Insurance Nexus – IOT is just a technology

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Connected Insurance Summit Europe - 11 - 12 June, 2018
Insurance Nexus organizes an event around connected insurance on June 11th in London and publishes a white paper to support it named “IOT is just a technology“.

Note: This article is written in the frame of a media partnership between my blog and Insurance Nexus in order to promote the event that will happen on June 11th and 12th in London: Connected insurance Summit Europe. Nevertheless, I’m not requested to write a good review of this report . Anyway, I think it is relevant for my audience, as were previous reports I relayed and that you can find here or here for instance.

Everybody knows the context of insurance today trying to figure out in all new technologies what can be the next big thing! However, some solutions (Vitality is one of them) have proven interesting results. Are there other options, other business models or other value propositions that can be interesting? This new report explores others options to make value out of IOT.

The business case for insurers as service providers

Traditional insurance is driven by a low customer engagement, but this is about to change. However, how can incumbents find new value propositions where all of them have the same strategy, products and distribution channels? In front of them, GAFA are providing new solutions.

The Zhong An example shows the creation of an ecosystem around the need of car-buying customers. All the requirements are not provided alone, but through plenty of entities that provide the car, the credit to pay it, the insurance, some telematics options, or UBI (usage-based-insurance).

The secret to attract new customers is to get out of price sensitivity and get transformed into a service provider. This means a deep mutation and a renewal of the revenue streams.

Beyond acquiring full-package customers, incumbents must face the retention of their legacy portfolio. While renewing contracts, customers may be offered a little more than just a renewal! Technology can then be a solution to differentiate. For instance, data can be analyzed to ensure the best claims experiences for the few cases a year, and focusing on a good service and offer for the masses to retain.

Build meaningful propositions with connected foundations

It is irrelevant to think about differentiation talking about customers segments. It is rather a question of a case by case basis, and thus, individualization of offers and products. Two main elements are needed:

  • Get access to individual data sources
  • Be ready to use them accordingly

The real challenge is to find value among that kind of data. Most of the time, it begins to bring value when one can find options of gamification or prevention.

Here is where IOT comes into the game with increased connectivity of our everyday life. Nevertheless, as Guerra Vilela from Ageas states, digital adoption in insurance is going as fast as we think: lot of noise, few actions! Besides, vehicle’s turnaround is about 10years. If we have to change the device in the car several times, the interest falls. This leads him to say that mobile phone should be the only one device to focus on.

Anyway, unless a not-that-straight journey, adoption is increasing, and what is an innovation today can become a standard in three years. Things move that fast we must remain careful of what could make sense tomorrow.

Making the most of today’s technology, today

Using new technologies is a challenge for insurers. For instance, the use of mobile is increasing. However, most are using facebook and emails, but no one use it for digital insurance. Then, the role of insurers is not to try to provide another brick of technology, but rather to use existing bricks, and adapt to existing situations.

Note: this point is really interesting and should be analysed more in detail.

Connectivity success means focusing on customer need

Really often, the main issue for insurers is trying to handle new technologies and their problems. The main focus must remain on solving customers problems! EVerything is about “relevance and giving the customer something that makes their protection relevant to them”.

After a car accident, main issue is not that the car is wreck. It is the lack of mobility and independance of our insured. Connectivity can help reduce delays between the accident and its resolution, but it must be used correctly.

This connectivy is a difficulty because roadside assistance is on its way before insurer is aware that there is an accident. What should then be roles and responsibilities of insurers and assisters.

One additionnal keypoint of using that connectivity is to ensure the customer gets some value out of it right before using it, to maximize adoption.

What does connected insurance+service look like?

Five points will make tomorrow’s models for insurance+service:

  • Usage of technology and platforms
  • Differentiation made by delivering benefits to the individual
  • Solving customers needs
  • Responsive
  • Close relation to insurance.

My opinion on IOT is just a technology

This white paper raises almost all topics around connectivity, IOT and insurance. Of course, it doesn’t go deeper in detail which could sometime be useful. However, it gives a good overview and “IOT is just a technology” a great appetizer for Connected Insurance event in June!

Insurance Nexus – IOT is just a technology

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