New Research Reveals Which Insurance Industry Players are Best Positioned to be Leaders in the Future of Insurance
Successful reinvention of the business requires taking an outside-in approach that aligns to customer needs and expectations
Majesco, a global leader of cloud insurance software solutions for insurance business transformation, announced the release of a new research report, The Future of Insurance: Future Leaders Setting the Bar in Meeting New Customer Demands and Products in a Multi-Channel World.
Drawing on findings from four recent primary research studies on Consumers and SMBs (Insurance “Buyers”) and InsurTechs and Insurers (Insurance “Sellers”), the report provides unique insights on the alignments and gaps between Buyer expectations and Seller strategies, priorities and investments, revealing which types of Sellers are well positioned to create the future of insurance, and who will be left behind.“With customers as crucial arbiters of a company’s success, insurance players should aggressively invest in new products, services, business models and technologies that will enable them to align to customer needs and expectations, both today and in the future,” commented Denise Garth, SVP of Strategic Marketing, Industry Relations and Innovation at Majesco.
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“The future leaders of insurance are modernizing and optimizing their existing businesses to meet current customer needs, and create profitable operations that fund the design and build of their new, future business. They’re using cloud-based insurance platforms that enable rapid development of innovative new products, services and channels that can be tested and quickly scaled to deliver what their buyers demand. A two-speed strategy consisting of speed of operations and speed of innovation is crucial for future insurance leaders. Majesco is very focused on offering our core and next gen solutions to enable this two-speed strategy to offer both incumbent insurers and InsurTechs a path to the future of insurance,” continued Denise.
The report revealed numerous characteristics and practices that are shaping Sellers’ prospects for future market leadership, including:
- Sellers, both incumbent insurers and InsurTechs, are generally aligned with Buyers for today’s offerings, but significant gaps emerge for future products and business models with Buyers.
- InsurTechs’ outside-in and customer-first approach is highly aligned to Buyers – a winning strategy that all incumbent insurers must rapidly learn and adapt to.
- Incumbent insurer leaders reflect the adaptation, outpacing insurer followers and laggards who are increasingly being left behind.
- Future Buyers, millennials and Gen Z, overtake Gen X and Boomers within the next 7 years, emphasizing the risk of not shifting with future customers demands.
- Adding channels without a multi-channel strategy will likely backfire if Sellers are not aligned to Buyers’ expectations that they can work together seamlessly.
- Incumbent insurers have numerous blind spots around new sources of insurance, including the Tech Giants’ potential to enter the insurance market. This increases their risk of becoming irrelevant and uncompetitive in a new future of insurance.
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The report underscores that the rise of InsurTech four or five years ago attracted money, people and marketplace interest, giving InsurTechs an early advantage over incumbent insurers. The good news is that incumbent leaders are rapidly adapting. They have moved from simply knowing about the changes going affecting the industry, to acting on them by leveraging InsurTech strategies and approaches to keep pace or even lead.
But that is not the case for incumbent “followers” and insurance industry “laggards,” who are continuing to fall behind, creating a potentially insurmountable gap if they do not quickly change course.
With both AM Best and the NAIC recognizing the need to support operational optimization and innovation, insurers and InsurTechs need to be prepared to adapt and respond. They need to ask themselves, “What will it take to move from knowing to doing – and do it rapidly?” “How do we modernize and optimize the existing business while we create a new business model for the future?” These questions should be asked out of the realization of the urgency to create the future.