Tag Archives: world insurance report

My Top Tips From EXEC InsurTech

I usually approach conferences with mixed emotions, whether attending, learning and networking or speaking. Ultimately, for me, conferences and events are about connecting people and ideas and moving the debate and understanding forward. To this end, I was delighted to join some great folks over at EXEC Insurtech in Cologne, which for me ticked all the boxes. It had a really interesting mix of folks attending, old and new, a serious number of VCs (AXA Strategic Ventures, Commerz Ventures and many more), There were angel investors and more and, importantly, a whole host of new start-ups, many very early-stage. There were some really great ideas from outside the U.K. market, so new to me personally. And it’s always great to see SPIXII, RightIndem and other graduates from the InsurTech StartupBootcamp in London with Sabine VanderLinden.

See also: InsurTech Boom Is Reshaping Market  

In addition to a number of panels where I was able to share the latest views from the Capgemini 2016 World Insurance Report, I was asked to share some perspectives with the group on InsurTech. I wanted to share the same here.

  1. We are in a bubble. By “we,” I mean, those who are here at EXEC InsurTech and see the opportunity. Not everyone sees the world this way, yet! Many of you know I’m a firm believer that disruption is here and now, coming at us thick and fast.
  2. Stand out. Whatever reports you read, be it the tech journals, insurance news or the traditional annual reports from existing carriers, they all talk to the disruption of the traditional insurance carrier (following the “unbundling” of the banks). There are now hundreds of start-ups in this space. It always amazes me to hear Sabine and theStartup Bootcamp team talk to how many start-ups they talk to prior to shortlisting to their final cohort. Make sure that when you are on stage and you have three minutes to pitch, you stand out. Don’t be the me-too.
  3. There have been no really big failures yet. There is excitement and buzz around what people are up to, where disruption is coming from and what part of the insurance value chain people are attacking (sales, underwriting, distribution, etc.). Given this, there has been record investment in the sector; the prize is huge, with a $5 trillion market opportunity. Matthew Wong and the folks over at CB Insights continue do an amazing  job at tracking deal flow, more than $1 billion so far in 2016. The example nearest to a failure that I called out was Zenefits, given its recent re-valuation. Another one was mentioned from the audience — CSS in Switzerland, I believe, but please correct me if I have this wrong.
  4. Partnering is key.  Given the history, tradition and especially the speed of the industry, my view is it’s best to partner and work with the traditional players as opposed to going all out head-to-head today. This may, of course, change over time. There are some really great examples of partnership already.
  5. Evolution or revolution? This is one of my favorite topics. Unlike banking, where I believe #FinTech has unbundled individual services ofmatthew  a bank, insurance start-ups have taken a different approach. Underwriting, for example, is not a category all unto itself nor one that I have seen folks go after in isolation. All need other parts of the insurance value chain to be successful. There are great examples of start-ups evolving each part of the value chain, across products, distribution, sales, etc. Matteo Carbone put together some good thinking a while back on this with his mental framework covering awareness, choice, purchase and use, as did Venture Scanner here in a series of visuals. For now, we are primarily digitizing and simplifying the existing approach and process.
  6. Product mindset. We simply need to move away from this. It will take generations for a complete mindset change. It will happen, in my view, when start-ups move to an “all risks” or truly customer-centric approach (not just better service experience). My two golden rules here remain: relevance and convenience. At what point does insurance become frictionless?
  7. Every carrier is partnering. Pick your partners carefully. I was talking to one of the start-ups that has now engaged in 30-plus pilots. While this is really encouraging and great for the start-up, every carrier is a) partnering, b) building a lab c) working with an accelerator. Make sure you don’t become part of a badge-collecting journey. Are your and the insurance carrier’s ambitions, culture and outcomes aligned? Make sure we are all walking into these partnerships with eyes wide open and with a clear plan of what happens if a partnership is successful.
  8. AI/data/bots are big and cool. That is all! There are some great use cases and examples developing here. We heard from SPIXII and Insuragram, just two examples of how AI and bots are looking to solve some of the business and engagement challenges.
  9. Don’t be the fad. See #7 and #8. Over the last few years, I’ve seen the rise and rise of big data. Then came digital. Now it’s blockchain and chat bots. My point here is that these are all great technologies. But don’t be the technology looking for a business problem to solve — sage old advice you will hear again and again.
  10. Beware of the silos. Many start-ups are working with global carriers. Just because we work with them in one country doesn’t mean they all talk, are connected seamlessly internally and exchange ideas and key learnings. The same is true for in-country and across lines of business. Many people operate in silo’ed P&L models where you may end up doing multiple different engagements with the same global carrier. Joining the dots may not always be right for you. Think speed! You’re in a relay race. Moving parts of an organization to the start line is often easier than moving the whole team at once. As the saying goes,“think big, start small, act quickly.”
  11. Customers (end customers) need to be ready.  With all these cool new ideas and apps that can disrupt traditional insurance, our challenge is often not whether something can be done but whether customers will be ready. We know it can be done; everything is possible! But there are many reasons why customers take a while, often a long while. Telematics is 25-plus years old, but it’s only now becoming more widely adopted. Even now, take-up is still relatively slow (except in Italy).
  12. Talent. Above all, there is an arms race for talent out there. Bringing together InsurTech and traditional insurers is one of the best ways of ensuring (no pun intended!) that we continue to attract and leverage some of the greatest talent in the marketplace, promoting Insurance along the way as a great place to excel and challenge the status quo.

