The impact of business and consumer trends is sometimes seen more clearly when we link them together. For example, if you follow the progression below, you might come to some new conclusions about where and how P&C insurers should be targeting their future development strategies.<\/p>\n\n\n\n
The message is clear. A volatile world has generated new scrutiny by individuals and companies. They want to prepare for anything by shielding themselves against loss and doing what it takes to keep the keys to their future in their own hands. The customer wants to drive. Are insurers prepared to thrive once we\u2019ve handed them the keys?<\/p>\n\n\n\n
Last week, Majesco and Capgemini jointly released a thought-leadership paper, Embracing Innovation and Growth Opportunities in P&C Insurance<\/a>. In last week\u2019s blog<\/a>, we used the paper as the springboard for a discussion on why P&C insurers need to reinvent themselves to fit new market needs. In this week\u2019s blog, we\u2019ll look at how creating an engaging customer experience will invigorate an insurer\u2019s strategy and allow them to capitalize on platform technologies.<\/p>\n\n\n\n At a high level, insurers need to accomplish two interrelated goals.<\/p>\n\n\n\n In this new insurance era, nearly every process is rapidly becoming frictionless, including buying. If distribution channels are easy to use with products that are easy to understand, then insurers can grow through a friction-free, multi-channel distribution system. According to the World Insurance Report 2021<\/a> by Capgemini and Efma, more than 70% of customers expect a seamless multichannel experience for policy research and purchase.[v]<\/a> The benefit of adapting to these channel dynamics is that we move from needing to sell people on purchasing insurance to introducing insurance that is ready to be bought seamlessly at the point of need, creating a scalable, sustainable business model.<\/p>\n\n\n\n Technology is fueling customer expectations, altering and expanding markets and channels through which insurance is sold, including automotive, transportation businesses, BigTech, and more. To prompt customers to buy insurance products independently, in addition to identifying customers\u2019 needs and expectations, insurers have to understand and adapt to their behaviors. Customers want to buy where, when, how and from the provider that offers the best fit.<\/p>\n\n\n\n Crucial to this is the expansion of partner ecosystems where insurers can assume multiple roles, from the owner of the unifying experience to the orchestrator of the products and services or provider of products and services. This will lead to a transition of the insurance value chain from a monolithic to a modular one, where the industry players will focus on their strengths within a specialized value chain. This can lead to two future scenarios as highlighted by the World InsurTech Report 2021<\/a> by Capgemini and Efma \u2013 Insurance embedded as a value add within third-party ecosystems <\/em>or Insurance with added value at the core of the offerings<\/em>.[vi]<\/a><\/p>\n\n\n\n What they achieve will depend on their ability to enter the market while it is still an uncrowded white space. As early insurers enter these markets, they will be experimenting, succeeding, failing and learning how to best fill their roles in the new insurance landscape. An insurer\u2019s ability to enter now will provide greater long-term value. New revenue streams and access to broader markets will produce a multiplier effect. We are currently seeing this play out in the new affinity and program business models emerging in the market.<\/p>\n\n\n\n Insurers need to rehearse their role by adopting the \u201ccultural persona\u201d of flexibility. Firms with a cultural mindset that insurance must adapt to the customer will overtake competitors that believe policyholders must adapt to insurance.<\/p>\n\n\n\n What these insurers will find is their choice of location in the ecosystem, the best pick of available roles, and the first crack at innovative products that will change the face of insurance. The future is dependent upon being in the right place at the point of opportunity.<\/p>\n\n\n\n Of course, demand for insurance isn\u2019t the only determiner for insurance value. Innovation plays a role. Can insurers anticipate what\u2019s coming and make forward-thinking, market-moving products and services? Can they use customer trends to predict customer needs and voluntarily give customers the keys to buying? It isn\u2019t easy for any organization to gain the momentum it needs for change while the enterprise is in motion.<\/p>\n\n\n\n Industry trendsetters differentiate themselves by first releasing their need for legacy operational traditions that are built into their current business core systems. Instead, they proactively shift their technological and administrative weight using a two-speed strategy for growth and future relevance.