When was the last time you dealt with insurance? Maybe it was when you had to make a claim, take out a new policy, or make changes to your existing policy. Now ask yourself: was it a seamless process, with everything available at the click of a button? Or was it clunky, with paper forms, phone calls, and multiple exchanges with your advisor?
I’m guessing that many people reading this will choose the latter. This is because – despite amazing leaps in technology – the question remains:
What is holding back technological change in insurance?
Cyberpunk writer William Gibson famously said: “The future is already here. It’s just not evenly distributed.” This goes somewhere towards explaining why insurance has struggled to get off the ground technologically-speaking.
Trust in technology varies depending on the context of where it’s used. How comfortable do you feel posting personal pictures on social media, for example? Very? Now how comfortable would you feel knowing that your personal health data is being stored in the cloud? Less so? The latter case sparks more questions about security and data protection for most of us than the former. Regulatory bodies often feel the same way.
This has resulted in asymmetrical adoption of digital insurance products across the globe. Particularly for insurers with a global footprint, these differences in consumer demand pose a significant challenge as their tech setup must support various country-specific rules and regulations. Merging the need for flexibility with the growing complexity of insurance products has become the focal point of technological change in our sector.
What can we do to accelerate that change?
Let’s highlight three ways that insurers can embrace the benefit of technology now.
First, promoting technology is not a goal for its own sake, but an incredibly powerful means to simplify the insurance business. We believe that when we focus on how to make both our decisions and lives easier, technology will naturally step up with solutions.
For example, examine how life insurers assess risk when providing customers with a personal quote. This used to happen via paper questionnaires, but now many have switched to online assessments, which can provide immediate feedback to customers. No more time lag, no more handwriting your dangerous hobbies.
Online is attractive, and unsurprisingly, insurers are looking to further simplify the risk assessment experience by tapping into data already available in the universe. But big questions linger: Which data sources are they allowed to use? How much do you want to share with your insurance company?
This is where the second method can help: engaging in a conversation with both governmental bodies and larger society can pay off and additionally speed up the progress of technological change.
Third, collaborations with large technology companies can stimulate a “test and learn” mindset and embrace technological change in a meaningful way. For example, one P&C insurer has established a partnership to seamlessly offer alternatives to cash settlements of claims, including vouchers for retailers so that their clients can buy goods with selected partners.
The next frontier of engagement is the seamless integration of insurance products into our daily lives. Imagine that you were expecting your first child, then your health app automatically offered coverage so you can take care of your growing family. Insurance is usually not the first thing you think of during such exciting life events, but this is precisely how technology can step in where it matters and make the purchase a seamless, positive and natural experience.