Insurance is evolving at an extraordinary rate. Gone are the days of maintaining the status quo while speculating about what the future of the industry might and may not be. In a post-Covid market, proactive innovation and flexibility to adapt to ever-evolving consumer needs is paramount to success and must be at the top of industry leaders serious about change.
There are three future motor insurance insights to consider. The common theme and golden thread that binds these together is collaboration. Without it, the industry is doomed to stall.
Insurtech is no threat
Adoption of industry-leading technology is fundamental to future success, as evidenced by the rapid rise of Insurtech over the past year. This change should not be seen as a threat to the traditional annual motor insurance model. Instead, it should be seen as an opportunity to collaborate to bring about meaningful change in line with rapidly evolving consumer demands.
We know that various forms of lockdown have prompted consumers to reconsider whether annual insurance was still right for them, and they increasingly seek more flexible options. This overnight shift in consumer behavior meant that large annual insurers were burdened by legacy systems that did not show the flexibility or agility to respond accordingly.
Insurtech companies, which provide fully digital usage-based insurance (UBI) products such as temporary car insurance, were able to rapidly adapt to market changes and meet new consumer demand quickly. Large insurers generally lack the agility to respond rapidly to unpredictable market trends, and this is where smaller insurtech businesses can prove to be invaluable partners, as they are at the heart of the digital UBI product revolution.
They have the proprietary technology and skills to build digital products for large insurers, enabling them to keep up with industry disruptors through collaboration rather than direct competition – all at a competitive cost from the ever-evolving customer demand. completing it. This ultimately means that UBI products should be viewed as a complementary add-on rather than a complete replacement of the current annual model, which still has a significant role to play.
Of course, this is a two-way street, and Insurtech can also benefit greatly from collaborating with large insurers. By partnering with a wide portfolio of well-established underwriting partners, Insurtech has been able to expand its coverage options and acceptance criteria, while ensuring that they offer their clients the widest choice of policies that are most competitively priced in the market. We do.
Data augmentation will optimize pricing
Greater collaboration with data augmentation service providers is another fundamental aspect of future success. As technology becomes more sophisticated, so do fraudsters. If insurers are not adequately prepared to deal with fraud with the latest real-time data available with them, they run the risk of implementing inefficient pricing models that negatively impact honest customers.
There are several ways to address fraud through data enhancement, such as accurately tracing the relationship between bad credit risk and the likelihood of claiming or identifying the risk of payment fraud based on credit data. This is especially important for short-term insurers because payments can potentially be declined once the cover expires.
Another increasingly important aspect for all motor insurance companies is to use the most accurate data to validate the validity of a customer’s ability to drive and qualify for any restrictions on driving offences. This serves to dramatically reduce unnecessarily long and complex query sets for the customer, thereby improving the overall user journey and customer experience.
Expanding Partnership Provides More Value
Collaboration within the insurance sector is paramount to future success, but the industry must be careful not to isolate itself from new opportunities that reach further and add more value to the end-user. For example, an existing motor policy offering can be expanded by partnering with a recovery service provider to add breakdown cover as an option for additional peace of mind.
Another option is for InsurTech to partner with automotive retailers to offer temporary driveway insurance policies as part of the buying experience. This dramatically simplifies the process of how insurance is purchased and consumed as dealerships can provide customers with a fixed price insurance solution that is more transparent and user-friendly, providing a way to obtain newly purchased car insurance. And a positive experience is born.
These insights only scratch the surface of what can potentially be gained through collaboration. One thing is certain: the opportunities are endless, and so are the future possibilities for insurance.
Insurtech should be adopted, not opposed, by established players in the insurance industry. To know more, visit tempcover.com
basically . Published on business reporter
Credit: www.independent.co.uk /