4 Trending Insurance Disruptors in 2017

September 21, 2017 /

By Doug Mohr, VP of Solution Consulting

Disruption is a natural part of the business cycle, especially in this age of fast-paced technology. No business model is so perfect that it cannot be improved on – or eventually replaced. The ultimate example of disruption involves Apple, which made everything from CD's to Blackberry devices practically obsolete. Disruption is also evident in the world of social media, with the most famous example being Facebook's displacement of MySpace.

Music and social media are natural breeding grounds for constant disruption, but these are by no means the only industries in which this evolution takes place. Disruption is rampant in insurance, as evidenced by the transformation the industry has undergone during the past decade. Innovators such as Geico, Progressive and Esurance have used simplified online-based models to break into a competitive industry and change the way policyholders think about buying and maintaining insurance. Now, newer players such as Zenefits, Google and Amazon threaten to once again turn the industry upside down. These developments are exciting, but if your company is unable to keep up, your services may become obsolete. The following are a few key disruptors for 2016 – how do you stack up?

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Digitization of the Insurance Industry

Although many aspects of today's insurance industry are already dependent on a digital platform, the field will continue to experience further digitization. Current trends include the digitizing of traditional paper documents and electronic delivery of these documents to policyholders. Zenefits has proven especially successful in this regard; one of the company's key selling points is its use of e-signatures, digital document storage and a comprehensive online benefits platform. Meanwhile, outdated insurance companies continue to handle large volumes of paper documents, thereby crippling their ability to attract young, technology-minded consumers. You will quickly alienate consumers if you lack a perfectly-executed online platform. Additionally, a lack of digitization will force you to maintain overhead costs far beyond those of your digitized competitors.

Mimicking the Retail Experience

Policyholders demand easy online access, but they also desire a virtual experience comparable to online retail browsing. Today's consumers possess greater control over their insurance plans and unfortunately, this often leads to confusion. The adoption of eCommerce principles used by major online retailers may help to ease this confusion, thereby transforming the process of obtaining insurance into a more enjoyable shopping experience.

Analytics

Big data has already taken over social media and eCommerce, and now it is poised to transform the insurance industry. In addition to enhancing loss prevention, the adoption of big data practices is expected to allow for stronger relationships with policyholders, as well as improved pricing accuracy. Many auto insurance providers have already begun to shift to behavior-based models, in which behind-the-wheel behavior is tracked and used to determine the policyholder's premiums. In 2016, analytics from third parties will be emphasized, with integrated data from mobile applications and social media accounts proving especially influential.

Changing Business Models

New technology has given rise to new business models largely based on big data and transformative consumer behavior. Changes in risk pools can also be expected, especially as smart homes, driverless cars, and car sharing programs become more prominent. Although these shifts may make some policies all but obsolete, they present a variety of new opportunities in risk management. By harnessing these opportunities, your business can successfully make the impending industry-wide transition to technology and behavior-based risk management.

My main take away for today is to think about how you're currently leveraging technology, and how that technology either helps or hinders your workforce. Are these pending disruptors something you are ready for? You can download our newest eBook on managing your agency workforce here:  

 

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Doug Mohr Career Bio

Doug is the vice president of solution consulting at Vertafore. He joined Vertafore seven years ago to lead a group of subject matter experts that provide presentations on the entire Vertafore suite of solutions to customers and prospects in support of the sales team.  Doug brings over 20 years of software experience having worked at companies that provide solutions to a variety of industries including insurance, healthcare, apparel, professional services, high-tech and manufacturing.

 

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