In my previous blog I began to look at what the future might hold for Irish insurers. I suggested many insurers would need to take account of new ground rules – and even a few seismic shifts – when designing their innovation agendas. One of those shifts concerns the changing role of brands, and how insurers leverage those moving forwards.

Brands will become less important. Historically, you took out an insurance policy based on a brand. That created a level of trust. Now, as we move towards a service-based approach, the strong brands out there in the market today will become less relevant. Once consumers start to get their insurance quotes through Alexa, for example, there will be much less traction on any individual brand.

That’s probably looking three to five years out. During that time, there’s an opportunity for established insurers to work their brands and look at selling other products from them. In the context of being disruptive, insurers could use their brands to sell other financial services products, or bundle up relevant products to target a particular moment of truth. Think about customers taking out a mortgage: the bank typically seeks to provide insurance at the same time. Flip that round, and it’s easy to imagine insurers offering loans on cars along with insurance. The key opportunity is to drive increased (positive) interactions with customers.

I think insurers could adopt a two-speed approach over the next three to five years. One is to acknowledge the need to seize the initiative by innovating and disrupting, instead of waiting for disruption to happen to them. The other is to acknowledge change and adapt to it (in the same way UK insurers did around the aggregator market). Some insurers may decide the best course is to become insurance product manufacturers, not innovators. As brands become less relevant, they’ll focus on building out their manufacturing capabilities and selling their products into the market through an affinity partner.

Going down that route wouldn’t require a big switch. Many of them have already set up affinity deals where they provide pre-packaged products. But they’ll need to acknowledge the fact that, from a cost perspective, they have to restructure their business because profitability-wise they’ll be in a very different space. Their business lines won’t be as profitable anymore.

Moving beyond the issue of brands, there are two other key areas to consider: the insurance products themselves, and the customer experience that goes with them. Both of these areas will evolve over the next three to five years, and I’ll be taking a look at this in my next blog.

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