Can technology drive Insurance product innovation ?
There are times when I would not want to be in my customer’s shoes. When it comes to innovation there is great pressure on all industries and insurance too. So what would be your guess, what would you expect of insurance product innovation ?
Well, probably on the top of your list would be things like:
- use of telematics: gather vehicle telematics for pay as you drive schemes
- use of wearables: gather fitness, health information for health and risk products
- IOT of home equipments: gather and control data that monitors household risks like fire, leakage, etc.
- social integration for content sharing, promotions, etc.
So, given the above use cases that on the one hand would be great from the insurance carriers’ perspective having clear economical advantages and on the other hand use the technologies you would expect from a forward looking company, how would you expect customers to accept these offerings ?
According to a recent study by FC Business Intelligence, when customers are asked what data they are most reluctant to share with their insurance company, the findings are the followings:
- social media profile: 65%
- purchasing behaviour: 63%
- location: 59%
- telematics: 47%
- lifestyle: 46%
Clear, customers are not convinced if these products serve them more or the insurance company. It is probably safe to assume that this attitude does not help insurance product innovation.
But there is more to the story, when the customers are asked how the insurance industry compares to others in term of their innovative use of technology, the answers are the following:
- insurance is one of the most old-fashioned industries: 19%
- insurers are lagging behind: 48%
- insurance is in line: 25%
- insurance is forward looking: 8%
While there is no single way to get the customers on board, the solution will likely be a mix of various measures:
- new business models, integration with non-insurance industries,
- provide tangible benefits and price incentives,
- better trust and assure transparency in the use of data.