What is insurtech: Definition, examples, tips
Learn about insurtech, how it's transforming the industry, and how insurance companies can reap the benefits.
Like many industries, businesses, and organizations, life insurance is experiencing dramatic changes when it comes to customer loyalty and retention. While customers were once very loyal and tended to stick around for decades, the digital era has ushered in stark competition – and with younger generations becoming the target market, those consumers expect online options, customized products, and personalized experiences when it comes to insurance.
In The Before Times, the life insurance industry customer experience primarily centered around meetings – customers would call or visit their agent in-person. revolved around meetings between customers and agents. Often agents knew a great deal about their customer, from marital status, when they might have a child, buy a house, etc. You couldn’t get much more personal than that in a professional relationship.
Enter the digital era.
Today consumers can educate themselves and make decisions about insurance before ever contacting an agent.
The digital insurance model is convenient, quick, and relatively simple. But how personalized is it?
Meeting specific consumer needs – at specific times in their lives – is the next era of innovation for the life insurance industry.
By focusing on creating and offering truly personalized life insurance products and solutions for each customer, the industry becomes a trusted advisor, and the agents who embrace this model will likely retain far more customers for life.
Customer experience of this caliber requires much more than updating legacy systems and creating apps for smartphones.
Personalized experiences: Customer-centric life insurance
When compared to insurtech startups, insurance companies that are well-known and established have many advantages:- Brand recognition
- They hold the customer trust that comes with being well-known
- They possess access to customers, thanks to loads of valuable customer data
This powerful trio of trust, knowledge, and access allows insurers to really understand the customer needs – and quickly address those needs.
Customers today greatly appreciate (and reward) contextually relevant information offered at the right time in their journey on the channel of their choice – whether an app, online, or the old-fashioned way: Talking with an agent or rep who’s got access to a complete view of the customer.
These data-driven interactions can forge loyalty between insurers and customers, while providing the level of protection each customer individually requires.
Even in the digital era, when it comes to insurance it’s all about relationships
Insurance has been with us for over 2000 years, but until quite recently it has always been a business of people. These days it’s a business of technology, but relationships still matter.
Customer data fuels personalization
Becoming a data-driven organization requires life insurance companies to think big about how to provide personalized experiences and CX.
Legacy systems weren’t designed to support real-time insights or integrations with backend systems, partners, external data providers, and emerging insurance information sources, like wearables and electronic health records.
The product-centric approach of yesterday is rapidly disappearing as the customer-centric model is embraced.
Modern coretech systems have the functionality to analyze and act on multiple data streams, and feature a customer-centric design and an architecture that uses the same technologies as insurtechs.
These platforms feature:- A rich catalog of APIs
- Event streaming
- Low-code configuration tools
How to personalize digital experience and shine a light on customers
Want to deliver a personalized digital experience that sets you apart from the competition? In order to stand out, you've got to put your customers in the spotlight.
APIs: The foundation for personalized insurance experiences
APIs are a software gateway serving as a go-between connecting tech systems, like your core policy admin system and a policyholder’s IoT-connected fitness tracker.
APIs deliver protocols for system-to-system interactions, and each API handles a specific communications task. More complex interactions between technology applications usually require several APIs or ways to adapt APIs to the target use case – AKA as persona-based APIs.
For many in insurance, this makes an open (non-proprietary), API-rich technology platform critical as the first step in transforming for the digital age. Whether used to replace existing systems or deployed as a flexible integration layer for real-time agility, an API-enabled platform plays the starring role when it comes to providing personalized experiences.
What is the API Economy and why it matters
IoT, smartphones, and wearables have created an instant-update lifestyle that we've come to expect. They've also spurred the creation of endless apps and services to meet the needs of today's always-on consumers.
Know thy customer: Event streaming offers powerful real-time insights
You need access to real-time data if you want to really know your customers, understand their intents and needs, and act quickly upon them. Event streaming plays a pivotal role in boosting CX and personalization, as offers can vary greatly from optimizing current products to suggesting a completely new product based on new circumstances.
Pivotal moments in people’s lives like starting a new job or business, moving, having a child, buying a home – these are all points where data is created within other systems.
When platforms are capable of event streaming, processing of this critical data becomes instant, providing both customers and insurers a real-time record.
Traditional sales agent vs the insurance agent of the future
To stay competitive, insurers need to understand what the insurance agent of the future looks like in the digital era.
Low-code: Configurations on the fly
It’s one thing to design journeys, products, and experiences in theory. It’s another to see how they perform in the wild.
Platforms with low-code configuration capabilities can vastly improve CX and boost loyalty. They can assist in rapid configuration, while also refining products and user interfaces.
After all, the sooner you can reach a customer, the sooner you can either either reap the rewards of personalization or pivot based on the customer response.
Modernizing the customer journey extends well beyond mobility. Insurers who want to remain competitive in the digital era must focus on CX and harness data to provide truly personalized insurance experiences.
The loyal life insurance policyholder of today can quickly become an equally loyal consumer of multiple products in the future when customer-centricity is at the heart of your business.
