The modern consumer has no patience for companies that will not adapt to the digital commerce changes within the insurance industry. As a direct consequence, insurers must make the leap from legacy methodology to insurtech capabilities. The power struggle between legacy companies and tech-based newcomers to the insurance sphere no longer exists. Instead, it is vital for all insurance firms to adopt robust insurtech capabilities to survive and thrive.
Of course, it will take more than just insurtech adaptation to attract and retain a consumer base. Read on for Springtree Group’s perspective on the landscape insurance agencies must navigate in the next few years.
- Dynamic Partnerships Will Add Value
Partnered distribution venues are giving insurance providers opportunities to grow into brand-new markets. This approach can offset any struggling numbers insurers have encountered throughout 2020-2021.
For example, Amazon (backing Rivian), Tesla, GM, and Ford have all intruded into the auto insurance market; no doubt additional corporations will follow suit. Therefore, savvy insurance companies must look to their business relationships, always alert for avenues that can be leveraged to expand their revenue streams.
- Data-Driven Coverage Means Customized Products
The results are in: consumers will share their data on an ongoing basis in order to earn discounts on their insurance plan. Look for ways to implement sensor-based data harvesting to create individualized, discounted plans for low-risk consumers.
This dynamic is mutually beneficial, because connected insurance will uncover higher-risk consumers whose policies should reflect their status, while budget-conscious, responsible individuals will stick with a provider who recognizes their efforts.
In short, consumers will reward data-driven, unique coverage with loyalty.
- Innovative Business Models Will Bring in Additional Revenue
As an insurer, it’s vital that you continually seek to position yourself for growth. Like we discussed above, your partnerships will provide opportunities for you to extend your reach into new markets.
Additionally, revenue growth can be gained through the monetization of your agency’s core capabilities. Your job is to analyze your agency and identify your greatest strengths. Now, consider whether these strengths are connected to your greatest revenue streams. If not, it may be time to align your standout skills with your best-selling products.
Insurtech will allow you to expand your services and product lines through APIs (Application Programming Interfaces – software that allows computer applications to “talk” to each other) – giving you a leg up on your competition—especially if they are still adhering to the increasingly obsolete vertical integration model. Maximize your ROI by planning ahead to ensure that your agency’s strengths will translate into the insurtech-based service model.
Your consumer interface, claims processing, agency advisors, and lead generation will all be driven by insurtech. Only adequate planning will make this transition smooth and equally beneficial for your investors, prospects, clients, intermediaries, and agents.
We at Springtree Group are here to support agencies as they adopt and implement insurtech across the board. To discuss the benefit your business will experience, and/or to inquire about our consultation services for the upcoming sale of your agency, please contact us today.