Page 20 - Insurance Times March 2022

The insurers who coagulate innovation in product of Big Data creates opportunities to insurance to make use
development tends to lead the market. Moreover, business of unprecedented insights into the end customer's life,
in a VUCA world where change is the only constant, is property, health, wealth and behavioral patterns using
transforming the business world because of economic, artificial intelligence.
political, technological, and environmental forces.
Therefore, constant and rigorous innovation is the only This allows insurers to swift through this data quickly and
way to secure and defend a competitive edge, which helps efficiently enabling more personalized approaches to risk
in realizing new revenue opportunities needed for management, reduce liabilities and lower premiums in return.
sustained profitable growth. The ability to access data faster than ever before also allows
insurers to the settle claims more quickly.
The new era of Insurance with digitalization should start
with innovation, which embodies multiple layers of In the past, a common strategy of insurance players was to
creativity, requiring an understanding of the heart and
wait for the competitor to move first in order to see whether
voice of the customers, which is an essential component a new direction was successful or not. But that strategy does
of insightful decision-making across business disciplines.
not work in this disruptive environment with new competitors
The best practices that help shape innovation activities outside insurance space. All these changes have given rise to
serve as a critical tool with respect to product development. new players with new ways of working and competitive
Speed, Adaptability, and Risk protection are the key areas business model. So, as Insurance can turn into a very different
expected by the customers in a digital world. The strategic market in the future; how can insurers navigate change and
and tactical plans articulated by management to pursue achieve success is the question.
competitive advantage, sustainable organic growth and
profitability is backed by clearly stated guidelines for In such environment, it is important to learn fast as
innovation and ensuring that not only profit is attained established players will find ways to be more versatile, it is
but customer satisfaction is also achieved because of the essential to think like a disrupter and act like a Startup while
innovation. Thus, insurers can attain attention of customers maintaining a clear focus on the customers.
of different industries towards their model of product.
In times of rapid change, it is hard to separate facts from
Introduction fiction. Whereas it is easy to learn by the latest trend and to
blindly copy, what the competition is doing. However,
Digital technology is transforming the end-to-end value chain.
following the market is not the answer; the most successful
Digital transformation is taking place throughout the entire companies across industries understand that they need to
industry value chain - from sales and distribution, to product build a strong distinctive identity that allows them to carve
development, underwriting and claims management. out their own market position rather than reacting to a
Insurance industry is undergoing a perfect storm; changing market that has been created by others.
customer demands, advancement in technology, increases
in data, the impact of natural disasters, shifting demographics Creating such a strong identity occurs only by adding value to
and evolving regulations are just some of the factors that your customers in the future, focusing on building the few
shake the roots of the industry. Customized insurance differentiating capabilities that will allow you to deliver that
products are released using technologies such as Internet of value better than anyone else. Once the capabilities that the
Things (IoT), artificial intelligence (AI) and big data. Car organization needs to excel is identified, then developing a
insurance products linked with individual driving habits and capability agenda to achieve that goal is the next step. It is
mileage through IoT devices have been unveiled. important to consider how quickly organization can build the
new capabilities and by when insurers need them to be
Customers want more from their insurers, be it, corporate advanced and integrated.
customers or consumers. They all now expect the speed and
elegance to digital retail conducting business with "when Nowadays, more focus is on "Building capabilities organically
they want, where they want" using channels of their choice. or acquiring them from a company or Partner with the
Customers are increasingly focused and able to compare technology players". Being very clear about these specific
offerings and prices with competitors in an instant. capabilities, allows insurers to align the entire organization
on what truly matters to the customers and build a powerful
Technology is creating a wealth of new possibilities; the advent engine of growth.

20 The Insurance Times, March 2022