Over the past few weeks there have been many digital trade shows with the InsurTech and Insurance sectors. Obviously, everyone was skeptical and quite curious about how a fully virtual trade show would operate and if there is any value in investing to participate.
There has been a lot of fireside chats and even complete presentations about existing innovation and digitization efforts of incumbents in the US insurance business. We also got the joy of seeing how many living rooms, home offices, and family dens of insurance executives, which can be an interesting added bonus.
Before jumping into the big lessons and takeaways from these events, let’s spotlight the teams and event leaders that have best been able to rapidly adapt and organize these digital shows with relevant speakers and even make them free to attend! Prior to COVID-19, the SimplePin team would have attended only a few due to time restraints, focusing resources, and optimizing business priorities. Now, our team has already done over 10!
Shout out to Jay Weintraub and the ITC team, Reuters events showcasing many different areas within insurance specifically, Applied Systems with the growth and showcasing for AppliedNet, and even the Silicon Valley Insurance Accelerator with their Innovation Trailblazers series. Each of these teams, and many more, have shown major resilience and provided a quality service in a time of need.
Virtual Trade Show Key Takeaways
Besides the various interior design inspirations our team was able to gather, we also took away some important lessons from these virtual trade shows:
- Other insurance innovations and solutions do a better job than us, making themselves more relevant to carriers to provide a solution to a specific problem they think is more worthwhile to solve. Solution… Message clarity. We will change that!
- Many innovation efforts in the industry are patching efforts by fixing organizational issues instead of sound innovations really operating well from A to Z. Analog-digital-analog defeats the purpose. That’s implementing electronics, not digitization.
- Customer experience is secondary in insurance innovation. Most efforts are geared to reducing cost in distribution, underwriting/risk, or claims. There are few innovations out there taking into consideration the person the insurance actually serves.
So Where’s the Innovation?
A great example of claiming and discussing innovation, but lacking the follow through, was clear as day when a P&C claims executive delivered a fantastic pitch on how their company innovated their claims process. Their idea of innovation was flying drones and using AI to assess fire damaged homes in the California wildfires to expedite the claims process.
Overall, this seems like an incredible effort, which saves time and more quickly provides relief to the insured, especially when compared to having an army of claims adjusters driving around a smoldering county.
Well, not so fast – when asked later, in a fireside chat with other carriers if they settle claims digitally, they don’t... and as a matter of fact, none of them did.
They are still sending physical checks and not even by drone.
This example describes, not a chicken or egg problem, but how decision makers within the insurance industry think.
In their view, the value chain starts within their organization. However, it is truly the contrary.
Where Does the Value Chain Begin and End?
The value chain starts and ends with the insured. The insured is the sole source of growth and profits while the customer experience is the key to all growth. Many tend to forget this.
Applied Systems recently released a whitepaper on the rising generation of insurance buyers - millennials - and it sheds great light on this value chain point perfectly.
Millennials and Gen Z leverage word-of-mouth referrals for almost 50% of their purchase decisions in insurance. This means insurers need to make sure customer satisfaction for their already insured is top-notch if they truly want to see growth.
Instead, insurers are focusing on operational efficiencies for cost savings or risk mitigation as the way to profit growth, and this will just never get them to the level that is needed for true growth instead of just bottom line improvement.
The insured want to buy the right coverage conveniently and as cheaply as possible. In the case of a claim, they want to be able to receive their claim pay out as fast as possible.
How Does Digital Fit In?
Rather than bringing the insurance experience that is visible to the insured up to date, the industry has oddly prefered to try to tackle the really tough stuff… the things they perfected over 400 years ago. (See: drone flying innovation that isn’t really happening).
Yes, there are inefficiencies, but the insurance industry is really good at the core skills.
I can’t imagine the strain and friction this mammoth task puts on organizations to digitize risk, underwriting, claims etc., adjusting already well functioning systems. This clearly identifies the cause of the slow speed of innovation in insurance.
Why not start the digitization effort where it has the biggest positive impact with the lowest strain on existing organizations?
It’s called a convenient digital customer experience. Don’t believe that’s it? Look at Amazon’s stock price.
Laying the foundation with a great digital customer experience and no, none of the incumbents have one, will provide any insurance carrier, broker, or MGA with the biggest gains in customer acquisition, satisfaction, retention, and growth.
Additionally, it increases operational efficiency and provides the base for future internal digitization efforts. Fixing the first and the last mile will make the biggest positive impact for any insurance business and their clients.
Interested in learning more about a software that can do just that for you? Want to quickly and seamlessly digitize your customer experience and remove the friction from your internal invoicing operations?
Want to know more about SimplePin?