<\/p>\n\n\n\n Visionary, inventive leaders see the market, customer segments, and technological trends as a gateway to new revenue. Therefore, they are preparing to use new data sources, reach new market segments, offer innovative customer-appealing products, create exceptional CX, and leverage new channels.<\/p>\n\n\n\n Leaders execute exceptionally well from Knowing to Planning and then Doing, aligning priorities to strategies and action. When these are not aligned, a Knowing-Doing gap emerges that defines insurers as a Leader, Follower, or Laggard, based on Majesco\u2019s Strategic Priorities research.<\/a><\/p>\n\n\n\n Companies that procrastinate put their future at risk. The time for plans, preparation, and execution is now \u2013 recognizing that the gap is widening and the timeframe to respond is closing. Leaders, as early adopters, are positioned to succeed.<\/p>\n\n\n\n Leaders are using an outside-in view with the customers\u2019 needs at the center. This is where platform technology makes a difference. Platforms are underpinning robust business models with network effects that disrupt traditional models, create tremendous customer loyalty, and offer significant opportunities for growth. As a result, platforms are fundamentally changing businesses, and insurance is no exception.<\/p>\n\n\n\n The heart of the insurance platform<\/a> is an orchestration of next-gen technologies, including cloud-native computing, microservices, APIs, new data sources, and artificial intelligence and machine learning, coupled with a vibrant ecosystem of partners that provide innovative or complementary products and services. This unified combination of components enables insurers to shift from owning complex core systems to owning greater technical agility and flexibility, digital fluency, innovation, and the speed to value required to meet today\u2019s pace of change.<\/p>\n\n\n\n Leading firms are partnering to expand reach, adopt new capabilities, access new data, and accelerate speed-to market.<\/p>\n\n\n\n The most successful insurance leaders are increasingly adopting leading platform technologies and are innovating at a faster pace. They increasingly see themselves as technology companies providing protection services vs. insurance companies using technology to deliver insurance products.<\/p>\n\n\n\n For a deeper look at the report, including the six key focus areas that insurance firms can leverage, be sure to download Embracing Innovation and Growth Opportunities in P&C Insurance<\/a>. And, if you\u2019re curious about all of the benefits you\u2019ll receive through core transformation, you can receive an excellent primer and overview with Majesco\u2019s latest webinar, An Intelligent Core to Transform Your Business<\/a>.<\/p>\n\n\n\n Co-authors:<\/strong> To continue this conversation, connect with Seth on <\/em>LinkedIn<\/em><\/a> and Denise on <\/em>LinkedIn<\/em><\/a> or <\/em>Twitter<\/em><\/a><\/p>\n\n\n\n [i]<\/a> https:\/\/www.statista.com\/statistics\/246261\/total-personal-savings-in-the-united-states\/<\/p>\n\n\n\n [ii]<\/a> Caporal, Jack, GenZ and Millennial Investors; Ranking the Most Used and Trusted Investing Tools<\/a>, The Motley Fool, August 3, 2021.<\/p>\n\n\n\n [iii]<\/a> Callaghan, Shaun, Martin L\u00f6sch, Anna Pione, Warren Teichner, Feeling Good: The Future of the $1.5 Trillion Wellness Market<\/a>, McKinsey, April 8, 2021.<\/p>\n\n\n\n [iv]<\/a> Bundrick, Hal M., \u2018Financial security is fun now.\u2019 Many Americans want to keep saving more and spending less.<\/a>, MaketWatch, January 21, 2021.<\/p>\n\n\n\n [v]<\/a> Capgemini and Efma, World Insurance Report 2021<\/a>, May 12, 2021<\/p>\n\n\n\n [vi]<\/a> Capgemini and Efma, World InsurTech Report 2021<\/a>, September 16, 2021<\/p>\n","protected":false},"excerpt":{"rendered":" The impact of business and consumer trends is sometimes seen more clearly when we link them together. For example, if you follow the progression below, you might come to some new conclusions about where and how P&C insurers should be targeting their future development strategies. The message is clear. A volatile world has generated new…<\/p>\nResponding to change. Changing to respond.<\/h2>\n\n\n\n
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Shifting from push to pull<\/h2>\n\n\n\n
Role rehearsal<\/h2>\n\n\n\n
Market moving through speed and agility<\/h2>\n\n\n\n
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Platforms fit customer-centric engagement and insurer needs for rapid flexibility<\/h2>\n\n\n\n
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Seth Rachlin, Global Insurance Industry Leader, Capgemini
Denise Garth, Chief Strategy Officer, Majesco<\/p>\n\n\n\n
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