The Top Two Digital Opportunities For Insurers

Digital technologies are changing the insurance landscape, creating opportunities for innovative players to grow their market share and even transform their business altogether.

At Chelsea Apps, we believe the top two digital opportunities for insurers today, are:

  • [in the short run] offering digital self-service through the entire policy lifecycle
  • [in the long run] transforming customer relationships and becoming a trusted advisor

These are described in further detail in the following sections.

In the short term, insurers should focus on offering digital self-service throughout the policy lifecycle.

Insurers currently lag behind other sectors such as banking and retail, when it comes to offering great digital customer experiences. Recent research by Altus Consulting shows that 87% of the 18 leading UK insurers have digital capabilities at the “quote and buy” stage of the policy lifecycle. However, there is a sharp drop in digital self-service capabilities further down the lifecycle:

  • 39% of UK insurers let customers make mid-term adjustments digitally
  • 19% let customers renew their policy online
  • 6% let customers file a claim digitally

Source: Altus (2017)

Insurers who can close that capability gap will benefit from cost efficiencies, stronger customer satisfaction, increased customer loyalty and profit gains. The financial ROI of churn reduction can be significant, knowing it typically costs five times more to attract a new customer than to keep an existing one.

But in fact, there is an even bigger prize for insurers who manage to successfully engage their customers with a fully digital lifecycle: DATA.

In the long run, insurers can use data to transform their customer relationships and move from ‘buy and forget’ to ‘trusted advisor’

The real long term opportunity for insurers is to transform the very nature of their customer relationships. And the key to achieving that is data.

Highly relevant and valuable data is generated by consumers’ mobile phones, wearables (e.g. Fitbit) and a whole host of new connected devices, introduced as the ‘Internet of Things’ market (connected homes, connected cars, etc…).

This represents a great opportunity if you can convince your customers to give you access to their private data in exchange for valuable new advisory services. Help them identify, assess and mitigate health, property and lifestyle risks as well as gain protection tailored to their individual needs.

But to do so, your customers must feel cared for individually, with true empathy. They need to trust that you will continue to keep things fresh by evolving your services. Customers should also be incentivised that when they change their behaviour and improve their risk profile, they will benefit from cheaper insurance premiums.

If you can’t convince them, there are suitors lining up around the block, who will sweep them off their feet. That’s a tough challenge as it’s hard to change arm-length relationships into closer relationships. It’s also hard to act nimbly when, at this age, you’re anything but.

Why use a technology partner?

Working with a technology partner can be beneficial for a number of reasons:

  • lets you focus on what you do best
  • reduces technology risk
  • it’s often cheaper and faster than doing it yourself

IT outsourcing is already common practice in the insurance industry. Here are a couple of examples:

  • RSA Insurance Group plc., the British multinational general insurance company: extended its outsourcing agreement with Accenture in February 2016 in a six-year deal. Accenture will provide IT-enabled services in the back office, for customer services, claims processing, policy management
  • Direct Line Group, the insurance company which separated from the Royal Bank of Scotland in 2012: awarded Capgemini a five-year deal in 2013 to build and manage its new IT infrastructure

However, traditional outsourcing deals like the ones above typically focus on generating cost savings and do not help you stay ahead of the curve. They do not even address new market opportunities.

What can we do for you?

At Chelsea Apps, we specialise in defining, testing and building innovative propositions. Here is why we do it better than an Accenture or a Capgemini:

  • we are more agile: we work faster and more efficiently, testing our prototypes quickly to learn fast and adapt
  • we are more innovative: we bring you best-in-class user-centric design and strategic thinking
  • we are smaller but we can scale thanks to our network of partners

So far in 2017, we’ve completed two projects in the insurance technology space:

  • car telematics mobile app: design and build of a customer-facing mobile app that uses car telematics data to continuously advise drivers and reward better driving behaviour with cheaper premiums!
  • claims handling web app: design of a customer-facing web app that streamlines the claims filing process, including evidence submission, claims certification and fraud detection algorithm

We’re planning to do more work in the insurance industry. The opportunities are truly exciting and we believe we can support insurers on their mobile transformation journey.

Sounds interesting? If you would like to meet our team, why not drop into our Bournemouth office for a cup of tea? We love to kick around new ideas, and we can show you how we’ve helped previous clients solve their digital challenges.