See also: InsurTech Forces Industry to Rethink

So back to one of my initial comments — what conferences do for me. At this one, particularly, I was delighted to meet with so many folks looking at the market from different angles. Conversations about Europe were especially interesting given the recent U.K. BREXIT decision.

Finally, getting to exchange ideas with Matteo Carbone of Bain and Florian Graillot of AXA Strategic Ventures in person was the icing on the cake. Gentlemen, until next time. My thanks to Robbie Boushery, Moritz Delbrück and the team at Pirate Summit for bringing this all together.

So what do you think? Good sage advice? Something missing? What would you add/remove from my list?

Looking forward to continuing the debate!

How to Captivate Customers (Part 1)

ITL Editor-in-Chief Paul Carroll recently hosted a webinar on “Captivating Customers With All-Channel Experiences,” featuring experts from Capgemini and Salesforce.com and the former chief customer experience officer at AIG. To view or listen to the webinar, click here. For the slides, click here

While insurers have focused on meeting the increasing demands of their customers and invested in customer-facing operations, they are continually losing ground. The World Insurance Report 2015 by Capgemini and Efma reveals that positive customer experience ratings declined at an alarming rate in the past year, from an already low 33% in 2013 to 29% in 2014.

This should be a wake-up call to the industry.

Insurers urgently need to accelerate their ability to deliver exceptional experiences and captivate customers — or risk losing them.

Of the 30 countries surveyed in the World Insurance Report 2015, 80% recorded a decline in the percentage of customers with positive experiences. Ten countries experienced a drop of more than five percentage points. They include the U.S., which dropped 8.3 points, marking the largest decline of all countries surveyed.

Although the trend is clearly toward digital interactions with customers, the agent channel remains the preferred channel overall. It delivered positive experience levels that were almost double those of digital channels.

But the digital/analog division has become a false one. The fact is that all channels have to fit together seamlessly to captivate customers.

Customers have to be able to start a conversation in any way – face to face with an agent, on the phone with an agent, online with the agent, online at the carrier, at a social media site  – and pick it up later in any channel, in mid-sentence.

Instead, at the moment, customers often wind up dropping partway through the process. They may begin a query online, get a rough idea of a premium and then go off to talk to their spouse or to do some research. Then they go back online to continue the process or call an agent, find they have to start over, get frustrated and stop.

We have to get to an omni-channel world, where everything is seamless and efficient from the customer’s point of view.

Falling customer experience ratings, coupled with a growing number of market disruptors (See exhibit  below), indicate that insurers need to take swift action to become truly customer-centric. They must improve their digital services and seamlessly connect the customer experience across mobile, social, digital and agent interactions. While doing so, they must ensure the important agent channel has the tools and full customer visibility to effectively sell to and service the customer in the digital world.

Exhibit-1

Yet many insurers will find it hard to move quickly. The World Insurance Report identified seven core capabilities that insurers need to develop to enhance customer experience and take advantage of opportunities created by disruptors. Yet we found most insurers’ maturity levels to be lagging in all seven core capabilities:

Exhibit-2

Insurers exhibited the lowest maturity levels across three essential areas:

  • Connecting elegantly: All channels, including social media, are fully integrated in real time for all interactions, so that customers always feel that the insurer knows them well and that the agent can have an informed dialogue with individual customers.
  • Engaging regularly: New content is continually created and published to the relevant customer segment through the right channels at the right time. Advanced content management and “gamification” platforms are put in place to take customer engagement to the next level. Agents have the tools to easily and frequently engage with customers via mobile channels, text messages and other digital means.
  • Seeing completely: The insurer has a comprehensive view of each customer and understands each customer’s relationships (e.g., family, businesses.). Accurate, real-time data supports predictive analytics, planning and delivery.

Raising insurers’ maturity in these three areas, along with having a fully integrated agent workforce, can accelerate the ability to deliver an exceptional customer experience across all channels.

Only by developing comprehensive plans for proficiency – including a comprehensive look at the technology that underpins each capability – can insurers hope to counteract the decline in customer experience ratings that threaten insurers’ growth and profitability.

This is the first in a series of four articles drawn from the white paper by Capgemini and Salesforce.com, “Cloud-Enabled Transformation in Insurance: Accelerating the Ability to Deliver Exceptional Customer Experiences.” For the full white paper, click here.