Effective customer relationship management (CRM) is key to successful business, especially when it comes to smaller insurance carriers where the focus is on the client relationship. No matter the carrier size, speed, efficiency and effective delivery are the keys to running a successful insurance business. However, in reality, the smaller insurance carriers are falling behind on the efficiency and speed spectrum, and the innovative digital and larger insurance carriers who employ the latest tools and techniques, ranging from utilizing new data sources, robotic process automation (RPA), advanced data analytics such as machine learning and cognitive computing, to IoT (Internet of Things), are gaining market share.
These tools and techniques are increasing the digital and larger carrier’s speed, underwriting prowess and efficiency. For instance, in one area alone, their speed in delivery of quotes (whether Personal or Commercial Lines) can be real-time and they allow binding and paying online. Although small and mid-sized traditional insurance carriers are still in existence, to stay market relevant, and increase their growth and profitability, they need to partner with new start-ups also known as Insurtechs and firms providing technological infrastructure to insurance firms. Here are three reasons why this is necessary:
Insurtechs have a natural competitive edge over traditional insurance carriers, because of their lack of legacy systems and typically narrow focus. This leads to a much quicker service delivery model. What customers have expected traditional insurance carriers to deliver in weeks; Insurtechs are now delivering in minutes or hours. So, in order to reduce the efficiency gap in service delivery models, insurance carriers can partner with Insurtech startups to yield innovation and overall total efficiency.
- Internal Efficiency
Legacy insurance carriers are slow in execution because the internal processes are slow, i.e. the long cycle between brokers, carriers, underwriters and customers, and lack of digitization of customers’ requirements or customer files. If all the file work is still actually on paper and not digital or in the cloud, then it means searching for and acting on information does not take seconds but takes minutes or even hours. Thus, in this scenario the larger and more digitized carriers win again. The small and mid-sized insurance carriers can overcome this gap by strategically partnering with Insurtechs in a very cost-effective manner.
- Effective and Improved Service Delivery
To compete with Insurtech and key insurance players in the industry, the smaller insurance carriers need to have an effective service delivery model, which reduces the dependence on long communication channels, and is completely customer oriented. In order to do that, and to compete with digitized larger carriers and Insurtech startups, traditional smaller carriers need to show a willingness to adapt and innovate.
Insurance service delivery models are changing, and to deliver per the changing environment, smaller insurance carriers need to start by identifying and then partnering with start-ups who are providing services to help insurance carriers adapt and work on improving their service delivery model.
Small and medium sized insurance companies should start to track investments and advances that are emerging within the Insurtech community and consider partnering with Insurtechs. Partnering with Insurtechs and other digital service providers will enable these carriers to transition from a traditional service delivery model to an innovative customer-centric and technologically enabled model. Partnering with Insurtechs will not only jump-start the carriers’ digital transformation but will prove to be a mutually beneficial alliance for both sides — the carrier will benefit from new techniques and digital infrastructure such as cloud based services in a very cost efficient manner thus improving their speed to market, while the Insurtech will benefit from the carriers’ legacy customer base and industry knowledge which will ultimately improve profitability/Return-on Investment for both partners.
Insurtech Advisors helps connect small and mid-sized insurance carriers to the advances occurring in the Insurtech space. We do this by working individually with each member carrier to help them understand how to innovate and implement some of these external advances into their current processes in a cost and resource efficient way. Additionally, we strategically invest in early stage Insurtech startups, where their offerings can benefit our member insurance carriers. For more information, please contact us at: firstname.lastname@example.org or +1.929.282.2031