Other parts of this series:
In my last blog post, I introduced our Technology Vision for Insurance 2017 and set out the 5 trends that underscore the importance for LP&I players of focusing on ‘Technology for People’ to achieve true digital success in the evolving landscape. Let’s dive straight in where we left off by going through the trends we expect to see.
Trend 1: AI is the new UI: Artificial intelligence (AI) is about to become an insurer’s digital ambassador to its customers, agents, employees and business partners. From an LP&I point of view this would lead to development of robo advisers and further integration with chat bots which would be available on the move 24*7.
Trend 2: Ecosystem Power Plays: Insurers are starting to integrate their core business functions with third parties and their platforms leveraging these relationships to build their role in new digital ecosystems. LP&I players need to Integrate into platform services for specific functions such as fetching health data for underwriting or collecting and analysing social media data when providing retirement options.
Trend 3: Workforce Marketplace: Digital leaders are beginning to reinvent their workforces. Driven by a surge of on-demand labour platforms and online work management solutions.
Trend 4: Design for Humans: The new frontier of digital insurance experiences is technology designed specifically for individual human behaviour rather than technology that humans should adapt to. This plays perfectly into the need for LP&I players to design specific interaction channels with millennials as outlined in Richard Pryors Blog.
Trend 5: The Uncharted: Insurers are not just creating new products and services; they’re shaping new digital industries. From technology standards to ethical norms, to government mandates. In an ecosystem-driven digital economy, one thing is clear: a wide scope of rules still needs to be defined.
FinTech & InsurTech fuel the fire
The rise of FinTechs is fuelling the technology innovation and the exponential change within the financial services sector. More importantly, with InsurTech rapidly accelerating, catching up with and in many areas now overtaking banking and capital markets in terms of both innovation and investments made by insurance carriers, the rate of change in insurance is set to be even more dramatic. According to CB Insights, in 2016 deals involving InsurTech startups climbed 42 percent to $1.7 billion across more than 170 transactions.
Interestingly, however, there were no startups targeting LP&I in our Accenture Fintech Accelerator programme in the last round. With the scale of opportunity in the LP&I space, we are expecting this to change next year and would welcome applications.
What does this mean for LP&I providers in the UK?
LP&I players need to leverage existing platforms as their means to enter new ecosystems. Not Policy or fund platforms but Communication platforms like WeChat and WhatsApp and even more importantly, AI intermediaries like Google Assistant, Alexa, and Siri. These represent distinct ecosystems delivering unprecedented access to customers and they offer a multitude of possibilities for LP&I players. Aviva in the UK has already launched ‘skills’ for Amazon’s Echo where Customers can ask the Alexa natural language questions about insurance and Alexa will respond. This could be expanded in the future to cover complex products, advice, valuations and transactions, etc. Aviva didn’t need to build these capabilities themselves, or acquire a technology company to build them, they simply leveraged Amazon’s platforms and ecosystem to enhance the insurance experience.
Add to this, analytics deployed to profile customers and offer truly tailored products through lifestyle information, health trackers, the connected home and banking open APIS and LP&I players will be able to offer a truly individual experience at a lower cost through lower workforce and distribution costs as well as a lower risk profile to the insurer themselves.
In a platform as a service world, providers are currently striving to differentiate their propositions based partially on product but mostly on service and ease of interaction both for Customers and Advisers. Through technology advancement and the help of InsurTechs, there is a real opportunity to leap from the current web enabled position directly to a more interactive, engaged and immersive offering that truly differentiates not only from the competition and new entrants but also those seen a market leaders in customer engagement. The question now is who will move first, grasp the opportunity and secure their position as the next game changer in the industry?
Thanks for reading and watch out for the LP&I Blockchain series coming soon!
In the meantime, here is some further reading on the future of insurance: