The UK Insurance landscape is changing. British Insurance companies are being dragged into the twenty-first century through a combination of technological innovations, diversified needs, the emergence of big data-harvesting by comparison and consumer sites. Plus, there’s an increasingly demanding customer base, especially the younger demographic entering the age group where insurance coverage becomes a fact of life. Other drivers behind the changes have a connection to the uncertainty over Brexit and to the need for moves towards a more resilient, adaptive and sustainable business model.
Up to now, the UK insurance industry has been protected from serious disruption due to its ageing demographic, staid, predictable and, historically, largely unchanged products. Admittedly, accumulated expertise in underwriting and navigation of regulatory obligations has made life less complicated. But it isn’t hard to imagine the insurance industry as relying (alongside energy and utility companies) as much on customer inertia as on brand recognition and high-quality, responsive service. The “disruption” word has positive connotations in this industry, as it has meant a need to adapt as new entrants to the market drive more competition. So, what’s provoked this minor revolution?
Capturing and exploiting big data
The rapid growth of digital technologies has challenged existing underwriting models and opened up new opportunities for distribution. Technology is also having a major disruptive impact on the operational side of the industry, such as automated processes, greater workforce productivity, new sources of data and the capacity to gain new insights from data-mining activities. As these transformations make their mark as new or transformative services are becoming feasible and new revenue streams open up.
The rise of the wraparound service platform
Those insurers with an eye on the main prize have twigged to the fact that those providers who offer services that add value to wrap around their coverage will be those best equipped to survive and thrive. Even industry titans like Generali and Allianz see this as a business growth area, combining as it does, assistance and technology in one handy ‘pack’.
The emergence of IoT will mean more and more connected devices and appliances, which provides scope for more protection (to offer peace of mind to the hack-able customer). A combination of SMART security technology and appropriate coverage is able to provide earlier alerts, making it possible to intervene before an incident occurs.
Digital integration with multiple services
The healthcare sector provides a good example of how the insurance industry can use digitalisation to integrate its services with other industries. Take a patient suffering from a serious but manageable health condition. Unless this person is carefully monitored, they might need to be admitted to a hospital for long periods at a time.
Connected technology alongside phone apps allows for monitoring symptoms and thus permits the health insurance provider to pick up on problems much sooner and send someone to the patient’s home before hospital admittance becomes necessary. Thus, the patient gets the treatment required and a claim is avoided.
Smaller means more agile
The buzzword here is ‘Insurtech’. It refers to the insurance start-ups whose aim is to embed themselves into customers’ lives. Companies like Anorak and Digital Insurance Group want to enhance the service range and, hence, customer satisfaction, by analysing available customer data. From open banking, for example, they can best evaluate gaps in coverage and recommend tailored products to respond to individual requirements. Smaller start-ups like Brolly are now in the beta stages of offering products like house insurance with innovative payment structures in a much more mobile-friendly way.