Two trends helping to usher in major transformation in the insurance arena focus on making the industry and products more customer-centric and user-friendly. Value-based models assess a person on the basis of their habits and usage, not just their static demographics, while insuretech employs AI and IoT devices to be more in-sync with today’s digitally-savvy customer. By utilizing this omnichannel approach to understand how their customers really act on the road and in their homes (instead of who they are and where they live), companies are able to create much more accurate quotes and policies, as well as build lasting relationships and trust with their customers.
As with most industries, incumbents and traditional players will need to pay close attention to these trends in order to stay competitive. At frog, we’ve long played the role of innovation partner in the insurance space, helping to build human-centered relationships between brand and consumer. Recently, frog worked with AXA to deliver myAXA: a digital app that provides a more conversational interaction between policyholders and the multinational insurance giant. AXA’s Italian region worked with frog to create a seamless user experience that assists customers through otherwise stressful tasks, such as filing a claim post-accident or securing roadside assistance. The resulting digital platform offers a new kind of insurance experience that makes it easy for users to tell AXA exactly what’s wrong and quickly get the help they need, avoiding the usual headaches caused by pain points along the customer journey.
Nationwide Insurance has also taken note of these trends, first with its recent investment in Silicon Valley startup Scotora, part of a string of insuretech-based fundings, as an effort to help its consumers live comfortably in retirement and meet financial needs in novel, digital ways. Scotora has overhauled the entire claims process, including underwriting, policy administration, reporting and billing. Nationwide believes its investment is a step towards the startup fleshing out a “digital chassis” that can help the 90-plus-year-old company build tomorrow’s insurance products.
The major industry player has also invested in telematics for its auto insurance offerings, which has helped it stray from the ‘one-size-fits-all’ approach that it and many rivals have previously relied on. In February 2019, Nationwide launched SmartMiles, an evolution of its telematics-driven SmartRide plan. Using a similar device, Smartmiles is said to give low-mileage drivers more control over what their premium looks like. In this model, drivers only pay for the miles they drive, making it especially attractive to those who carpool, use public transit or live near their workplace. This shift from demographics to value is perfect for customers who find themselves bouncing between multiple forms of transportation on a daily basis.
Another company making waves with an omnichannel approach is Root car insurance. Their intuitive digital product allows potential customers to take a two- to three-week “test drive,” during which their driving habits are monitored with AI. Knowing their policy is based on their actions—not just the make and model of their car—assures customers that their good driving habits will be rewarded with lower rates. It’s a proposition that’s helped the tech start up quickly attain unicorn status, with a $1 billion valuation in 2018. However, there are privacy concerns to contend with when collecting large amounts of data on customers.
The key is designing not only for ease of use and lowest rates, but also for trust. With our vast experience across diverse industries such as retail, financial services, healthcare and mobility, frog is perfectly poised to meet these challenges head-on in order to design the next generation of insurance products that will propel the industry into the future, while also creating real value for customers.