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Following the launch of the Experteq 2018-19 Insurance Report, we partnered with Insurtech Australia to host a panel discussion on customer experience. The panel, “How customers are shaping the future of insurance” was moderated by Ben Webster, Founder of Insured by Us, with panelists Raj Venkateswar, Head of Architecture, Experteq; Margot Birbeck, Sales Director, Inquba; Aamer Fattah, Research and Development Specialist, Munich Re; and Warren Burns, Founder Cinch Insurance.
The Experteq Insurance Report 2018-2019 highlighted the shift in focus incumbents have towards customer experience and engagement, and how ultimately, they see this as a key to future success. The discussion focused on what the future of insurance might look like in this changing environment, what barriers organisations face in having a true customer focus, and how do insurtechs approach the customer experience challenge.
Future of insurance industry
The Experteq Insurance Report identified that customers have more complex needs and are more knowledgeable about their choices than ever before. Warren Burns and Insurtech Australia believes the insurance industry is acutely aware of this but seems to be unable to change fast enough to put the customer at the centre of their business. He believes Insurers must find a way to involve the customer in the product design process so that differentiated products can be created.
Aamer Fattah agreed and explained that projects he has worked on where customer-centricity was part of the product design have been the most successful. His experience has shown that capturing and using customer data gets results because you’re developing something the customer has had input in to.
Raj Venkateswar agreed but said that Australian incumbents don’t have the balance sheet pressures to change considering their CORs and lapse ratios. Perhaps it’s that the sector is not as competitive as others globally. Also, it is likely that changes to legacy platforms and processes are extremely difficult and it has to be led by the Board and CEO. Unless there’s a Board mandate, incumbents will struggle to change the tide, even though they recognise the value of customer-centricity.
A key finding in the Experteq Insurance Report was that amid re-prioritising the customer, technology has slipped from leaders’ agendas. This was a sentiment agreed with by the panel who acknowledge that big tech investments are expensive and therefore businesses are hesitant to invest.
However, technology in the insurance industry is here to stay and Aamer identified that organisations can achieve results through small targeted projects with the customer in mind. Warren agreed and shared an example of when he was at Unilever where a small technology project was started by one of their new graduates and yielded great results for the organisation.
There was consensus that smart investment in technology needs to be the focus for many Insurers, particularly incumbents.
Another barrier identified was the seeming reluctance for Insurers to look outside for answers. Customers are shaping the future of business, however, the feedback loop from the customer was perhaps absent or limited. Margot Birbeck spoke of the importance of understanding customer insights, for example, which platforms are they using, why are they lapsing, what is their end goal, etc. Margot’s advice is that only once you are armed with this information, you design a product. Furthermore, it is important to engage with customers along with the design and production journey. Their input is invaluable and testing assumptions with customers, allows organisations to be truly customer-centric.
Insurtechs and customer experience
Turning to the role of insurtechs, the panel agreed insurtechs have a role to play in enabling incumbents to hear the voice of their customers and implementing solutions that are more customer-centric. Driven by legacy processes and systems in larger organisations, startups can provide opportunities to simplify their products and develop new, cleaner go-to-market strategies.
At Munich Re, Aamer says they have a team of innovators internally tasked with finding innovative solutions. He also acknowledged they work with insurance innovators externally, meaning they are sourcing the most up-to-date ideas for engaging with their customers.
From an insurtech Australia perspective, Warren revealed insurtechs are being more and more well-received in the sector. His experience has been positive from both big and middle Insurers who understand the value startups bring to their business.
In summary, for the modern Insurer to succeed, the customer needs to be front and centre; balanced with the right mix of technology and innovative solutions. Insurtechs have a valuable role to play in this mix, with partnerships between start-ups and incumbents leading the way of the future and delivering on changing customer demands.
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