By Shreyas Vasanthkumar, Managing Director EMEA at Duck Creek Technologies
From pet insurance to business interruption, almost every company and individual in Europe will buy insurance in some form or other in the coming year. Shreyas Vasanthkumar, Managing Director EMEA at Duck Creek Technologies, highlights how leading insurers are harnessing cloud technology to bring them closer to their customers and deliver more personal, relevant and accurately priced products.
Let’s be honest, insurance is one of those industries that hasn’t always had the best reputation with the general public or indeed in the European business community. There is a view that this traditional sector operates in a world of smoke and mirrors, where reading the fine print doesn’t necessarily mean you are entitled to a payout if there is a claim, and where the product you are buying may not necessarily have kept pace with the reality of the changing world around you.
However, this set of perceptions are increasingly being challenged by Europe’s insurers as they seek to become more relevant and trusted, accelerate their speed to market for new products, maximise their operational efficiency, grow their distribution channels into new markets, and optimise and personalise user experiences.
They know only too well that to lose relevance and trust is to lose market share, and in a world where innovative insurtechs are creating and harnessing an ecosystem of advanced technology to deliver pioneering new data-based products such as embedded insurance, the incumbents are under pressure not only to keep up but to get ahead of the curve through product and service innovation.
However, ACORD’s 2022 Insurance Digital Maturity Study of 200 of the world’s global insurance carriers found that fewer than 25% of insurers have truly digitised the value chain, while more than half of the insurers in the study were still exploring how digitisation can be applied against their business model.
The study highlighted that a rapidly evolving insurance ecosystem, paired with the disruption of a global pandemic, have led to a more urgent need than ever for insurers to modernise. Clearly there is work to be done as the digital maturity of insurance buyers currently far outstrips the maturity of the majority industry’s incumbents.
Indeed, buyers of personal lines insurance such as pet insurance and home insurance, as well as business side buyers of commercial insurance, have increasingly demonstrated a willingness to compare quotes and switch insurance providers, often using online comparison sites.
Consumers are more discerning and demanding than ever before and what they want is easy-to-access, transparent products that are timely and represent good value – without exception.
The number of touch points needed at the point of purchase or renewal is also a key consideration and determined by the complexity of a product. Consumers are increasingly receptive to new types of insurance, as well as to purchasing, amending and switching insurance through apps. But this goes hand-in-hand with high expectations for customer experience. Consumers expect a seamless omnichannel experience.
A powerful dynamic in insurance buyers’ favour
Ultimately this competition over innovation is a powerful dynamic in favour of policyholders, and is driving more personalisation, better pricing and better service across the insurance life cycle for businesses and individuals alike, as well as igniting further innovation that will shape the future of the way we buy insurance.
The link between deploying modern core systems and offering better insurance is clear – those insurers that are able to harness the latest cloud based platforms to transform key processes such as policy development and claims handling are able to reach more customers faster, and be more responsive when they need their insurance to pull through for them in the event of a claim.
Getting new products in front of the right consumers quickly involves a number of elements working seamlessly together – infrastructure, regulatory compliance, pre-packaged content, and flexible technology – but it ultimately reflects an insurance provider’s confidence and ability to deliver in a fast-paced and ever-changing market.
Joining the dots
Modern, cloud-based core systems architecture is helping insurers join the dots where they are needed most and transform not only the way they do business, but also the products they are able to offer – and who they are able to reach with them.
Speed-to-market is also about the wider context of operational efficiency. Insurers relying on old, “home grown” core systems simply can’t offer the processes, data access, adaptability and integrations necessary to support today’s “within minutes” sales requirements.
In contrast, those who use the most agile technology architectures are able to consolidate products, improve on their ability to cross and up-sell, and enhance self-service opportunities – all within their core systems. And they can do this in weeks or months, and scale a new product roll-out across their regional markets – if their data indicates demand is there.
Cloud-based, software-as-a-service (SaaS) delivery solutions for core systems can provide all the services, support, and computing resources insurers need. By leveraging the best available technology and continuously delivering new functionality to solve evolving insurance business challenges, cloud architecture enables a fundamentally new and evergreen approach to maximising operational efficiency and the ability to compete consistently and effectively in today’s market.
A single, unified suite of SaaS-based insurance solutions can take inconsistency, poor integration, and lack of transparency off insurers’ lists of worries. Building on this, an insurer’s core systems provider should also connect them with global, regional, and local ecosystems to empower seamless insurance purchases and claims management.
By accessing intelligent ecosystems with the best technology available, insurers can move away from closed-box silos to open, adaptable, and evolving systems of partnerships with innovators – such as those harnessing artificial intelligence, or telematics data – that work seamlessly with their core systems.
Embedded insurance is the next frontier
And it is this openness of the cloud architecture for modern core systems that is opening the door to the future of embedded insurance – currently still conceptual in many fields, but ultimately set to be a tech-powered game-changer in this sector.
Essentially, embedded insurance is an initiative whereby insurance is automatically included in the product or service being bought – for instance insurance would be automatically included when you buy a new electronic gadget, or a car, or indeed when you welcome a new pet into your home and register with a veterinarian.
The data and information you give when you buy the product or service, or register your pet, is linked to the insurance provider and a personalised policy is generated and embedded in your product and its cost is priced into the product at the point of sale. Technology can also be used to generate a simple and transparent claims trigger as well, without the need to file a claim or liaise with loss adjusters.
Imagine buying a new smart watch and accidentally dropping it onto a concrete floor six months later – the watch would immediately register itself as damaged beyond repair, and its owner would receive the insurance claim value into their bank account within 24 hours, without having to pick up the phone.
Put simply – and as a key part of the customer journey – embedded insurance provides the perfect opportunity to offer relevant coverage exactly when customers are most likely to recognise its value and the real-time experience it offers.
That is the future that the insurance sector is rapidly moving towards, and modern cloud-based core systems are powering this shift. Watch this space!
About the Author
Shreyas Vasanthkumar is Managing Director EMEA at Duck Creek Technologies. His experience spans end to end execution & management of direct sales, business development, global account management, marketing, and bid management functions with P&L responsibilities. Throughout his 19 year career with Hexaware, Shreyas has been an integral part of their growth story from a $ 50 Million revenue business in 2003 to a $1 Billion business in 2022. As an entrepreneurial leader who has successfully built business in US, EMEA and APAC, Shreyas brings a combination of skills to drive successful business growth for Duck Creek in the EMEA region.