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From B2B & B2C to B2B2C
The document discusses the evolving landscape of the insurance industry, focusing on the shift from traditional to digital distribution models influenced by insurtech and alternative distribution channels. It highlights the importance of understanding different customer segments, such as B2B, B2C, and B2B2C, and the role of digital tools in enhancing customer experience and optimizing sales processes. Furthermore, it emphasizes that partnerships, customer-centricity, and the incorporation of technology are crucial for future success in the insurance market.
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From B2B & B2C to B2B2C
- 1. | INSURANCE –Knowing Your Insurance Customer INSURANCE Knowing Your Insurance Customer
- 2. | INSURANCE –Knowing Your Insurance Customer| INSURANCE – Knowing Your Insurance Customer Eduardo Romano Director| everis @ in Eduardo.manuel.romano@everis.com /eduardoromano/ https://www.outsystems.com/blog/posts/low-code-digital- transformation-insurance/ 2 Blog
- 3. | INSURANCE –Knowing Your Insurance Customer| INSURANCE – Knowing Your Insurance Customer From B2B & B2C to B2B2C Changes to the nature of the business 3
- 4. | INSURANCE –Knowing Your Insurance Customer B2B The agent is the customer to the insurance company B2C Expensive distribution costs on attracting customers to online platforms Policy holder Insurance agent / broker Insurance company Insurance company 4
- 5. | INSURANCE –Knowing Your Insurance Customer Bank Policy holder Non-insurance company (Car manufacturers, car dealers, utility providers, telecom companies, retailers, digital players,…) Bancassurance has been a successful model for many years, and other non- insurance players already distribute insurance in several markets Alternative distribution channels are focused on selling annex insurance products as supplements to core products Insurance company Insurance company B2B2C 5
- 6. | INSURANCE –Knowing Your Insurance Customer Affinity / Peer-to-peer organization (Employers, franchises, professional organizations, trade groups, associations,…) B2B2C Aggregator Affinity and peer-to-peer groups have access to a pool of potential customers of a less risky demographics Aggregators allow consumers to easily compare product features, carriers, coverage and price Insurance company Insurance company Insurance company Insurance company Policy holder 6
- 7. | INSURANCE –Knowing Your Insurance Customer| INSURANCE – Knowing Your Insurance Customer Distribution Physical to Digital 7
- 8. | INSURANCE –Knowing Your Insurance Customer Distribution channel evolution by region (in %) Source: 2019 Mckinsey Global Insurance Pools trends and forecasts: Distribution Physical channels still dominate despite the shift to a digitally- enabled omnichannel distribution model (insurance company branches and agent/broker branches) As the distribution landscape becomes more technology- enabled, InsurTech players, digitally enabled insurance channels and aggregators will assume a larger role. 10 12 8 11 50 49 32 28 2012 2016 USA 5 5 53 58 20 16 23 21 2012 2016 EMEA 7 9 58 59 35 32 2012 2016 USA 10 11 8 9 25 25 56 55 2012 2016 EMEA Tied agents and branches Brokers Bancassurance Direct and other 8 LIFELIFEP&C
- 9. | INSURANCE –Knowing Your Insurance Customer Finding the right role in a new ecosystemCapitalize on Human and Digital Blockchain, IoT and AI are expected to revolutionize the industry The majority of the customers still values meeting with an agent before buying life insurance Modernize Non-life insurance for commercial lines, which is a challenging to digitalize line Work in partnership with car manufacturers, technology providers and other affinity groups Insurers need to rethink the roles they expect their physical channels to play. Affinity and peer-to-peer groups may play an important role in the insurance market, particularly in niche segments. Customers InsurTechs Partners Personal Lines Commercial Lines Affinity Groups Bancassurance P2P platforms Aggregators Digital First Insurers 9
- 10. | INSURANCE –Knowing Your Insurance Customer Physical channels are being refocused to the stages of the sales process where they can add the greatest value. By making use of digital and remote contact channels, to provide customers the best interaction possible Improve Customer Experience Of insurance products to expand their portfolio, extend their sales year and improve client relationships Increase Cross-Selling Making use of data analytics, enabling prospects to be steered to the channel that best suits their needs Target New Customer Segments By training agents to provide complex advice and sell products that are more difficult to sell through direct channels Sell more Profitable Products 10
