Last year when I was in the process of buying a new house for my family, a home owners insurance company approached me and offered a good insurance policy. The policy was good in that it covered the home against the damages, theft and other usual risks. It was about the same price as others in the market.
However, the main selling point to me was that the insurance agency worked with the realtor and the title company. Thus, I did not have to run around multiple vendors and channels to figure it all out and link everything and everyone together. All of the process was seamless and a single payment took care of the housing loan, property taxes and homeowner insurance. What a great experience it was.
Over the period of the year, I started getting numerous correspondences from the insurance provider that I had to put the fence around my property, or they would cancel the policy. I revisited the terms and did not find this requirement in them. Also, most of the houses in my neighborhood do not have fences. I tried to talk this through with the insurance company, but to no avail. In the end, I had to cancel the insurance and switch to another provider that was a little more expensive, but listened to my needs.
The above scenario is representative of the Insurance industry, particularly Property and Casualty Insurance (P&C) I think. With over $2 trillion in annual premium revenues, the P&C industry has been a large part of the global economy over the years and also employs 1.6 million professionals. In my view this is a high performing industry that is now a commodity, and ready for reinvention.
Some of the most common issues include:
- Strategy governed by legacy systems
- Systems too old to provide a modern e-commerce experience
- Insurance buying is viewed as a tedious process by many buyers
- Insurance websites and portals are not updated frequently vs e-commerce sites
- Process can give the impression that the buyer should not be trusted
The issues above are experienced across the industry. A few players score better than others on some criteria, but lose on others. Overall, the customer often feels that they are not being heard or involved in the process and decisions made. The customer involvement is limited to the payment of premiums. At the same time, there is a growing mistrust among customers about data generally, and specifically in this market also – is their electronic insurance information safe, and especially so when using portals that feel outdated.
Of course, the Insurance industry is not unaware of this and is seeking to revamp technology in multiple ways. A lot of insurance providers, customers and technologists have expressed their views (and concerns) around the globe. Disruptions through technology and entrepreneurial spirit have started to make an impact.
As a first step to digital transformation, a strong case management system that can track the client information – records, correspondences, PII, claims and other information – is a start to catalyze reform and enable a legacy systems-governed industry to gear up towards digital reforms and more individual based responsive insurance policies.