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A Collaborative Solution for Better Insurance

  • 4 min read

Insurance technology today is a barrier. Too many stakeholders with too many solutions (and versions of those solutions). Most that were invented before today’s technology was even dreamt of. Yet, with another layer of duct tape, the industry keeps going for another year.

More frustration for insurance brokers as insurers develop/adopt a new solution to lower expenses, improve efficiency or even work better with brokers (or all the above). Why frustration then? It is simply frustrating to have to learn another way, use another portal. Brokers are also developing/adopting their own solutions that work for them and their customers. So many solutions, so much effort but is it really working for customers?

A distribution vertical that requires multiple stakeholders to distribute needs a more collaborative solution to create better insurance.

The Rise of Ecosystems and Platforms

McKinsey & Co., in their “State of Property & Casualty Insurance 2020” predicts that almost 1/3 of all personal lines (which is over ½ of all P&C insurance sold) will be distributed via B2B2C ecosystems. We predict it will be much higher than that and include increasingly larger volumes of commercial as well as life and health. This will be a clear win for the customer.

For those that may not be clear what a B2B2C ecosystem would look like, it is a cloud native shared platform underpinned by robust automation for all stakeholders in the insurance distribution vertical. The key advantages are better customer experiences including lower prices and Real-Time processing for all insurance activities between stakeholders than older technology could imagine.

Mckinsey agrees with us that “In the future, increasing the value transfer of cheaper distribution to the customers will be key.”, although we call that lower prices.

The final eye-popper that they observed is that by comparing the UK insurance industry to the mortgage industry they found that insurance spends 3 times more on distribution than they make in profit. In comparison, the mortgage industry (using platform technology) spends ½ on distribution than what they make in profit.

Opportunity is great for beating the market and gaining profitable growth at the expense of slower moving or immobile competition.

Henry Ford and Steve Jobs are often quoted for saying that they didn’t listen to customers but, of course, they most certainly did. They both offered customers things that they wanted to buy at prices that they wanted to buy them at that competition could not match. If that isn’t listening to customers, I don’t know what is.

“Some people say give the customers what they want, but that’s not my approach. Our job is to figure out what they’re going to want before they do. I think Henry Ford once said, ‘If I’d ask customers what they wanted, they would’ve told me a faster horse.’ (He didn’t – SK) People don’t know what they want until you show it to them. That’s why I never rely on market research. Our task is to read things that are not yet on the page.”

– Steve Jobs

Knowledge that something was missing and finding out what that was and solving that problem is key to a successful business strategy

What they really meant was that customers are often not able to articulate fulfilling a need without all the permutations of options out there. BUT, the basic knowledge that something was missing and finding out what that was and solving that problem is key to a successful business strategy.

Through industry shopping surveys like J.D. Power’s 2021 Shopping Survey, customers have been “shouting loudly” for a long time that they want better insurance purchase experiences. Even agents acknowledge that fact (the assumption being that they are the closest to understanding the customer in general). Yet, here we are as an industry developing solutions that are not delivering on that clear customer requirement.

“You’ve got to start with the customer experience and work back toward the technology – not the other way around.”– Steve Jobs

Like to see what a collaborative Real-Time broker insurance solution looks like, click here.