- 11. | INSURANCE –Knowing Your Insurance Customer Statistics show that brokers and agents remain important, but direct and other online channels are gaining relevance in the insurance market. Source: 1. Best’s Special Report: Insurers Warming to Direct-To-Consumer Investments to Improve Distribution, Customer Experiences (A.M. Best) 2. Mckinsey (December 2018): “Friends or foes: The rise of European aggregators and their impact on traditional insurers” 3. NTTData/everis Insurtech Global Outlook 2019 Of the surveyed insurers is considering to implement a direct-to-customer distribution channel. (1) Billion of global insurance tech investment reached in 2018. (3) Share of total revenue for Dutch aggregators comes from insurance products, in line with other European countries. (2) 40% 80% $4,2 11
- 12. | INSURANCE –Knowing Your Insurance Customer InsurTech Tech giants showing interest in entering the insurance industry. 45 investments made by top 25 Non-Life insurance companies (2016-2017). (3) There are contrasts between the European landscape and the US market regarding the emergence of disruptive distribution channels. Source: 1. Mordor Intelligence - Europe online insurance market - growth, trends and forecast (2019-2024) 2. Mckinsey (December 2018): “Friends or foes: The rise of European aggregators and their impact on traditional insurers” 3. CB Insights 4. FinTech Futures: European insurtech trends: shift from disruptive to enabling insurtech Sector dominated by direct players. Different regulations, agents, and brands per state. Insurers invested heavily in their own brands. Aggregators 12 267% growth in investments (2016-2017). (3) $5,5 billion and $15,3 billion – two major acquisitions in 2018. (4) 75% of the total revenue respects insurance products. (1) 1/3 of market share. (2) ~50% of online insurance sales (2018). (2) EUROPEUSAUSA
- 13. | INSURANCE –Knowing Your Insurance Customer| INSURANCE – Knowing Your Insurance Customer The Future 13
- 14. | INSURANCE –Knowing Your Insurance Customer BUSINESS AND DISTRIBUTION MODELS Set flexible business and distribution models, moving beyond a succession of pilots and making use of the technology available PARTNERSHIPS Clearly define the desired position in the ecosystem, cooperation models and choose the right partners CUSTOMER CENTRICTY Customer centricity and innovation must be the cornerstones of the distribution strategy REFOCUS AGENTS AND BROKERS Refocus agents and brokers so they can add-value performing tasks like deepening customer relationship or sell more complex products SIMPLE ACCESS AND TRANSACTIONS Turning each interaction with the client a frictionless experience is key for the future success of insurance carriers The Transformation is imperative and relies in five key issues 14
- 15. | INSURANCE –Knowing Your Insurance Customer Low-code let’s teams produce more value… quicker TIME-TO-MARKET Make the software development many times faster than traditional methods AGILITY Increase of agility in the functionalities and codes IMPROVEMENTS Improvements in the richness of the users interface and the customer experience MOBILITY Connect the disparate groups so that everyone can work together on a single platform and towards similar goals 15
- 16. | INSURANCE –Knowing Your Insurance Customer| INSURANCE – Knowing Your Insurance Customer Benchmark 16
- 17. | INSURANCE –Knowing Your Insurance Customer B2C 17 B2B
- 18. | INSURANCE –Knowing Your Insurance Customer MoneySuperMarket offers a fast comparison between a wide range of insurance products. Additionally, they offer promotions and tailored advices for saving money when purchasing an insurance product Besides comparing a variety of insurance products from different insurers, independer offers the customer the option to buy the insurance directly from the website or to be redirected to the insurer’s website Compare.com aims to transform the insurance purchase process into a regular shopping tour. Partnering with over 60 American car insurance companies, it allows customers to choose the insurer by state CoverHound offers accurate rates and a curated list of best options for both personal and commercial insurance lines. Furthermore, it offers businesses a lead-generating partnership deal, with benefits for both sides Aggregators 18
- 19. | INSURANCE –Knowing Your Insurance Customer Gallagher Affinity offers a full array of distinctive benefits including financial, insurance, travel and discounted services and products to affinity associations’ members or customers The American Legion works in partnership with GEICO to offer insurance discounts for Military (Active, Reserves, Guard Members), Retirees, Veterans and Dependents IEEE members can take advantage of exclusive and discounted pricing on insurance and a variety of products and services. As an example, IEEE members in India may enroll in a Medical insurance plan supported by IEEE. CAUT’s partnership with Johnson Insurance offers competitive rates for home and auto insurance and plan benefits to CAUT’s members and employees. Affinity 19
- 20. | INSURANCE –Knowing Your Insurance Customer Thank You! /eduardoromano/ @ in Eduardo.romano@everis.com