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Attack by InsurTechs: Insurance companies have to act

Attack by InsurTechs: Insurance companies have to act


 

A current study shows insurance companies that they must urgently expand their offer and service portfolio in order to still play a role in the next ten years. Meanwhile, a US InsurTech is preparing to take over European territory. At latest now it is time for insurance companies to advance their efforts in digitalization.

The founders of the InsurTech Lemonade like to claim that they knew nothing about insurances before founding their company. But with an impressive number of 500,000 customers and a successfully completed round of financing with over 300 million USD, the insurance company is beginning to expand to Europe as well [1]. The digital insurance company Lemonade started with its product range in Germany already during this week. Lemonade will have a very simple position in the USA and will try to attract in particular young target groups.

 

The offer and service portfolio must be expanded

In a current study from the company consulting agency Bearing Point, the authors warn the insurance companies that they should personalize their customer relationships and position themselves as providers of a digital network. Insurances that do not rethink how they work now run the risk of disappearing from the market in ten years. Because other providers will have taken over the customer relationships by then.

 

Google, Amazon and Apple will not stand still forever

The customers are now interwoven in a deep network of service offers from large US technology corporations. If you use a smartphone with an Android operating system, you are delivering a lot of data to Google free of charge. And this also includes some information that can provide insight into personal fitness. But even if you have not activated the step counter in your smartphone or you disabled Google Fit, there is enough raw material for data analyses that helps to determine habits: Raw data for different insurance products, in particular for health insurances.

This is no different for Amazon customers. The technology corporation now offers customers an inestimable number of service offers. Sometimes the corporation has to compensate for the losses resulting from this with the help of other areas. However, apparently it is worth it still, because Amazon knows almost everything about their customers.

And Apple? Compared to Google and Facebook, the company positions itself as a type of protector of privacy. But in the end, that is only a part of the truth. Because the attempts to gain ground in the health sector cannot be overlooked. In the meantime, the Apple Watch even helps warn its users of imminent hearing loss. One day (in the not-so-distant future?) Apple could easily act as a broker between customers and health insurance companies. And with the creation of a new identity service (”Sign in with Apple”), the corporation is currently attempting to create a further component in a strategy that will make the banking sector sweat. Because with a company-branded credit card and identity management, the corporation has everything it needs to offer or broker their own banking services. Thanks to smart devices such as the Apple Watch or the iPhone, customer access is definitely down the drain for other companies.

 

The course has to be set now

The shocking news for classic insurance companies is now unmistakable and the necessity to create new (digital!) service offers can no longer be disputed. That would work best for existing customers. Independent of if new offers are created in a symbiosis with InsurTechs and startups or designed in their own power.

CRM systems and software are gaining importance for inventory management. Because the information that can be used to contact customers directly is just waiting there. Data is stored there that the InsurTech cooperation partner is waiting for to excite customers for a new service.

But just as our experience shows, all insurance companies have not been successful in cleaning up this area, eliminating redundancies and allowing for a quick exchange of data.

The complex market events in sales, countless takeovers and mergers have also led to a need to work with partial inventory systems over the past years. Instead of eliminating data silos, this development in sales has led to new pots of data. And that can be fatal.

The course must be set now so that the treasure trove of customer data can be used internally before it is too late. There is not much time left. If you want to know how we can support you with this, contact us!

 

 

[1] https://www.gruenderszene.de/fintech/lemonade-insurtech-startup-hrk

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