Page 24 - Insurance Times March 2022

Taking the example in case of an Auto or Life insurer for policy lacking the understanding of comprehensive needs; or,
acquisition or policy servicing, gamification can be used to if they do understand the customer, they fail to integrate
guide the customer in their buying process for comparison these insights into the product development process.
where they the customers can rate their risk on a scale based
Y Overloaded Portfolio: Nowadays many insurers are
on their need analysis and through this process, the customer
focusing on low priority initiatives to clog their innovation
can be given options on the products suitable for them which and development pipeline, straining company resources
can help improve customer experience and brand awareness.
and blocking the progress of worthy ideas. Some
products are developed despite a lack of impact and
business value.
Y Market Risks: Very few insurers test product innovation
during development, exposing themselves to the risk of
failing to understand market realities. Sandbox testing
has created a major impact.
Y Technological Risks: At many insurers, outdated legacy
systems inhibit innovation. They are focused over
traditional methods which are out of market. Even after
products are developed, there is a failure to consider
Fig 3.1: Gamification use (Source: Pacific Life Re)
needed go-to-market capabilities and the likely response
of other partners in the ecosystem, as well as
competitors.
Y Inefficient Governance: Insurers get bogged down in
nonvalue-added activities and in waiting for decisions
that should be made quickly and easily. Poor governance
makes it hard to assign responsibility at various stages of
the innovation process.
Y Resource Constraints and Revenue Generation
Fig 3.1: Gamification use (Source: Pacific Life Re) Constraints: Some insurers have the wrong people
assigned to innovation and product development, while
Taking the example of Pacific Life Re, they have used others fail to cross-train people, making it difficult to
gamification for the policy buying process with a click to scale critical capabilities. Key resources can become
gather format. Essentially such data collection formats will overloaded, creating bottlenecks in the process.
take the customer around 30 seconds for each screen and
Y Culture and transparency: Not every company has the
within the 3 minutes, the customer will be able to purchase right incentives in place to encourage and reward
the product.
innovation. Employees are quick to determine which
behaviors and activities are rewarded and which are
Customer Engagement is crucial for the insurer as both brand
ignored, or worse.
awareness as well as the sales is directly impacted. Innovation
and investment in this is a definite need for an insurer to
increase their market share. Results and Discussion
The focus over innovation must be from the customer side.
Challenges Inhibiting Insurers The achievable target state would embrace a combination

Insurers who are seeking to accelerate the pace of product of many, if not all, of the friction-busting tactics. It will not be
innovation is facing many challenges including the difficulty a destination, but an ongoing journey. In the future paradigm,
of forecasting customer demand; the barriers posed by insurers could deliver:
regulatory compliance; and the need to set prices at the
right levels. The challenges faced by insurers are: The techniques of Seamless distribution can be done by
Y Unable to identify Customer Needs: Many insurers are aligning with adjacent industries to help stream alternative

24 The Insurance Times, March 2022