Customers are increasingly adopting new technologies in their daily life and with that, expect new business opportunities. This is prompting a revolution in the insurance industry. Here, we show you why 2018 will be the year of digital insurance  with the most important insurance trends.

Insurtech Trends 2018

1. Increased Customer Interaction

80% of insurers plan to invest in digitizing their touch points with customers within the next 2 years – although, chances are, many will experience challenges accomplishing it. With successful implementation, customers can expect a more seamless and consistent relationship with their insurer. Digital documentation and communication allow for real-time updates of policies and increased frequency of contact through digital sales & management channels. This could be on an insurance specific platform or through partner channels (e.g. banks or eCommerce sites) at the ‘point of sale’ or ‘point of transaction’.

In a nutshell:

  • Increased frequency through digital sales & management channels
  • Contact through partner channels, e.g. banks, eCommerce sites
  • More contact at “point of sale” or “point of transaction”

2. Data Driven Insurance Products

Changing customer behaviour often requires hyper-personalized products. The use of IoT to continuously track data provides the ability to generate highly personalized rates and products based on an individuals’ personal risk. Furthermore, it allows insurers to reward customers for good behaviour. Imagine you received a lower insurance premium based on reducing your housing’s heating cost with a digital thermostat.

In a nutshell:

  • IoT and other devices used to track data can influence insurance products
  • Ability to generate highly personalized insurance rates based on individuals‘ personal risk

3. Bancassurance

The introduction of PSD2 to the market opens new doors for insurance businesses – take a look at our previous blog post on Bancassurance! Access to customer transaction data leveraging it allows a more proactive approach, providing customers with security (insurance products) based on their purchase behaviour, which reflects either (micro) moments or life changing events that can be gathered from their banking transactions. This not only rewards customers with a more user-centric experience, but also presents the opportunity for banks to expand their business reach with additional user touch points and product portfolio to become a central finance manager and platform for cross-selling.

In a nutshell:

  • Usage of banking transaction data via PSD2
  • Bank as central finance manager and platform for cross-selling

4. (Digital) Insurance Integration

Insurance products are becoming a standard addition to a company’s business portfolio, as companies across industries start to verticalize their offering to pocket more share of wallet – while increasing customer retention. Insurance is easily integrable, either, as mentioned above, at the ‘point of sale’ or natively into products as almost invisible additions and services to accompany core products. There is an obvious opportunity for online portals and eCommerce players, especially where insurance is legally required (e.g. drone insurance). Digital brokers and traditional insurers are also looking to collaborate with insurtechs in order to stay ahead of the rapidly evolving market and defend their competitive position.

In a nutshell:

  • Consumers appreciate accompanying insurance products at the point of sale
  • Digital players increase their share of wallet through the expansions of their offering, verticalizing with insurance products

5. Flexible Digital Insurance Products

Insurtechs and digital insurance products not only increase customer and business satisfaction, but are also more flexible, adaptable and provide a vastly faster time-to-market. Modular product development provides the ability to focus on those parts of the insurance value chain where one can generate most business and let the infrastructure and core backend systems be outsourced as Insurance as a Platform (IaaP) by those who see their core offering in that space.

In a nutshell:

  • Decomposition of the insurance value chain in individual parts and various players focusing on each or some of them
  • Ability to build significantly more customized insurance products
  • Ease of integration of external data or e.g. gamification components in products to tailor them more neatly towards respective target groups