Think that insurance is a sleepy industry? Think again. In 2014, global insurance companies raced to out-innovate each other. They turned to new digital innovations to fend off threats from insurance start-ups like MetroMile and PolicyGenius and sorted out new ways to remain relevant as a host of well-known brands like Google and AT&T crept into realms historically owned by insurance firms. We noted this innovation urgency among European and North American insurance firms earlier this year.
In casting an eye forward, we predicted seven events that would change the insurance landscape in 2015. A major force informing all seven predictions is the fact that smart insurers are recognizing that in the need to generate more good ideas faster, they have to radically change how they develop and execute new thinking. That means that insurers need to short cut the industry’s traditional “we’ll build and control” culture and instead go into the market, spot a hot business technology start-up that brings a lot of what’s needed to create a minimum viable product, and partner with them. And the smartest of the smart insurers are employing two unique industry forces—a very regular flow of premiums and the dynamics of equity markets— to get even closer to the source of new ideas: By investing in them. In 2015, we’ll see more insurance venture capital startups form in the wake of similar VC business launches from insurers like American Family, AXA, MassMutual, and Transamerica.
Want to know more about what lies ahead for digital insurance professionals in 2015? Read all seven predictions in the report. Meanwhile, here’s a sample of two:
■ A continuing flow of venture capital will open up new categories for digital innovation. A regular stream of premiums and irregular claims has made the insurance industry an ideal limited partner for venture capital firms. But increasing needs to be connected, a grounding in and appetite for data, and digital’s relevance in myriad insurance contexts is moving insurance venture funding from the shadows to the spotlight. During 2014, American Family Insurance and MassMutual launched venture capital units, following the launch of Transamerica Ventures in 2013. With innovation prominent in business strategies, growing numbers of insurers are seeking to fund interesting start-ups like Censio, Structure, and Verdeva that promise to provide benefits to members and policyholders, transform the business of their parents, and keep their firms from stagnating.
■ Digital portfolios will expand to protect digital customers in new ways. Insurance firms are turning to digital technologies to increase their engagement with and relevance to their customers. Savvy eBusiness teams are shifting from being about claim settlement to being the firm that protects a multitude of assets in the customer’s life, from cars and homes to identity and online reputation. They’re also recognizing that such protection might not be a traditional underwritten insurance policy but rather a profitable service. As an example US insurer MetLife partnered with a third-party to launch a consumer digital protection service, MetLife Defender, that covers personal, financial, and health data as well as online child safety services.
We are also making calls on what to expect in 2015 regarding insurance digital leadership, customer experience, acquisition targets and how connected life will influence how insurers win and retain business.
Want to learn more about what 2015 will hold for insurance leadership and digital teams? Download the full report or contact us. So, what do you think will happen in the business of insurance in 2015? Let us know!