Insurance companies have faced an intractable and persistent issue: their clients don’t like them that much. It is just a natural consequence of relationships that only happens when there is something wrong. That is why people in the industry have come up with something to solve the problem: stop being a traditional insurance company.
They need to become a company that focuses on the services instead of offering something beyond the conventional mailing of checks to pay for a holiday that was not promised, fix a damaged car bumper, or fix broken water pipes. The insurance industry is facing a massive amount of disturbances as established companies like Amazon are redefining the landscape when it comes to customer experience.
Insurance software provided companies like this vendor are also starting to give businesses a piece of mind when it comes to insurance policies. Customers do not want to buy products, but instead, they want their problems to be solved. Higher customer expectations are not the only issue most insurance companies are facing.
All over the world, the insurer’s core markets are starting to mature, growing, and becoming competitive. And because of the financial crisis that happened, they need to struggle with new capital rules, as well as lower interest rates, both of which have made a substantial dent to their conventional business models.
Insurance services are progressively seen as an answer to all their problems. If this is done right, the cost of providing the insurance company solutions will make their clients happy, higher profits, and less revenue for their investors.
For a lot of insurance companies, this kind of move is a great attempt to keep their clients and win new ones. But for other insurers, it is an essential and rudimentary shift in their business model that can change the relationship between clients and investors.
There are companies like UK’s Standard Life, have ceased to be an insurer altogether. Their stock market listings moved out of the insurance section just a couple of years before their merger with an investment management company, the Aberdeen Asset Management. Insurance services take many forms.
A travel insurance company like Cover More offers trauma nurses and psychologists to their clients that experienced calamities like floods, earthquakes, or wildfires. Another insurance company, General from Italy, provides babysitting services for their clients who have to stay in healthcare facilities.
When it comes to cyber insurance, services that clients see tackles with attacks as a part of the insurance plans companies are selling. It is an excellent opportunity for the insurance industry to become more understandable for the clients, which for many years has been the industry’s biggest weakness. For more information about cyber insurance, you can visit https://en.wikipedia.org/wiki/Cyber_insurance.
Customers did not understand why they need to get insurance. For most companies, the main goal in offering these kinds of services is to enhance the loyalty of their clients in the industry, since most customers are very hesitant when it comes to insurance policies.
The industry has a fundamental weakness on customers strategically, Clients has at least ten insurance policies, but you can rarely find clients with more than three policies with the same insurer. Client loyalty is at an all-time low, and this is the best opportunity for companies to exploit. There’s evidence that these strategies can work perfectly if done right.
Technology has made it a lot easier for the insurers to monitor what their clients are doing. It can be beneficial when it comes to setting a price tag for the insurance plan. It can also be used to give the clients advice on how to avoid specific incidents that can lead to insurance claims.
Instead of giving out checks when there’s a disaster or something terrible happens, technology can help stop bad things before it happens. For example, Generali, an Italian company, put boxes on some of their client’s vehicles that light up when their drivers have a history of dangerous driving.
Aviva and RSA, and insurance company are installing kits to detect the leak in their client’s homes so that they can spot a drip before it turns into a full-blown flood. When it comes to health insurance, companies like Vitality provide their clients with advice on what is the best way to exercise and what foods are good for your current health.
They also measure their client’s activities using connected devices like Fitbits. People who avail these programs can receive significant discounts of up to 60% when they get their insurance plan. Other people see the service change, as a way to generate a new stream of income to complement or replace conventional insurance business.
When it comes to casualty and property insurance, AXA is one of the companies that are looking for additional revenues. According to their management, one of their biggest problems when it comes to insurance services is that clients are not willing to spend money on these insurance policies; it becomes more cost-centric.
The big question we need to address is: can insurance companies create a service that can self-create, by earning a driving growth or fee? Reinsurance companies that help traditional insurers to minimize the risks are also looking for any good alternatives.
They create business models that involve taking a chance in exchange for a premium, just like any insurance company would do. Luckily, investors are taking on the reinsurance, risk using instruments called insurance-traditional reinsurance. The potential growth for traditional reinsurance is minimal.