The evolution of technology has created ecosystems beyond insurance which has allowed insurers to tap into customer needs to develop services which address their requirements.
With over 20 years experience in strategy and digital innovation, Roger Peverelli – co-founder of Digital Insurance Agenda (DIA) – is well placed to discuss these ecosystems and the impacts they are likely to have on the future of insurance. For the latest issue of our Driven magazine, we spoke to Roger to get his take on the future of insurance.
Why do you believe that ‘ecosystems beyond insurance’ is the overarching trend for years to come?
Roger Peverelli: “When people wake up in the morning, their first thought is not usually their car insurance. They think about how to get to work, how to drop off their kids at school… the real customer need is mobility. More and more insurers are realising that the most effective way to reach customers is to be part of relevant platforms and ecosystems.
‘Ecosystems beyond insurance’ is about being present and active in the platforms where people go to solve the real challenges they have in life. Not only platforms around home, mobility, work and health but also, around important life events such as study, marriage, divorce and retirement – moments that include making important financial and risk decisions.”
Why is thinking about mobility in the wider sense so important for motor insurers?
RP: “The Future of Motor Insurance is set by the Future of Mobility. Solving the real needs behind the insurance need usually requires more than insurance. Ecosystem thinking is about ‘services beyond covers’. New value-added services increase the relevancy of a brand to customers – opening up new revenue streams and business models.”
What do you see as most important for insurers to focus on: customer engagement, understanding driver behaviour or preparing for new technologies?
RP: “There is no choice – they need to prepare for an era with autonomous vehicles however it will probably take a few years before the majority of cars on the road are self-driving. Insurers will need to continue improving and innovating their offering to their customers – with many new and relevant services. There is ample research which shows that safety features and services are increasingly important to drivers and car owners.”
What’s the state of play of insurers embracing insurtechs in their ecosystems?
RP: “When we meet with insurance executives to discuss ‘the state of innovation’, quite a few say they worry. They are all on the same page with regards to how important insurtechs are for accelerating digital transformation and innovation but they are humble when we discuss the scale on which these new solutions are being used inside their organisation but also with regards to visibility in the market. In spite of all the investment, pilots and proof of concepts with insurtechs; they say the impact on the top line and bottom line is still limited, this is an issue that we really need to tackle.”
The opportunity offered by insurtechs and being adopted by insurers, pre-supposes that customers want a relationship with their insurer. Do you sense a change in these relationships due to digital technology?
RP: “Ample research shows many consumers are not at all interested in a relationship with their insurer. The benefits of such relationships are not clear and the truth is many financial institutions have not even started thinking about it themselves or what kind of relationship they strive for.
In our latest book, ‘Reinventing Customer Engagement’ we’ve revealed five key ingredients for the relationship between companies and customers:
- Value for both – The relationship should be mutually beneficial. It is only effective if it anticipates the true needs of customers whilst simultaneously creating value for the business
- Information exchange – Value can only be created if both parties are willing to share information and knowledge. The more knowledge shared, the more value a company is able to create for its customers and the more meaningful the relationship can become
- Influence and alignment – The insurer really has to listen to its customers and it is even more important to act on what it hears and learns
- Continuous dialogue – An open two-way conversation is indispensable. This should not only be focused on specific customer feedback but also, on getting to know more about customers
- Trust and respect – Willingness to have a continuous dialogue and exchange information and knowledge will only arise where there is mutual trust and respect
Nurturing these five ingredients is a continuous process. It is about closing the gap between insurer and customer, moving from transaction to interaction, from one-way communication to dialogue and turning this information into actions. We also see new digital technologies allowing insurers to significantly improve on all five ingredients, if applied correctly.”
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