Other parts of this series:
What if insurers viewed each opportunity as if it were an individual market – a momentary market?
In this series, I’ve explored how some of the technology trends highlighted in Accenture’s Technology Vision for Insurance 2019 will transform the very nature of insurance in coming years.
In my experience, technology is creating a wealth of intensely customized and on-demand experiences, and companies must reinvent their organizations to find and capture those opportunities as they come along.
Businesses are shifting towards their next big opportunity, made possible by connected companies, workforces and consumers: capturing moments. Trend 5 in our Technology Vision is called MyMarkets, and focuses on how insurers can anticipate and meet consumers’ and organizations’ needs as they arise.
What’s driving the world of moments?
First, let’s look at what’s powering this world built on moments: the Internet of Things (IoT) and the 5G network.
Research shows that by 2020, there will be 31 billion connected devices in the world, and that number is set to double to 75 billion by 2025. For the astute insurer, each device is a new channel, a new source of data, and a new way to identify and reach a momentary market.
Furthermore, 81 percent of insurance executives agree that 5G will revolutionize their industry by offering new ways to provide products and services—for example: drone delivery, driverless vehicles, faster video transmission, etc. The speed, reach, and decreased latency of 5G will provide the basis for a truly intelligent network of cars, robots, drones, and more—all of which will be able to communicate and react in real time, wherever people need them.
With 5G making pervasive, real-time intelligence a possibility everywhere, companies will finally have the technological capabilities to spot moments of opportunity before they come—and capture them before they go.
How to recognize and capture the moment
With all of these technologies, insurance companies have direct digital access to customers. Combined with increasingly powerful analytics capabilities, insurers can understand their current and potential markets better than ever before. And with agile back-end technology that can reorient the business quickly, they can deliver for those momentary markets faster than ever before.
The insurers that are ready to capture the moments when they come, to remain continuously relevant in the lives of their customers, partners or employees, will realize new opportunities like never before. However, those that fail to capture moments will struggle to compete. According to Accenture’s Living Business Research, 76 percent of customers believe it is easier than ever to simply take their business elsewhere.
Insurers geared to meet needs instantly
Yolo is a great example of an insurer that delivers on-demand products. The Italian startup has created a platform and app that allow people to buy instant and pay-per-use insurance products—for travel, sports and devices, among other things—on a daily or monthly basis.
Another innovative insurer, Trōv, allows customers to buy insurance for specific items (for example a laptop, camera or mobile device) for tailored lengths of time. Coverage is activated and deactivated with a swipe of an app.
90% of insurance executives agree that the integration of customization and real-time delivery is the next big wave of competitive advantage.
These companies show just how important it is to integrate customization and real-time delivery in your insurance value proposition. The fact that it’s a competitive advantage for insurance is further highlighted by the success of businesses such as Farmers’ Toggle brand; Cuvva, which offers by-the-hour auto cover; Verifly, with an on-the-fly drone liability product; and Legal & General’s on-demand, pay-per-use home-share insurance.
To anticipate moments of opportunity, insurers must move beyond mere data gathering and turn to AI to improve the granularity of their forecasting. Insurers already have information about insured lives and assets, historical risks, and even the weather. But they need the computing power of machines to identify and capture these moments.
Metromile, for example, used machine learning to identify claims fraud more rapidly. The US-based pioneer of pay-per-mile auto insurance had its data science team crash cars at roughly five miles per hour to recreate a variety of slow-speed events like fender benders and hit-and-run collisions.
In another example, AXA XL plans to use IoT sensors and a data platform to gain insight into how sensitive marine cargo travels through the supply chain, tracking and analyzing data such as location, temperature, light, humidity and movement impact.
Insurers that wish to remain relevant and capture the moments of their customers, need to ask the following questions:
- How is our company moving closer to delivering on-demand experiences?
- What are we doing to uncover discrete moments of opportunity?
- How can our business prepare today to deliver for the momentary markets of tomorrow?
For more insight, take a look at the Accenture Technology Vision for Insurance 2019, or get in touch with me here.