The past two years has evidenced how quickly things can change: the way we work, live and shop have all been significantly affected by Covid-19.
Financial services, too, has undergone change in the way it operates, with a heightened use of and reliance on technology to help clients meet their personal financial goals.
But there have also been challenges, as Oliver Werneyer, chief executive and co-founder of Imburse, says.
He believes insurance still needs to go through a sea-change, and use technology better to achieve it, if it is going to win over tomorrow's consumers.
He speaks with FTAdviser In Focus about what needs to change to meet the clients' ever-changing protection needs in 2022 and beyond.
FTAdviser: Why does the way in which insurance is packaged need to change?
Oliver Werneyer: Insurance plays a critical role in making people and companies more resilient in the face of disasters. Therefore, it is of great importance and social value for people to be properly insured and have a positive relationship with insurance.
Traditionally, most insurance products are considered sold, not bought, and to a large extent, this is due to their complex nature.
Personalising an insurance product is as much about giving the customer peace of mind, as it is about closing a knowledge gap for them.In order to make sure people are adequately insured and want to be insured, the product offerings need to keep up with the times.
The very core of insurance products, as concepts, don’t really change but the way customers consume or access these needs to be modernised.
Customers are looking for more immediate value and services beyond a simple insurance product. The way insurance is packaged needs to change in order for insurers to stay relevant to customers, maintain their interest and have access to their disposable income.
FTA: Is this demand being driven by consumers or market pressures?
OW: Absolutely the consumer. The demand is very clearly being driven by customers’ expectations, which they get from other services they consume.
Regardless of whether it is in shopping, travel, media consumption or banking, customers are receiving a significantly more personalised product and customer journey and it is just natural to then expect it from insurance engagements too.
FTA: Why do consumers want personalised insurance? What benefits can it bring to them?
OW: Consumers care very little about personalised insurance per se.
Consumers who want to buy insurance want to buy a product that covers their needs. Peoples’ needs are quite diverse and, in most situations, cannot be distilled down into one or two insurance products from a specific line of insurance business.
It needs to be more than just one product. The desire for a 'personalised' product is an extension of the simplistic view that the average customer has about risk.
They do not think in product lines or cover types, they think about themselves and their needs. Personalising an insurance product is as much about giving the customer peace of mind, as it is about closing a knowledge gap for them.
The benefit is a much greater degree of comfort with the purchase of the product (not always questioning why they bought it) and a broader understanding of the insurance’s role in their life.
FTA: Why are some insurers so slow to offer this? Is it just a question of technology or is it also a regulatory fear?
OW: Insurers are slow because they have two major challenges to overcome simultaneously in order to deliver more personalisation.
They need to upgrade the customer-facing elements of the organisation while enhancing and modernising the back-end systems.
Each of these sits in different parts of the business and finding alignment between these two parts in terms of prioritisation, delivery timelines and budget is incredibly slow.
It takes very long to get consensus and to prioritise projects that should be delivered, and it also takes long to deliver.
FTA: What changes can you envision technology driving in the insurance space over the next five years or so?
OW: A significant amount of legacy system modernisation, driven by technology and new business models, will have a profound effect on the insurers’ ability to deliver operational efficiency as well as new product and customer journey capabilities.
This revitalisation will also allow new market partnerships to be more easily implemented. Partnerships will pave the way for insurance offering, extending value and extracting services for their customers beyond just insurance.
Insurers can then deliver a more personalised and holistic solution to customers that manages their risk as well as pays out when things go wrong.
FTA: Will we ever get to the stage where brokers can sell a holistic wellness package that incorporates insurance, support services, counselling, GP access, etc?
OW: It is inevitable because broadly the market is moving to a more embedded solution model.
Even brokers should be welcoming the opportunity because this also opens new revenue streams and opportunities to create greater customer loyalty by providing more value.
simoney.kyriakou@ft.com
