It’s not difficult to find examples of personalised insurance. Several major insurers already use vehicle and fitness trackers to influence their members’ premiums and encourage more responsible behaviour. Numerous industry reports reflect this, including from PwC and Deloitte, the latter calling insurance customers "the disruptive force of the industry".
But tailoring policies will become a more extensive practice, especially as customers move closer to underwriters and buy directly. It will be prudent for brokers to offer personalisation services and align with underwriters that can facilitate that. This is true for both individual sales and bulk purchases.
“If you look at new insurance startups and the trends in the insurtech world, they are all customer-centric,” said Riaan Bekker, Force Solutions Manager at thryve Solutions. “This is a big change. As much as underwriters and brokers believe they serve customers, the primary relationships existed between the partners. This culture mainly resulted from the need to pool insurance policies to minimise risk. But modern technologies have added the nuance that puts customers - individual customers - in the centre.”
Personalisation as a business model
Examples include the above-mentioned vehicle analytics and fitness trackers. Insurers even subsidise expensive devices such as Apple watches to entice lower-risk behaviour from their customers. This concept is spreading into niche cases: a US startup called BEAM offers connected toothbrushes to customers that sign up for its dental insurance.
Whether customers will flock to high-tech mouth care is still an open question. But the shift towards individualising insurance is not. This granular quality doesn’t just sit with private consumers. Business clients, as well as internal (primary) corporate insurance, are also developing an appetite for policies that cater to their unique attributes.
“Insurance customers want to have more influence on their policies,” said Neer Rama, thryve Solutions’ Force Solutions Product Manager. “It doesn’t matter if the service is for the market or to manage internal policies. Tailoring can be offered at every level of insurance. Trailblazers among incumbents as well as startups have introduced these services to everyone. This is putting pressure on others in the industry to evolve as well.”
But how can a company establish this new regime, where the customer is at the centre, and policies can be individually adjusted without upsetting the overall balance or liquidity of the underwriter? How can brokers, some feeling at risk of being cut out of the loop as customers buy straight from underwriters, adopt these modern capabilities?
Putting personalisation within reach
Software platforms are the answer. Some refer to these as the cloud, of which platforms are a subset. Cloud-based software can be consumed as needed by users. Instead of buying and installing expensive applications, as well as the hardware to run them, cloud software platforms can be provisioned to a business on an OPEX basis. There is less investment to sweat, more to use on-demand, and costs are manageable and predictable. These characteristics render the software accessible to everyone, from one-person operations to multinational conglomerates.
Such platforms are revolutionary. thryve, for example, incorporates Salesforce Financial Cloud and Riskonnect as part of its solutions. These are services built on Salesforce Lightning, a massive platform that rivals the likes of Microsoft and SAP.
Platforms are very dynamic. They celebrate the spirit of tailoring: every instance can be altered to the needs of a business, specific departments and even individual roles - without destabilising or restricting the underlying platform. The services are provided through web and app interfaces, accessible through web browsers and mobile devices. If you are familiar with a service such as Office365 or Gmail, the Salesforce and Riskonnect experiences are similar - but much more advanced, and fine-tuned to the specific needs of the users and their industries.
Platforms are the differentiator if they are applied through the experience and rigour of a top solutions provider. thryve has seen first-hand how platform technologies are changing the insurance world.
“Many of the projects start small then expand as the customer sees the extra potential,” said Sean Pyott, GM of thryve Solutions. “I’ve worked in the risk and insurance worlds for a long time, but I’ve never seen those industries adapt and expand so quickly around a new idea. Once they experience what platforms can do, it becomes almost an intuitive journey. This is why we’ve seen such an explosion in personalised services. Once underwriters and brokers could offer individual customers merit for their positive behaviour, it opened the floodgates.”
Make policy personalisation a 2020 priority
Personalisation is not a trend for 2020; it’s been gathering momentum for several years already. But the trend is tipping into becoming the status quo. Insurance ecosystems that don’t follow suit are in real danger.
Fortunately, the journey to personalised insurance starts with a simple step: a move into the platform world. Even a basic proof of concept to tackle internal efficiencies is a significant move towards realising that personalised future.