The Future of Insurance Belongs to Living Businesses

Emulating GAFA’s secrets to success: Insurers are looking beyond the industry for inspiration. Instead of being threatened by platform businesses, such as Google, Amazon, Facebook and Apple, living businesses seek to partner with them to reinforce their brand, reach new customer segments, and become part of a larger, more dynamic portfolio of platforms, products and services.

Small-ticket insurance and microinsurance: A growth opportunity for personal lines is the market for large-volume, small-premium, basic-benefit coverages. Insurtechs and traditional carriers are facilitating quick and easy purchasing, often using inventive online and mobile channels, for a wide range of niche products, from pet, travel and event cancellation insurance in mature markets to small-business and crop insurance in developing markets.

Value-added services projected to take off: Digital technologies like the Internet of Things are improving data quality and providing insights that enable insurers to offer more personalized services that customers value. The list of possibilities is infinite, ranging from healthcare alerts and new driver monitoring in personal lines to preventative maintenance and precision agriculture in commercial insurance.

Selling policies direct to middle-market customers: The majority of the 52 million American households that make up the middle market own no life insurance at all. Recent advances in digital technology make it easier for carriers to learn more about their customers, to develop simple offerings, and to customize them not only to different segments but individuals. They also allow them to clinch the sale at the moment of awareness, before the willingness to buy evaporates. This comprises a large share of the overall opportunity for improved penetration of inaccessible life markets.

Monetizing healthy living: Consumers are willing to share more of their personal information with their insurers if they are offered optimized, personalized coverage, reduced premiums or other benefits. South African carrier Discovery’s managed health program, Vitality, rewards customers for maintaining healthy lifestyles, improves the relationship with customers, and delivers a better-than-average claim rate. LifeNome aims to revolutionize lifestyle decision-making by using artificial intelligence and DNA input to generate personalized wellness plans and reports for individual households.

New risks emerging: The way people assess, mitigate and fund risk in a digital world is already beginning to change. Cyber insurance, autonomous vehicles, and the sharing or gig economy are among new-risk opportunities for commercial carriers.