2016 has been called the 'year of the disrupters', as insuretech start-ups, most recently Wrisk and Zugar Znap, launch to target millennials and other niche markets. Do insurance providers need to diversify their product offerings/approach to market to avoid missing out on these potentially lucrative demographics?
While insurers consider how to respond to the era of connected technology, a new breed of connected consumer is coming to the fore. For millennials a steady stream of digital interaction is the norm, leaving the door wide open for new, more agile competitors to rip up the rule book and disrupt the insurance industry.
To avoid getting left behind, insurers need to adapt to this changing marketplace, but how can they achieve this? The first rule, as always, is to start with the customer, as it is only by understanding the risks individuals face now and how they want to be engaged with that insurers can diversify their product offerings to mitigate these.
The next question this raises is how insurers can deliver solutions people will use. As lifestyles continue to change, so does the face of insurance, with bespoke coverages to suit particular niches and target markets. For millennials, this could be dedicated protection for the gadgets they own, while, for the Airbnb generation, we have recently seen the introduction of on demand host insurance.
It is simply not enough to repackage a one-size-fits-all product to target these new demographics. To truly stand out, insurers need both niche products and to deliver added value. For example, millennial insurer Zugar Znap provides social content alongside its products, while Vitality enables individuals to benefit from cheaper life insurance in return for visiting the gym.
Disruptors have the agility to deliver all of this seamlessly, yet traditional insurers are often held back by legacy software. Insurers need a responsive, modern, real-time infrastructure that makes it much faster and easier to add new functionality, modify processes and therefore adapt to meet the challenge of disruptors. At SSP, we have invested heavily in capabilities to enable businesses to change or build products in a matter of one or two days.
Of course, this all needs to filter down to create a claims experience rather than a claims process. Research has already shown that one in four UK drivers would definitely use an app for the claims journey, and there is the same appetite for reporting home and travel claims this way.
With 2016 being labelled the 'year of the disrupters', now is the time for insurers to ensure they appeal to the customers of tomorrow — before someone else does.
This article first appeared as an editorial in Modern Claims Magazine issue 19
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