Insurers are facing an insurance innovation process based on digitalisation, but also on a series of fundamental axes that show a change in the customer consumption model. These critical forces will drive the biggest transformational investments, new trends in the industry, the most innovative insurance and the most ambitious new business models.
Innovation in insurance is transforming the industry
Insurance innovation is a reality in the industry, and aims to adapt to the latest trends in today’s consumer model. This change arose as a result of new technologies, has taken hold with the coronavirus and represents a great business opportunity for those companies capable of offering innovative insurance based on immediacy, personalisation and the adoption of values such as sustainability, social responsibility and transparency.
Obviously, protecting people against risks continues to be the insurance industry’s main interest, but the digitalisation of insurance has favoured the entry of new players into the business, which could lead to a loss of up to 4 billion in revenue for traditional insurers that do not know how to adapt to it.
The key: finding the perfect partner
The other option to renew and not die is to establish strategic alliances for insurance innovation with insurtechs, which are agile, fast, flexible and capable of adapting to changes, but need the infrastructure, experience and resources of historically established players. In this regard, we have already mentioned some of the insurtechs that you should keep an eye on. In our particular case, World Funeral Net has signed collaboration agreements with insurers seeking to offer the best quality funeral home service or transfer at the best price, in a fast and transparent way and wherever it is, bidding through our digital platform.
Evolving and/or finding the perfect technological partner are the two essential ways to survive the radical changes that are already reshaping the market and forever changing the way we understand insurance. Business opportunities are out there for those companies able to understand the trends in the industry and offer innovative insurance.
Insurance innovation ideas
At World Funeral News, we believe there are five trends that are already shaping insurance innovation and will drive major changes in the industry over the next ten years. Some of these are driven by rapid technological advances, but many others are driven by a shift in consumer mindsets towards companies that are able to move forward, transform and deliver long-term values.
Security and control
Customers want to feel that their policy keeps them safe and protected at all times, but they also want to feel that they have full control over the products they have contracted. This trend of insurance innovation is realised through apps or platforms, which allow you to access your insurance portfolio at the click of a button.
It is also necessary to reinforce the feeling that they are making a good investment, or as it is known in sales, the reaffirmation of the purchase decision. All this is achieved if, in addition to covering incidents, customers can see the long-term objectives they will obtain with their policy (greater savings, health, profitability…) as well as the discount, loyalty or reward programmes for meeting certain objectives (no fines, more physical exercise…).
Digitalisation and ecosystems
The digitalisation of the insurance industry, technological advances, Artificial Intelligence, the Internet of Things, application programming interfaces (APIs), microservices and data structures… all of this makes it possible to automate workflows or claims processing thanks to machine learning; it is possible to implement improvements in telematics and risk management; traceability and accessibility is greater, which reduces risks and increases profits.
In addition, new technologies are the key to enabling insurers from different lines of business to share information in near real-time and to create their own networks of partners and allies, all in a kind of industry ecosystem where specific strengths and insurance innovation are enhanced.
Values and corporate responsibility
Increasingly, companies have developed a culture based on values such as social awareness, environmental commitment, reducing carbon footprint or meeting sustainable development goals.
Such long-term values are almost as important as financial profitability and are a focus of attraction for customers, financial partners, shareholders, the media and anyone who wants to contribute to the same charitable purpose.
Following the impact of covid, experts predict that the industry will become more concentrated in the coming years due to the close relationship between insurance and banking.
However, just as supply is expected to become increasingly concentrated in large multi-branch insurance groups, another phenomenon is taking place in parallel: the proliferation of highly specialised companies. Both trends will shape the future of the industry and will be key to the process of insurance innovation.
Personal and ‘as a service’
Insurance has become an ‘as a service’ commodity. As a result, customers demand simple and transparent products and rely on companies that are able to find personalised options. More and more, consumers perceive value through rich experiences and relationships based on trust. That is why flexibility and personalisation are imperative.
Insurers can use technology to combine simpler components into customised solutions, provided they have the necessary digital and analytical capabilities.