cloud providers guarantee upward of 99.95% service level uptimes, which means their systems are always available and your clients will always get the services they expect. This will reduce strain, allowing you to better serve your clients and do what you do best.

3. You can lean on reliable security

Those same teams taking care of your system updates also work around-the-clock to ensure their cloud platform is secure. In addition to resources, cloud solutions bring to the table operational best practices and security standards, along with regular monitoring, patches and system fixes to ensure robust security you can depend on without added investments.

4. The system can scale to your business needs

As your organization grows and your software needs evolve, you’ll have an external partner whose system can grow with you. You won’t have to reinvest in new infrastructure to accommodate the needs for more storage or capacity. Cloud applications offer virtually infinite growth to meet the demands of your business and clients – at any size.

5. The cloud will drive innovation and offer better experience for your customers

Many benefits save money and time: two of the most critical factors in business. . The cloud makes it easy to streamline processes and can replace common tasks through automation and workflows. This frees employee time, allowing a better focus on innovation and customer service while you grow your business.

See also: Security for Core Systems in the Cloud  

Adopting cloud computing is a key way for smaller businesses to level the playing field with large enterprises and remain competitive in the insurance industry. Cloud can provide access to cutting-edge technologies and innovation without the burden of traditional IT costs.

The Great Millennial Shift

Until recently, the typical insurance customer was a baby boomer or Gen Xer, but that is changing. As these two generations mature, millennials – those born between 1981 and 1996 – are rising to take their place.

This emergence of a new consumer cohort comes just at the right time for insurers. The free flow of capital and technology has created a Darwinian Economy where survival depends on an insurer’s ability to adapt. Insurers have been feeling the squeeze as deal volume declines and renewals shrink. Regulatory barriers and the push to modernize the customer experience only add to the pressure.

In this fierce battle for market share, millennials present a new source of growth. Millennial businesses, homes and families need insurance. In fact, millennials already account for 16% of vehicle insurance spending, 12% of health insurance spending and 6.9% of personal and life insurance. Those numbers will grow as millennials enter their peak earning years.

As more millennials are ready to purchase insurance products, what will they be looking for, and how can insurers capture their share of the millennial wallet?

Shaped by the Great Recession

To better understand millennials, consider the economic climate in which they were raised. Millennials grew up as the tech bubble burst and the Great Recession hit. Along the way, they amassed huge student loan debts. When they graduated, finding good secure employment was difficult.

The Federal Reserve Bank has summed up millennials’ economic position compared with prior generations. They have lower real incomes than earlier generations did at a similar age, fewer assets and a greater debt load.

While millennials may appear to be a poor target for insurers today, their fortunes will change over the next 10 years. According to Deloitte, total U.S. wealth is expected to balloon to $120 trillion by 2030. As the Silent Generation and baby boomer share shrinks from more than 80% to just over half, millennials will see a fourfold share increase.

How can insurers prepare to serve this new market? Millennials are frugal and savvy shoppers. They do their research before buying. Insurance for this generation needs to be transparent and economical. Provide plenty of information on your website, and consider pay-as-you-go, usage-based insurance.

See also: Millennials Demand Modern Experience  

Millennials at Work

Millennials have been tagged as lazy and entitled but are more likely just misunderstood. They have a better work ethic than they are given credit for and are more financially aware than prior generations. As children of the tech boom and the Great Recession, they value entrepreneurship and the need to prepare for disaster. These experiences, above others, will drive their future insurance preferences.

In the small business world, millennials may be the most insurance-needy generation ever. Morgan Stanley and the Boston Consulting Group (BCG) estimate that, by 2020, millennials and Gen Xers will collectively own more than 60% of U.S small businesses, up from 38% in 2016. Millennials are emerging as a new source of growth for small business insurers.

What will attract millennial business owners to an insurer? Start with a digital customer experience. Morgan Stanley and BCG project digitally underwritten insurance will grow from $4 billion to $33 billion by 2020. They say, “going digital may be expensive and painful at first, but in the long run it will save time, cut costs and allow insurers to better tap the dynamic and growing opportunities in the small-business market.”

Millennials also value simplicity. Morgan Stanley suggests making “products less complex, with easier-to-understand terms and a less cumbersome claims process.”

The Tech-Native Generation

Millennials are the generation of instantaneous chat, purchase and socialize. From research to communicating, they are fundamentally different than their generational predecessors. Texting and smartphones are second nature.

For insurers, this means traditional channels may not be enough to engage millennials. They are online consumers and are more likely than any prior generation to purchase through a connected device. A recent study found that 85% of millennials own a smartphone, and 53% prefer to use it to shop online.

The mobile experience you provide is critical. One study found that perceived mobile usefulness and ease-of-use influence shopping attitude and purchase intent among millennials.

A final factor to consider is transparency. Millennials are savvy shoppers and will expect to understand a product before they buy. In a study from Label Insight, transparency ranks at the top of customer loyalty factors for millennials, with 78% valuing it.

See also: 3 Reasons Millennials Should Join Industry  

Explain coverages visually and complement your online experience with easy access to agents for complex questions.

Concluding Thoughts

Millennials are the first tech-native generation. They grew up accustomed to online transactions and instant response. They expect all the services they use to act this way. They are frugal, smart shoppers and very brand loyal when they establish a preference. Responsiveness, transparency and economy are essential if you wish to address this market. Offer products that are easy to understand, priced fairly and sold digitally, and you will capture your fair share of this new growth opportunity.

Excerpted, with permission, from “The Insurer’s Millennial Playbook.” Request a copy of the complete e-book at https://www.instec-corp.com/millennial-insurance-form.