Insurers can put bite-sized innovations on the menu

Digital innovation is no longer just about reducing costs or improving margins — COVID-19 has shown that it’s also a crucial addition to risk management processes and business continuity planning (BCP).  

That’s according to Michael Lovegrove, the founder of JRNY, an insurtech company that partners with insurers to help improve the customer journey and experience. 

COVID-19 HIGHLIGHTS DIGITAL GAPS

He says insurers have been typically slow to innovate for many reasons including the belief that partnering with insurtechs is risky.

‘But COVID-19 has shown that slow adoption of technology is actually a risk in itself,’ he says.

Lovegrove points out that COVID-19 has shone a light on poor digital customer experience resulting from overwhelmed call centres, adviser inefficiency (especially when in-person sales are impossible), inadequate legacy systems and manual claims processes.

‘Take reliance on call centres as one example,’ he says. ‘Spreading your call centre across multiple locations is not a sufficient risk management strategy in today’s world.

‘Customers are sitting at home wondering if they’re covered or seeking new cover, while call centres and advisers are scrambling to work from home or struggling with the high volume of enquiries.

‘Insurers need to continue to sell policies even when face-to-face is more difficult than ever. They need to empower their advisers and they need to be there for customers in their time of need.’

THE ROAD TO BUSINESS CONTINUITY

At the 10 June ANZIIF webinar, Digital innovation, business continuity and procurement in the new world, Lovegrove plans to argue that in terms of business continuity, customer facing digital offerings are imperative.

‘I believe keeping the customer at the centre of any initiative during uncertain times will help guide insurers to make decisions that are resilient and sustainable,’ he says.

‘Offering a good digital customer experience is critical for insurers to continue serving existing customers well while selling policies to maintain business continuity.’

SMOOTHING THE CUSTOMER EXPERIENCE

For Lovegrove, this might include allowing customers to self-serve using a simple and easy digital user interface, but also providing digital handovers to selected advisers to improve an ‘often convoluted’ ecosystem.

‘At JRNY we call the latter innovation an “adviser referral tool” — it collates information in a smart conversational interface and then allows the user to select an adviser to continue the process,’ he explains.

‘The user and adviser both save time, essentially removing the need for the first in-person meeting altogether.’

Other examples include digital marketing and sales or customer engagement tools. 

A WEALTH OF CHOICES

COVID-19 has highlighted the importance of having everything in the cloud so remote work is much easier as well as investing in a good application programming interface (API) so digital projects are simpler to start and implement.

‘There are also a lot of great innovations happening in the claims space, and any ability to bring in AI to improve risk, fraud detection or underwriting will future-proof insurers,’ Lovegrove adds. 

‘There’s a lot of work to be done to accurately assess risk and I think AI and machine learning will eventually shift this significantly.’

STREAMLINING PROCUREMENT

Lovegrove says partnering with insurtechs is a great way for insurers to incorporate these crucial innovations, especially ‘at a time like this’.

‘Because insurtechs specialise in individual components of the value chain they can deploy with much greater speed, agility and cost efficiency than an insurance company could to do on its own,’ he says.

But with partnerships comes procurement processes involving legal, security and data to name a few.

Lovegrove believes part of the reason many insurers have such ‘heavy’ procurement processes is that they have previously undertaken large, ecosystem-wide projects that require intense due diligence.

While it’s with good reason that insurers have such processes, Lovegrove says they are usually designed to cater for traditional or outdated technology changes involving risky, upheaval and cost.

STARTING SMALL

‘Insurtech projects are most frequently small, bite-sized innovations that can even start as a proof of concept or pilot with little or no need for a lengthy procurement process,’ he explains.

‘It would be great to see streamlined procurement processes prepared for insurtech relationships to encourage speed and ease of procurement that can occur without compromising security or exposure to other risks.

‘Many Asian insurers are great at this and it would be good to see New Zealand and Australia following suit.’

Lovegrove says bite-sized innovations are great for insurers to start with right away post COVID-19.

‘Speed is key in a crisis,’ he says. ‘It’s what consumers want and expect today — they want the ability to choose digital self-service if they wish, or to be easily connected with a human if they wish. They want the choice.

‘It’s not about removing brokers or advisers at all — it’s about empowering both the adviser and customer.

CUTTING THE RED TAPE

Lovegrove also says having clear pathways for insurtech innovations with specialised innovation teams will help partnerships of the future.

‘Working with multiple people from 10+ departments is a bureaucratic nightmare to be honest,’ he says, ‘for both parties.

‘If insurers could designate a team of 5-10 people, each leading one facet of the project such as marketing, legal, security and IT, plus one overall manager, partnerships would be much more effective and efficient.’

WORKING TOGETHER

Lovegrove says JRNY is built on the belief that insurers and insurtechs can be far more effective at solving worldwide industry problems by working together.

‘Insurtechs can be better prepared, by being enterprise savvy which would include having mature enterprise security and data standards,’ he says.

‘They can do this while retaining the desirable attributes of a tech company — agility, speed, working in a sprint format and so on.’

EMBRACING FOR THE FUTURE

Lovegrove plans to bring home to insurers at the webinar that insurtech partnerships will prepare insurers for a digital future and test any new procurement processes or ways of working.

‘This is an opportunity for insurers to become more agile and efficient — to test, learn and iterate — which will in turn speed up future innovation projects and improve their future ROI.

‘Digital innovations, such as digital customer experience, are no longer just a nice- to-have for insurers — they’re crucial as part of business continuity and risk control,’ he says.

‘This is now more relevant than ever. Come along and join the conversation.’