In a world where EVERYTHING (except insurance) can be purchased in two clicks or less, insurance will have to adapt to survive.John (JP) Petricelli, Head of Product at Fenris Digital
Here’s where we think 2020 will take us based on what we’re working on, what we’ve seen, and what we know will make an enormous impact on our clients and partners in the insurance and financial services sectors.
AI makes big strides in insurance data
You have heard about AI and machine learning, and likely a host of other related buzzwords. But in 2020 and beyond, we’ll start to really see things move across more of the mid-size and larger incumbents.
While AI is most frequently cited as an engine for customer support and chatbots, it is underrepresented where there’s big opportunity – on the new business and quoting side of the house. AI has massive capability to help the entire insurance ecosystem by helping carriers and agencies prioritize applications quickly and seamlessly, leading to more quotes and binds. In 2020 we’ll see AI become more of a table stakes offerings for insurtechs and the incumbents they serve.
For more excellent reading on the subject and its impact on the broader insurance industry, take a look at Duck Creek’s post on the subject.For a great summary and a few recommendations for insurers planning even further to 2030, McKinsey’s 2018 report still has lots of learnings for forward-thinking insurers. We’re partial to their #3 recommendation, so if you agree, let’s talk about it.
Competition against platform players will become real
For years we have known about the looming specter of Amazon Insurance or Google bank accounts (which is imminently launching), but it has often felt like a credible threat and not an imminent danger. We believe that will quickly change when the big tech firms exert their will further in their existing customers’ lives by making it as easy as one-click purchases to get access to coverage of feasibly any kind. Incumbent insurers and financial services firms will need to consider what would have to be true to compete and grow when they’re fighting for business not against their own ecosystem but from massive, diversified players with deep pockets.
Some early movers such as Travelers have started partnering with Amazon on what at first blush seems like a promotion for Alexa devices, but is really the first touch point in creating a seamless experience for those in the Amazon – Travelers venn diagram that could spark lots of word-of-mouth and online chatter. Incumbents must acquire the same long-tail mindset to be successful in a world where Big Tech is an actual rival being considered by your current and prospective customers.
Those who empower brokers and agents will reap big benefits
Brokers, agents, and advisors are the true gatekeepers of the end customer, and both insurers and insurtechs need to be focused on how to optimize their experience in order to generate positive network effects. This means using tools, data, and insights to do things like:
Streamline the applications coming across their desk
Prioritize applicants to direct agents to the most pressing work first
Eliminate unnecessary manual data entry
We believe that in 2020 the agent will be even more empowered to do their best strategic work by agencies and carriers that support and cater to them.
Data partners will become insight partners
Someone’s gotta say it – almost everyone has data now. Not every carrier or insurtech has the largest repository of data on insurance applications, but most have enough to be sufficiently dangerous and carry out proofs of concept. The real game-changer even among the most well-endowed data providers is to generate insights carriers, agents, or advisors wouldn’t have otherwise – and desperately need to create both competitive advantage and delightful customer experiences.
For that reason, carriers will be enlisting data partners that provide them not just with datasets, but with actionable insights that transcend transactions. Data partners will be insight partners that support carriers and agencies as they innovate past market disruptors and internal obstacles to digital transformation.
Time to get serious about the customer experience
Insurance will have to focus more on the consumer and the consumer experience, in a world where EVERYTHING (except insurance) can be purchased in two clicks or less, insurance will have to adapt to survive. Early adopters will gain in market share while resistors to change will lose.
That’s our 2020 Fenris Five. What are yours? Which trends and innovations do you think will shape the future of insurance and financial services in 2020 and beyond? Give us a shout with your ideas – we have plenty more where these came from.
Fenris eases the application process for insurance and financial service providers. Our suite of new and emerging data, predictive consumer scoring, and user-friendly software provides insight at the initial point of contact which increases conversion rates, decreases cost of acquisition, and reduces manual entry for a better customer journey.
Learn more about Fenris and how we help at fenrisd.com.