In many ways, the digital revolution happening in the world of insurance mirrors the banking revolution in the late 1990s, when I worked as part of the online banking team for a large bank. Back then, it was new and unusual for the consumer to pay someone digitally, review balances, and communicate with the company through email and online messaging. Instead, we would resort to using our landline telephone to call or squeeze a visit to the local bank in our schedules to get those things done. Today, using online banking to accomplish these same services – and much more – is as natural as brushing your teeth in the morning.
While financial institutions have been at the forefront of advancing technology integration, the same process within the insurance ecosystem has been much slower. Following up the mid-2000s boom of smartphone apps, today it has become a simple assumption that there is 'an app for that in almost any industry segment. However, when it comes to international travel and health insurance, the process of choosing and buying a policy, its response methods, drawn-out processes, limited digitalisation of features and benefits are often perceived by the consumer as a step back in time.
Getting up to speed with insurance customer demands
In 2021, we see an insurance industry still pairing a fine-print policy with a fax machine to customers who use their devices as their trusted personal assistants. According to Allen Koski, President and Chief Innovation Officer of Insured Nomads: “The challenge is real as we bridge the chasm between the consumer/insured and the insurer/provider. The insurtech model is a natural market evolution that allows for speed and efficiency in accessing insurance products and services from any location – whether embedded or tailored to their entry into the environment. Since it is delivered to the customer, brokers, and businesses, through enhanced tools like artificial intelligence, geopositioning, application programming interface (API), instant messaging, and focused apps, digital engagement has become key.”
Valuable applications of technology for travellers
Embedded in this model, resources like geolocation become relevant risk mitigation tools for policyholders, allowing, for example, for smarter assistance and more efficient services when disaster strikes, or medical incidents occur. These resources may also optimise the offer of add ons and upgrades as the consumer’s geographical whereabouts change. In a world driven by data, wearable tech can provide location and behavioural information to help advance accurate claims processes – a welcome change for both the customer and the underwriter. Similarly, AI-enabled fraud control and cost containment are, more than ever, seen as valuable applications of technology by the insurers at the forefront of this movement.
Additionally, low code or no-code technology advancements bring the ability to introduce new features and integrations. Two examples of tech firms in the insurance space aiding carriers in digital transformation are Kasko (Europe and North America), led by Nick Sühr, and Covergo (Asia), headed by Tomas Holub. As Tomas recently noted: “Insurtechs can really help on the product innovation and distribution side, which helps insurers to get new business and customers to enjoy personalised products and services. In our case, we provide solutions to insurers to automate and digitise their products and processes as an enterprise software insurtech.”
An insurtech ecosystem
As this integration occurs, it is vital to maintain the focus on the benefits it brings, instead of on the technology itself. In Insured Nomads’ centre for re-engineering of design and delivery of benefits to the globally mobile, Juvo Innovation Lab, I often refer to focusing on technology as talking about the vehicle’s tyres rather than the car itself. The tyres are a crucial aspect of getting the vehicle to the destination, and are useless on their own. Technology is a vital part of the process, just as tyres are essential on a car. Yet, the combination of the engine, transmission, instrumentation, and fuel are what make the magic happen.
As part of this evolution, our clients have also shown us that they expect more from insurance than just financial protection when ill or injured. So, it is only logical to offer a non-insurance bundle of features that can continuously expand to meet other insured needs. Those can range from simple access to policy cards, information on visas, taxation, cultural norms, and safe accommodation, to geo-IP tracking for a boots-on-the-ground response, evacuation, telemedicine, and wellbeing resources – functioning both offline and when connected.
Borderless living means seamless insurance integration
The new workforce has been confronting the traditional insurance applications with their expectations of borderless living for a while, with limited success. That is until the world was turned upside down by the current pandemic, making things like prompt and seamless electronic reimbursement of claims, a reliable online purchasing process, efficient customer service, and prompt reimbursement and payment methods a standard element of the service industry. Connecting a policyholder with a means of reimbursement that is easy to access, relevant to their new location, and can occur without delays (compared to mailing a paper check to their previous home address) is a shift that all insurers are now expected to deploy.
I’m a firm believer that people make decisions on who they will engage with based on three factors: knowledge, admiration, and trust.
In the insurtech sector, it takes more effort to adapt systems to gain the fan base, confidence, and expert knowledge credibility for our consumers. As Nikolaus Suhr at Kasko has said quite well: “Insurance just works slightly differently than any other financial product. It’s about trust and appreciating how hard people had to work to gain that trust. This is why we see most insurtechs following a B2B2X or embedded insurance model as part of their offering, as they leverage the trust of an existing brand to offer contextually relevant insurance services. With a market poised to grow to US$3 trillion by 2030, there is enough to go around.”
While our clients research and make decisions no longer based solely on broker recommendation but on product performance and design, they often assume that access to benefits will be easy. As in every industry, there will be providers that meet the status quo alongside those advancing and leading with service delivery methods to exceed the demand. Let’s step up to provide more than a PDF (used initially in 1993), fax (used since 1955), and go past the smartphone app (2008) into the frontier of new processes for the improvement of care of the patient, the traveller, and the expat. As an industry invested in the wellbeing of our customers, it is time we operate a few steps ahead of our client base and make the investment in innovation a top priority.