Disruption. The insurance industry has been knocked around and placed under increasing pressure to reimagine its future. The marketplace has changed – healthcare exchanges are a commonplace and non-traditional, digitally-centric competitors are swooping in to attain all unclaimed and/or underappreciated marketshare. The insurer that can deliver a product and service that consumers want will win.
As we advance into 2016, these three trends offer opportunities to ‘Uber’ize the industry:
#1 Let’s Talk “Friendsurance”
The industry has neglected the next generation of buyers – the millennials. This year, the millennials became the largest generational group in the U.S. workforce, with more than 75 million living, breathing, insurance-needing members. This year, the millennials became the largest generational group in the U.S. workforce, with more than 75 million living, breathing, insurance-needing members. The millennials have an entirely different context for what influences their choices. While these new customers are not as affluent as your tenured ones, they’re spending like no one else.
Look no further than Uber, Amazon Prime, AirBNB, Trip Advisor, Google and Facebook, to understand the forces that have shaped this generation. Millennials don’t anticipate their lives to be as prosperous and linear as their parents’ and that’s helping to spur the evolution of the sharing economy. Think of the hospitality industry, where AirBNB has more rooms than any other chain without owning a single property. Think about the financial services space, where micro-financing and crowdfunding are providing access to capital in a way traditional sources never did. And think of transportation and autos, where car sharing in big cities has become a regular way to get around.
What if a peer-to-peer insurance model was devised under which friends and family could pool the their risk and source products from non-traditional sources?
#2 Traverse the Data Divide
‘Big Data’ just keeps getting bigger and bigger. The insurance industry can’t escape the challenges posed by big data such as how to analyze, capture, curate and protect consumer information. Yet, some are taking full advantage of this deluge of data and building the most sophisticated predictive models ever built. The pressure to succeed with big data has created a huge divide – those that find ways to harness it all and those that don’t.
What if Google decided to flex its muscle (again) and turn its vast knowledge of societal trends, personal and geo-specific data to create products that can predict livelihood better than traditional underwriting can?
#3 Exchanges as the New Norm
The web’s been the great enabler of exchange-centered business models that search, find, match, share and recommend tailored products and services. Consumer exchanges have had a profound impact on health insurance (both good and bad). B2B exchanges, for example, have changed the procurement function forever. Creating transparency and giving customers what they want, where and when they want it is the winning solution.
What if there was a LendingTree-style business model for life insurance?
Prophet is expert in bringing new thinking to legacy problems in the Insurance industry. Our work with clients such as American Family Insurance, United Healthcare and Zurich highlights how we anticipate trends like these, develop innovative solutions and build strong value propositions that change how you go to market.