The digital insurer

Like so many traditional industries, insurance has been turned on its head by the information revolution, writes Nick Pike, Vice-President of UK and Ireland at OutSystems. But this could be a golden opportunity

Companies with long histories now compete with agile and technologically advanced disruptors, not to mention big-name brands trading on their customer service heritage to grab a slice of the lucrative insurance pie. Fortunately, by shifting to a rapid innovation and development culture, traditional insurers can thrive in the digital era.

The road to revolution

In the wake of the internet, customers had easy access to information about all kinds of policies and prices for the first time. Comparing and switching insurers became much easier, and the result was a dramatic drop in customer loyalty. Traditional insurers were at the mercy of new, fast-moving companies who could develop and launch products quickly, gobbling up market share. Small wonder then that a recent PWC survey found that 86 per cent of insurers feel their revenues are at risk from innovative insurtech companies.   This pressure has provoked a response. Analyst SMA Research says that 61 per cent of large insurers currently describe themselves as being in a ‘transformative’ phase, having to rethink their business.

‘Alexa, I’ve crashed my car’ – Generation Y consumers come of age

The first generation of digital natives is all grown up and making major purchases. Naturally, they need insurance – and they expect it to be super easy to get what they want. They value great experiences so highly that they’re willing to buy from any company that offers it, and the fact that the company has no history in the insurance market is irrelevant. GlobalData’s 2017 insurance survey found that 18 per cent of consumers would buy motor or home insurance from Amazon, for example, because they trust the company.   Today’s buyers expect personal touches that reinforce their relationships with insurance. According to a 2016 Capgemini survey, only 34 per cent of customers in the Generation Y bracket were satisfied with their insurers, compared to 47 per cent for all customers.  In return for this personalisation, younger customers share far greater levels of information about their individual circumstances. The benefit? Insurers assess risk better with more information, while tailoring policies more accurately. PWC has termed this a shift from ‘reactive claims payers’ to ‘proactive risk managers’. These risk managers use big data and technology to move the debate away from price and into the realm of adding value. Adding value in the ‘moments that matter’ The opportunity to add value is most critical in the ‘moments that matter’ – or, in other words, when something bad has happened and it’s time to make a claim.  Take a car accident, for example. Here’s a chance to demonstrate outstanding customer care by reporting the accident instantly and starting the claim process. Some apps on the market enable customers to take photos of the scene to add to the claim data and show exactly where they are. Medical and vehicle recovery services can then use these to send reassuring information to the device, such as when help will arrive, providing comfort when it’s most needed. Having a car accident is obviously never going to be a great experience, but insurers can make sure that the aftermath and claims process is fit for the 21st Century by making use of available technology. This kind of service turns a mere insurance provider into a company customers trust.

The need for speed

So how do traditional insurers go about transforming themselves into organisations providing amazing customer care with the agility of Amazon and the innovative power of their insurtech competitors? They start by addressing the biggest challenge: speed. Instead of having years to develop, test and launch new products and services, the window of opportunity is now just weeks. New ideas will often come from all parts of the business, but it generally comes down to the IT department to deliver them, often with seemingly unrealistic timelines.  This is where a low-code development platform proves its worth. Using a low code platform, organisations can build enterprise apps in a very short space of time, quickly solving problems and seizing the opportunity.  A great example of a low code platform in action is global insurer, AXA. AXA was at risk of losing business because independent brokers were frustrated with having to phone a call centre to track the progress of customer claims. What it needed was a portal that could deliver the information to brokers’ devices immediately, and it needed it fast. The company used a low-code platform to create and launch its eServe portal in just 12 weeks, integrating it with its legacy systems to serve more than 3,000 brokers and handle 260,000 claims per year.

Wrangling out of legacy

Traditional insurers are often wrangling with legacy technology that simply isn’t a problem for their newer competitors. What they should do is again look at a low code platform to help them integrate multiple systems into one interface for rapid application development. Once the burden of legacy system integration is lifted, it paves the way to a culture of rapid and responsive development, and the entire organisation benefits. Why? Because automation speeds up claims processes, which makes things easier for broker partners and inspires dynamic sales and marketing campaigns. There’s no doubt that the insurance sector is in a state of flux. Digital transformation is a golden opportunity to deliver that holy grail of outstanding customer experience. It will help insurers ride the maelstrom of disruption and thrive in the digital era.