Insurance companies have been handed a golden opportunity to deliver greater product innovation to their customers. The convergence of cloud computing, mobile technology, big data/analytics and other factors has made it possible for firms to create and launch new digital offerings to customers who are eager to purchase these products.
The problem is, most insurers are not taking advantage of this opportunity. Research by Target Group indicates that three quarters of insurance marketing professionals think their company is too slow in delivering new products or services to market and struggles to keep up with constantly shifting consumer demands.
A huge majority of the survey respondents (nearly 80%) think their insurance products should be more dynamic at adapting to changing consumer behavior. And as the report states, “there is a very real need to develop products that are dynamic and effectively harness the wealth of data now at an insurer’s disposal to secure a competitive advantage and meet customer demands.”
Rigid Policy Administration Systems are Stifling Product Innovation
One of the biggest hurdles to becoming a digital insurer that’s capable of creating innovative products is existing policy administration systems. Because they’re rigid and built only for managing standard insurance products, these systems aren’t equipped to manage increasingly targeted offerings and their underlying business processes.
What many insurers find is that customizing their policy administration systems ultimately takes too long and costs too much, creating a prohibitive environment in which to test and innovate. Consequently, many firms continue to operate in a slow, stodgy manner that in no way reflects today’s fast-paced competitive environment. New projects and product launches are delayed or in many cases, never even get off the ground. Great ideas never see the light of day.
How can insurance companies get past this hurdle? By adjusting the corporate culture and bringing IT and the business together to put product innovation projects on the fast track. It requires thinking and acting like a sleek, online company that understands the need to deliver innovative, digital products and services to the market quickly.
This shift in thinking requires effort on the part of senior executives, product management teams and the IT department that supports many of these new digital products. But the reward is worth the effort. The faster companies create, test and launch new offerings into the market, the quicker insurers, brokers and customers can reap the benefits.