Markets mature and consumers become more demanding, new and existing distributors face renewed pressure to disrupt the insuretech space. This is at a time when the industry faces heightened regulatory and compliance hurdles, besides strong headwinds in the form of inflation and economic uncertainty, geopolitical conflicts, and cybersecurity threats.
Part of the challenge lies in how new-age insuretech businesses structure themselves to align with evolving customer preferences. These include demands for digital-first experiences, a strong focus on sustainability, faster claims processing, and high expectations in terms of overall trustworthiness.
The 2022 Insuretech 100 report from Sonr - a listing of the 100 best insuretech offerings in great detail. Although the fundamental demand for insuretech products and services remains strong, there is increasing customer demand for greater value and richer experiences. Digital convenience without compromising data security has been driving the consumer agenda.
As a result, insurance distribution companies with sophisticated solutions that run application programming interfaces (APIs), ‘headless tech’, and hybrid cloud architectures are promising early leads in the insuretech race. Curiously, a lot of new insuretech businesses are turning back to more traditional business models at the same time.
These contrasting trends represent a tussle between conservative and disruptive forces that are uniquely inherent to the insuretech sector. With that in mind, here are three areas that Delegated Underwriting Authority Enterprises (DUAEs) like MGAs, MGUs, Program Managers and Lloyds Coverholders must prioritize now.
(One) Embedded Customer Experiences
This is in keeping with the general insuretech thrust on providing a memorable customer experience (CX).
Traditional embedded experiences are customer-centered partnerships that link two or more services into a combined offering. Think of same-page checkouts and seamless payment gateways on an ecommerce platform.
Embedded customer experience in an insuretech context, though, is slightly more sophisticated. It’s not enough for an insuretech company to tie up with a convenience store chain or a homewares brand, for instance, to try and sell more policies.
Insuretech customers expect seamless journeys well beyond the checkout process and especially in the post-purchase process. Unfortunately, horror stories of claims being denied, delayed, or only partially honored still abound in the insurance ecosystem.
The claims process is what customers judge insurance providers by, and the next level of embedded experiences in insuretech is hyperfocused on meeting and exceeding customer experiences in this regard.
Artificial intelligence (AI) and machine learning (ML) are certainly not new to the insuretech domain. The advent of generative AI like ChatGPT, however, shakes things up considerably.
Apart from changing the role of the traditional insurance agent, automation and robotics have revolutionized insuretech processes like distribution, data collection, and data analysis.
Connected devices linked over the Internet of Things (IoT) are helping gather accident damage information from automobile accidents and activity metrics from health insurance customers.
And all that was before ChatGPT arrived on the scene.
DUAEs now need to focus on leveraging the latest generation of AI to install and execute fraud detection measures, provide real-time automation of diverse insuretech processes, improve response times, and offer significantly better standards of customer service and support.
(Three) The ‘Phygital’ Frontier
Businesses across industries are paying close attention to the ‘phygital’ (physical+digital) synergies unleashed by the metaverse.
It might look too far-fetched for some, but the blurring of lines between the physical and virtual in the metaverse are opening up new doors for businesses to engage with potential customers, sell products and services, and increase revenues.
Insuretech companies are perfectly positioned to make the most of this new frontier.
Some insuretech operators have already begun using augmented reality (AR) and virtual reality (VR) technologies to train and upskill their workforce in simulated environments.
The metaverse also has a wide array of commercial applications that insuretech companies can use to provide immersive education on benefits and internal engagement on risk mitigation.
Finally, the metaverse offers a host of new coverage areas in the form of digital assets like virtual real estate, NFTs, and avatars that are too lucrative for anyone to pass up.
The Road Ahead
For Digital MGAs and other DUAEs, technological innovation remains key to driving insuretech success. The greatest rewards in the field are for those who prioritize research and development, explore untapped potentials, and do not let up on the fundamental commitments of the insurance industry.