Insurance Success: Achieving Customer Excellence with Value-Added Services

Sören Timm ,  Co-Founder, etvas GmbHSören Timm , Co-Founder,etvas GmbH

The insurance industry has been under pressure in the past couple of years. Given the success and increasing ubiquity of technology, companies are compelled to revamp their strategy to keep up with the challenges lying ahead. Compliance, regulatory, and legal functions are pushing the insurance industry to do more with less, without compromising on value. On a global level, regulators are mostly concerned with ensuring data privacy protection.

Technology has proven its ability to completely reframe insurance as we know it. Access to massive data amounts from telematics, wearables, and additional smart devices are widely used to alter business decisions. Change is inevitable, and for insurers to grow their customer base, collaborating with FinTechs and InsurTechs will enable them to preserve a competitive advantage.

Insurance 2.0: InsurTechs to the rescue

Insurance companies are well-aware that the FinTech revolution is here to stay. According to a PwC study, 74% of insurers acknowledge that innovation is challenging their business. While 43% claim they’ve already implemented at least one form of FinTech solution into their corporate strategy, only 28% have sealed partnerships with a FinTech company.

The end goal of an InsurTech is not to compete with traditional insurers but to collaborate, offering them innovative digital solutions to help preserve a competitive advantage. InsurTechs alone can’t get new customers in a world dominated by strict rules and regulations, as well as big industry players like Allianz, AXA, ING, MetLife, and others. As digital transformation picks up speed, insurers are realizing that digitalization cannot be overlooked. Allianz’s Digital Accelerator and Digital Labs are living proof that InsurTech is the answer to revamping a product-led industry.

Untangling the digitalization journey

Online claims management and online insurance distribution - two of the most important milestones in the history of insurance - came to the rescue in the hopes of digitizing processes and streamlining operations. However, online insurance distributors act as intermediaries. They don’t own the customer, they merely bridge the gap between claim handling and a customer’s connection with the insurance company.

Customer-centricity: the key to becoming a “life coach” for the insured

Big insurance companies don't have an income issue; they have a cost issue. They could make much more money should they choose to pay closer attention to the needs of their customers. Just like in banking, their focus used to be on the product and the risk and not on the customer. As a consequence, they developed a product-led technology whose purpose was to act as an “emergency manager” when something happened.
A notable paradigm shift started when big data analytics and AI entered the scene to put pressure on incumbent insurance companies, compelling them to rework every aspect of their business model. The future of insurance is inevitably linked to digital, seamless delivery ruled by powerful analytics. Rather than be useful in emergency situations, InsurTechs are more like eye-openers for insurers eager to digitize and become customer-centric.

Value-added services: It’s time to build long lasting relationships

Value-added services are mainly triggered by changes in supply and demand. On the demand side, insurers need to become more customer-centric with their products and services. Customers are now more demanding than ever; they’re the ones defining the value. Due to digitalization, they have expectations and companies are compelled to interact more, meet them fast and at the most competitive rates.

On the supply side, advanced analytics and connected technologies make it possible for insurers to drive accurate insights and build a long lasting relationship with customers. Via wearables, home sensors, fitness bands they can gather data in real-time on risk exposure. This way, insurers can provide value-added services throughout the customer lifecycle and not only when the customer has an emergency.

The risk of changing insurers because of a lower price package will eventually decrease. If an insurer is capable of providing added value and hence build more touchpoints, customers will look beyond cost. This is where ETVAS comes in.

ETVAS for insurance

Today, every single insurer must go through the same process to offer end-customers value-added services. The time an insurance company must spend today on search, legal contract negotiation and integration of extra-services is often up to 18 months. With our digital marketplace for Value-Added Services, there is only the choice of the right services and a go-live is done 10x faster. The outcome of using the ETVAS marketplace:

- Easy transition from emergency manager to life coach for better customer acquisition and retention. Activate online in minutes relevant services for your end customers from our service catalog. Enhance your offer every week as new services and providers become available.

- Revenue and margins up! Offering extra-services at the right time, place and price helps you monetize your customer base.

- Costs down! In a fragmented market, sourcing value-added services take time and money. Technically, integration is challenging & expensive. ETVAS is an umbrella marketplace where all services are readily available in one place. Get started in days, instead of months or years.

- Customer experience for the end-user is greatly simplified with a single login and one payment for all service providers. Either by using the white-labeled mobile-first portal or our APIs and SDKs to give your end customers access to a world of services via your online members area with just a few clicks.

Final thoughts

Most insurance packages offered by the top market players are comparable. In general, customers go with the cheapest offering because there’s no one to convince them otherwise. They choose, they pay, and they wait for something urgent to happen to file a claim. The lack of service personalization and customization in insurance has led to a competition on price with downward price spiral, expected to speed up with Digital Giants entering the scene. While InsurTechs can’t work alone (due to the strict regulations), legacy insurers can’t afford to ignore them (because they hold the tech to help them thrive).
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