Carriers are fast realizing that living services, that constantly meet the needs and preferences of customers, will be critical to their future success.

Digital disruptors such as Uber and Airbnb have leap-frogged conventional business models and value chains.  They’ve built highly effective platform businesses that are exceptionally nimble and hugely popular with consumers. Key to the rapid growth of these businesses is their ability to deliver “living services” that constantly meet the needs and preferences of customers. Such close contact strengthens customer loyalty, creates new business opportunities and drives revenue growth.

“Living services” is a term that we have coined. It describes services that respond to two of the most disruptive forces confronting insurers today – the digitization of everything and consumers’ increasingly “liquid” expectations – by wrapping themselves around customers, constantly learning more about their needs, intents and preferences. The benefit they strive for is to flex and adapt to make themselves more relevant, engaging and useful.

A defining characteristic of living services is that they are designed around the context and needs of individuals, while generic services are defined by an insurer for mass consumption. Customer service design allows carriers to rethink their products and processes with their customers and agents in mind, and in this way become more engaging throughout the life cycle.

Insurers, and companies from many other industries, are fast realizing that living services will be critical to their future success. Unless they can form intimate “living” relationships with their customers and provide digital services that are constantly relevant, they’re likely to be shunned by consumers.

Carriers such as Generali, Discovery, John Hancock and Ping An, as well insurtech firms Oscar Health and Trōv, have been quick to roll out living insurance services that monitor and adapt to the needs of their customers. They’re gathering vast amounts of real-time customer data, using a variety of sensors and monitors, and applying powerful analytics systems to deliver highly personalized services. Demand for such services, especially in health and auto insurance, is climbing fast.

Around 76 percent of the more than 32 000 insurance customers we recently surveyed around the world were interested in health monitoring services, 64 percent were keen to receive real-time accident alerts while driving in hazardous areas and 46 percent believed it was important to receive personalized advice on how they could improve their driving.

To become effective platform businesses, able to provide the living services consumers crave, insurers need two vital building blocks:

  • An open standards digital platform with closely integrated architecture, governance, and technology. This will enable the rapid development and roll-out of new services and the easy sharing of data with customers and business partners.
  • Access to a digital ecosystem that allows companies to collaborate with a wide range of business partners to provide consumers with a host of complementary living services and experiences.

Most insurers recognize the necessity to become platform businesses. An overwhelming 94 percent of the insurance executives we canvassed for our global Technology Vision survey agreed that adopting a platform-based business model and engaging in ecosystems with digital partners was critical to their businesses. More than two thirds of respondents confirmed that their choice of partners and ecosystems would be essential to their competitive advantage.The big challenge facing many insurers, however, is shifting from their traditional business models and value chains to become new platform businesses. In my next blog post, I’ll discuss how carriers can make this transition. Until then, I think you’ll find these links useful.

Living Services: The next wave in the digitization of everything.

Technology Vision for Insurance 2017: Technology for people.

The Voice of the Consumer: Identifying disruptive opportunities in insurance distribution.

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