What’s stopping Insurance product innovation?

As Insurers continue to push their digital agendas and consumers demand more personalised engagement and compelling relevant products, two important questions come to mind

  • To what extent do Insurers actually adopt different approaches to different channels and;
  • To what extent do Insurers look at designing their products and propositions for the world in which their customer base lives, thus increasing their opportunity of attracting and maintaining more customers?

We went to the industry to understand its ambition in this regard and also to determine what currently is being done to tangibly to address these questions. Our initial results showed a very positive indication with 80% of Insurance professionals claiming at least some of their budgets would be allocated to innovation.

Interestingly however, in worrying contrast, we also found that only 43% believe that the industry will see a wave of innovative products.  We have seen the likes of Admiral and AVIVA in the UK, and Progressive in Australia introduce successful ‘multi-car’ policies but why have we not seen this concept evolve into full ‘lifestyle’ products, such as ‘family’ policies, or other combinations covering multiple risks?  Surely this would improve underwriting margin as well as persistency?

78% of the respondents said  they would like to see more dynamic products but 76% of the surveyed group claimed that they struggle to get their products to market and certainly not as swiftly as they would like.

Our research reflects what the industry is going through, and much of it may be attributable to the platforms that are currently employed.  It’s as if Insurers want to enter the world of Formula 1 but only have a Ford Escort, with some small modifications to help them race. Yet, the fast paced world is now becoming the expected norm by today’s digital savvy consumers.

An overarching concept supported by the research is that the Insurance  industry would like to move forward, but cannot currently due to  existing technology bases; which in turn is leading to an acceptance of not innovating through product, and ultimately not delivering personalised channels.

To evolve for today’s world, Insurers need to break this vicious cycle  or face leaving themselves open to disruption from new entrants , startups, and affinity providers who have bypassed the legacy and adopted new distribution platforms that deliver dynamic products, agility, and personalised customer channel experiences.

Target Group provides software solutions, such as IF Channel, a next generation digital distribution and sales platform, delivering dynamic products, rating and personalised channels across web, call centre, mobile and tablet. Focusing on the relationship between channel and product, and personalised channel experiences throughout the customer journey, it enables unparalleled distribution flexibility and scalability.