Crafting a seamless, digital experience has become the primary focus of insurance companies to deliver the personalized, modern CX that consumers expect. In a recent survey of insurance CEOs conducted by KPMG, 85% said that the pandemic accelerated their digitization initiatives, with 78% saying that the crisis intensified their focus on crafting a “seamless digital consumer experience.”15
With so many consumers increasing their use of digital technologies for working, learning and shopping, the baseline of what is an ideal digital experience has risen to unprecedented levels.
This means keeping up with the new era of digital consumer expectations, but how?
This is where “open insurance” solutions come into play. In its simplest form, insurers leverage open application programming interfaces, or APIs, to share and access data and services with third parties that house rich data points that allow insurers to better assess risk exposures for their products. Since open insurance grants consumers “ownership” of their own data, it lets them specify which businesses can use their information and for what purpose, usually for their benefit to receive personalized experiences.
This accurate diagnosis benefits both sides of the insurer-insured relationship. Consumers benefit by receiving customized insurance solutions and tailored pricing as a policyholder. Insurers enjoy new revenue opportunities and products, improved time to market and a shortened consumer journey. Ultimately, consumers can enjoy these better-priced insurance products quicker than before and experience an enhanced overall CX.
Once you have capitalized on the rich data derived from open insurance, the next step is to collaborate with a network of companies to create a beneficial ecosystem such as an interconnected set of services in a single integrated experience. This means the ability to embed insurance products in a seamless consumer journey.
According to analyst firm Celent, ecosystem transformation is a top priority for insurance providers, and they expect an increase in spending on technologies related to consumer experience.16 For example, insurers are collaborating with health and wellness providers in the digital health market to help consumers improve their health and provide financial protection for themselves and their families. This can lead to lowered risk when buying a life policy and encourages a positive lifestyle and consumer engagement throughout the policy lifecycle.
How ecosystems create incremental value17:
Service fees from additional services linked to coverage:
- Upselling and cross-selling to expand share of wallet
- New consumer base growth
- Higher consumer retention and loyalty
- New business acquisition cost reduction
- Loss ratio and claims reduction through increased prevention activities and proactive risk management (i.e., healthy lifestyle incentives and worker safety initiatives)
- Improved pricing based on smarter individual risk assessment, enabled by AI models
15 - KPMG, “The COVID-19 catalyst: Insurers race to digitize,” kpmg.com.
16 - Accenture, “How ecosystems transform the insurance customer experience,” accenture.com.
17 - EY, “Global insurance outlook report,” ey.com.