What Incumbents Can Teach Insurtechs

If insurtech disruptors have one thing going for them, it’s their digital savvy. They have made it as easy for consumers to research, quote and buy coverage online as it is to make a retail purchase through e-commerce channels. “It took me 60 seconds to buy a policy,” a customer of one disruptor said. Still, insurtech disruptors have a lot to learn about the industry, and some leading incumbents could be the ones to teach them. The Disruptor’s Downward Spiral To understand this better, let’s follow Judy, a quintessential customer as she excitedly makes the decision to purchase insurance from a typical disruptor. First, she enters the site. It’s sleek and beautiful, and everything is easy to locate. Within seconds, she has selected the option to get a quote for her auto insurance, has entered her information and received a price she can live with. Hooray! But wait. Where is the coverage for her home, motorcycle and pet? She searches the site but can’t find other insurance products. She clicks the help button, but all she can do is send an email with her question. Where is the personal touch? And how will she contact someone later when she has a question about her coverage or, worse, a claim? See also: What’s Your Game Plan for Insurtech?   The Lessons The first thing disruptors need to learn is that the quick, convenient online service they are peddling is only the baseline model of what consumers expect from their carriers. Comments from other customers echo Judy’s feelings about the personal touch: “They do not have a phone number, so you are stuck dealing with bots and sending messages through their app.” Hmmmm. Sounds like someone needs an agent. Greg Hoeg, vice president of U.S. insurance operations at J.D. Power, concurs, “While many consumers want to shop online, they often still want to talk to someone when they buy their insurance to make sure they are getting the right coverage or have questions about their policy answered.” J.D. Power also confirms the importance of digital channels in the buying process, reporting that incumbents with leading digital capabilities also lead in premium growth. And this is where incumbents come in to teach the disruptors a thing or two. Following a Better Example Top digital insurers are setting the best example of how to thrive in the changing market. They have continuously improved their capabilities to meet consumer demands for online buying and product choice and have empowered agents with top-grade digital tools. Here is what Judy’s purchasing journey looks like with a traditional insurer imbued with the right digital capabilities and product selection: Judy enters the site and begins the application process. After providing a few bits of personal data, a smart application process begins to draw information from verified third-party sources, auto-filling her application along the way. Throughout the process, she is asked if she would like to add other types of coverage she is eligible for, such as home, jewelry or pet insurance. She clicks "yes" and is soon provided with quotes on multiple options. She has a question about one of the offerings, so she dials the number prominently displayed at the top of the screen. Soon, she is talking with an agent who answers her questions and, without having to gather more information, quickly and seamlessly binds and issues all of the coverage types she wants to buy, in a single transaction. Experiences like these are not the future of insurance. The capabilities exist today, without making extensive changes to current systems. A top-five insurer is already setting the example. It now meet the needs of 95% of current and future customers contacting the agency and has doubled year-over year growth through direct and agent channels. Insurers like these have a message for insurtech disruptors and incumbents alike. It’s time to implement digital solutions and start meeting consumer needs for channel and product choice. See also: Insurtech Checklist: 10 Differentiators   To learn more about outcompeting in a changing industry, download our thought leadership piece, The Changing P&C Insurance Industry: What’s It Costing You?