Other parts of this series:
Compelling case studies for digital innovation in insurance
How can insurance leaders create strategies for the post-digital era – a time when digital, like electricity, has become pervasive and no longer a differentiator in itself? How can they discern which emerging technology to invest in, and how to apply it? The latest Accenture Technology Vision for Insurance report provides several examples of insurance companies that are leading the post-digital shift.
Mitigating risk with wearable devices
This openness is possibly rooted in what consumers can receive in return for their personal data. For example, the North American life insurance company, John Hancock, offers premium discounts and other rewards to customers who use wearable devices to track their fitness and health data. They are rewarded for hitting exercise targets and making healthy food purchases, and can use the carrier’s app to earn gift cards. As a result, policyholders on the program engage with John Hancock nearly 600 times per year, a startling figure given that the average customer with a traditional insurance plan engages with their life insurance provider only once or twice per year. John Hancock also claims that the customers on its Vitality program generate 30 percent lower hospitalization costs than the rest of the insured population. In addition to building customer loyalty, wearables provide a wealth of real-time data which enables the carrier to assess risks and price products more individually.
Life insurance policyholders on John Hancock’s Vitality program engage with the insurer nearly 600 times per year.
Revisiting insurance strategy for a new generation of customers
Insurers are beginning to adapt for a new breed of customer. Hyper-personalization is a key trend in the post-digital era, which US company Farmers Insurance has taken into account. Its new brand, Toggle, offers customizable renters’ insurance subscriptions which allow customers to toggle different elements of their coverage up, down or even off at any time. This is an example of how personalization needs to be considered and executed at a strategic level.
Insurance solutions for the gig-economy
Technology has made it easier to access previously inaccessible markets. Fifty-six percent of insurance executives affirmed that they are using direct, digital channels to address market segments that are difficult to access cost-effectively, and 36 percent of those surveyed said they plan to do the same within the next year. This breed of thinking has allowed insurers to reach the ‘gig economy,’ made up of temporary and short-term workers.
In Italy, ArgoGlobal Assicurazioni has partnered with gig work platform Jobby and insurtech start-up Axieme to offer on-demand, pay-as-you-go insurance for temporary and short-term workers. This includes cover for liability, illness and injury for the duration of the gig, which can be extended at the click of a button.
Auto-insurance tailored to time spent behind the wheel
Auto-insurance is undergoing a major shift. Sixty-nine percent of the insurance leaders we spoke to said that they are developing new insurance products to address new personal or commercial protection needs to offset the decline in traditional auto premiums due to improved telematics and safety.
An interesting example of this is, US insurer Nationwide, which has launched the SmartMiles program, that allows those who work from home, carpool frequently or use public transport to pay only for the miles they drive. This is executed using a small SmartMiles device that tracks the miles driven by the vehicle.
As illustrated in these case studies, insurance leaders have discovered that the post-digital environment is perfect for hyper-personalization and on-demand digital services. In my next piece in this series, I will delve deeper into how to interpret the latest digital trends for insurers.