Getting Ready for Digital Disruption in Insurance
Getting Ready for Digital Disruption in Insurance by Maurice Collins
We’ve talked a lot about how every company needs to reinvent itself as a software company in order to survive and thrive in today’s digital world. Why? Because nearly every day, innovative software companies are entering and disrupting established industries. We’ve seen Uber disrupt taxis, Airbnb disrupt hotels, and Simple disrupt banks, among many others.
Now it’s time to get ready for digital disruption in insurance. And the insurance industry’s disruptor is a formidable one: Google.
According to reports, Google is preparing to launch an auto insurance shopping site in the U.S. where consumers can buy policies. The site, Google Compare Auto Insurance Services, is already licensed to sell insurance in 26 states.
While many may be quick to dismiss another comparison shopping site, some insurance experts have recognized the profound implications. As Denise Garth writes on Insurance Networking News, this move “represents a major disruption by a recognized innovative giant who brings an outside-in approach to customer-driven engagement and empowerment. And it demands that insurers rethink, reimagine, and reinvent a technology-enabled future.”
Think about it: traditional insurers are now forced to compete with Google, a tech juggernaut known for innovation, its ability to release new services rapidly and adapt them constantly, and its willingness to test new ideas and fail fast. Does this sound like the insurance industry we all know? Certainly not, but it’s the new reality insurers must face—or perish.
Consumers Expect Insurers to Provide Digital Services and Interactions
A recent Accenture study found that 67% of consumers are interested in receiving insurance offers via mobile devices and that they prefer digital interactions in almost every situation, including receiving advice or updating personal data. Moreover, almost half find it frustrating when an insurer is not using the information it already has about them across all channels. And 80% of consumers are prepared to switch for a more personalized service.
In order to meet the needs of today’s digital consumer, traditional insurers must make application development a core competitive advantage that helps support new business models, drive greater customer engagement, and streamline processes. After all, they’re no longer competing only with each other but fast-moving digital natives like Google, which has mastered the art of analyzing vast amounts of consumer data in real time to learn and adapt.
Make Digital Engagement a Reality with Rapid Application Development
This puts enormous pressure on IT to build more apps for the business, to do so faster than ever, and to adapt constantly changing business and market needs. With traditional development approaches unable to keep pace with growing demand, many insurers are turning to rapid application development in the cloud. These cloud platforms enable a new breed of rapid developer to slash project timelines from years or months to weeks or even days so that insurers can innovate and compete with apps.
A great example of an insurer embracing rapid application development is Liverpool Victoria (LV=), which has been able to quickly create high-value applications that streamline broker interactions and support the development of innovative new insurance products. According to Rod Willmott, Fast Track Director at LV=, “We’re now at a stage we can launch a new application product, an insurance product, with 6 weeks of development effort. That was unheard of.”
Google’s entry into the insurance market is a clear signal that the race is on to bring new apps and digital services to market.