The insurance industry has a feature that is probably unique: it has been selling the same product since its origins centuries ago. This could lead to the conclusion that it is a sector that does not advance or transform. However, it is quite the opposite, there are many things that are changing in the insurance industry worldwide and in the region.
In this article we intend to explore how the digital age presents multiple opportunities (and not a few challenges) to insurance companies. Obviously in each country there may be particularities, but we will focus on those that in our opinion are most relevant and widespread in the region.
The impact of the digital age on business
Insurance companies have always sought to get closer to their agents or brokers as a way to ensure their loyalty or preference over other companies; as well as its end customers as a way of being less dependent on the former. This has not been easy for them throughout history, for many reasons that we will surely analyze on another occasion. But, thanks to new digital resources, for the first time companies have at their fingertips attractive and beneficial means to achieve this. Thus generating possibilities of access, personalization and contact, at reasonable costs, like never before.
To this we have to add the change in the mentality, habits and behavior of customers. As a result of all this, insurers are also finding in the digital channel a means to streamline their tasks, be more efficient and ultimately more profitable.
Here are 4 key changes of the digital age that we believe are transforming insurance companies.
#1. Social: a new paradigm for purchasing insurance.
Many times the concept of social is related to the simple fact of "being in social networks", without taking into account the importance and scope of the social phenomenon from the point of view of changing people's behaviors and habits.
At this point it is key to understand that people increasingly value the opinion of others, what they recommend, the good and the bad, they inform themselves, they want to know details and above all they trust what others say, without knowing who they are. are. This is a relevant behavior change to evaluate and discuss the sale of insurance in the (very) near future.
On the off chance that organizations don't attempt to comprehend the difficulties of protection the board from here on out, they will be sentencing themselves to see how others fill in their market with new clients that work under new mental plans. Today the significance of the client "experience" all through the protection esteem chain is basic.
This is a message for organizations, yet in addition for conventional protection specialists. An illustration of another industry that could be acclimatized is the advancement of the matter of travel services versus travel deals entrances. We should think briefly about the worth added by travel services not such countless a long time back, and contrast it and what we think customary protection circulation chains add today. We are not saying that specialists will vanish, yet we will unquestionably see less specialists later on, more particular and considerably more expert, existing together with the immediate offer of protection in light of trust and suggestions from interpersonal organizations.
The change is taking place with the change in people's habits, not necessarily because companies want to change the way they operate. The sale and the experience offered in general will have to be adapted to the way customers want to buy and be served.
And this arises from a clear demographic phenomenon (unrelated to insurance): the new young clients entering the labor market are already fully integrated into the digital age. They are people used to researching, finding out about prices, conditions and terms through digital sources, and then deciding whether to buy, and through which channel. The global insurance industry is only just realizing that it is losing customers every day by not offering digital direct sales and service methods. If we look at other industries, Amazon is an example and model, all products, different providers where multiple forms of payment and guaranteed delivery coexist. Following it, insurance “marketplaces” have already emerged in the world with great success, such as Insurify.com or the closest Comparaencasa.com. On these sites, one can do the same as on Amazon, but to buy insurance.
#2. Mobile: an ideal channel for after-sales service, in addition to generating improvements in the service offer.
Here we can observe another relevant change in the entire process of the insurance value chain. And not necessarily in the obvious that is the possibility of taking out insurance from a mobile device. Especially for the process of information and management of claims of accidents. Having an accident, reporting the location and accident to the company, taking photos and sending them, sharing the contact information of the other injured people, requesting a courtesy car or directly leaving the accident site (prior approval at the time of the company), etc., are already common currency in many countries.
The success of these new services in full expansion is strongly conditioned by the aspect of usability. Providing an excellent experience in all digital media (and in this case with an emphasis on mobile) is a fertile area for a company to compete for customer preference with its competitors.
#3. Pricing: the return of tailored policies
Linked to the previous point, another phenomenon arises that is called the “Internet of Things” (IoT – Internet of Things). This implies using the digital trail that people leave to obtain a better price for their insurance policies.
An application of this new concept is the "pay for use": if the conditions are accepted, for example, sharing the GPS information of the cell phone with the insurance company, it will be able to evaluate the way in which the car is used every day. , the routes that are chosen, the hours in which it is driven, speed, etc. This, in addition to serving to evaluate the way of driving and even improve it with advice, training, or other services, can generate two additional advantages for the client. On the one hand, having a personalized price for your particular risk and not an "average" price based on age or the type of car you have. And the second, the possibility of "paying for use", that is, if the car is used a little, it pays less than another person who uses it more time.
What is analytics?: It is the intensive use of large volumes of data to analyze behaviors, realities, facts, etc. and generate predictive knowledge in order to answer the intelligent questions that exist in the company, promoting action and aligned behaviors.
Obviously, everything we talked about above is based on Analytics: big volumes of data, handled quickly in an intelligent way.
But we can extend the concept with the following: how much better can a company's distribution network and customer base be managed if good quality data were first available? And after having them, use them to generate personalized offers at times when there is a greater probability of accepting the offer and taking out insurance.
For example: a young person who has just had their first child is surely an ideal candidate to buy life insurance, just as a person with several children who are starting school age is a target for enrollment insurance, and a tourist is target for travel insurance. All this is very logical and reasonable, but why are fortunes still being spent on generic campaigns that do not have much effect on insurance production? Basically for two reasons, one because the data is not always available or it is tortuous to dispose of it in a timely manner and with little effort, and the second because if it is available, it is not always known how to manage and analyze it to detect business opportunities.
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