The three trends shaping the P&C industry in 2014 and beyond include shifting mobile strategies, the changing value proposition of usage-based insurance, and claims innovation for homeowners’ insurers, according to “Top 10 Trends in Insurance, 2014: Becoming More Customer-Centric,” from Aite Group. The report also highlights seven trends for life/health insurers.
P&C insurers likely will focus too much on consumer-facing mobile/tablet capabilities in 2014, said Analyst Pat Speer in the report. A recalibration likely will follow as insurers next invest in capabilities to make agents more effective with Gen Y customers.
Speer said mobile technology is evolving to become a primary customer-facing tool, and that users download between 25 and 40 smartphone apps per year in the United States. “Smartphones have become the preferred computing and communications system for younger policyholders who bring high expectations for fast, efficient, and highly personalized customer service,” Speer said in the report.
However, those users will still have questions and need help making decisions, Speer said, and insurers likely will find they are not including enough touch points for independent or captive agents to maximize the value they can and should offer to customers.
“Evidence of the consumer/agent disconnect is seen in insurers' 24-month IT spend expectations and allocations,” Speer said. “As part of Aite Group's 2013 survey of 45 insurance IT executives, our discussions with numerous carriers indicate a trend in carriers' plans to spend to achieve ‘stellar’ consumer mobile and tablet capabilities, yet fewer of these insurers plan to spend to maintain ‘stellar’ agent mobile and tablet capabilities. Meanwhile, with results as a directional indicator, the survey finds that only 6 percent of overall IT budgets are specifically allocated to customer experience projects and only 5 percent to distribution projects.
The primary value proposition for usage-based insurance likely also will change to overcome customer trust issues and overcome other obstacles to wider adoption, Speer said. That likely will happen through value added services, such as teen driving and other value-added programs, and demonstrating that insurers will not misuse consumers' driving data.
Other value added services that could help change the value proposition include vehicle health reports, such as the one offered by Ford Motor Co. through its Sync technology. Other value-added services offered or under consideration include coaching, geofencing alerts, usage reports, fuel economy reports, vehicle diagnostics, traffic, recall and various maintenance alerts, theft tracking and more.
Homeowners’ insurance claims is another area ripe for innovation, said Stephen Applebaum, senior analyst for Aite Group, in the report.
“P&C carriers are no longer able to rely upon external conditions, which are beyond their control, for growth,” Applebaum said. Several vendors now are making available external data, self-service Web portals, where carriers and adjusters can manage payments and make it easier to settle claims and funds to claimants quickly.
Technology companies mentioned in the report include Buildfax, which offers a national database of municipal building permits; Enservio, which offers a suite of software and services and self-service portals, to help insurers price their policies correctly, settle claims quickly and accurately, pay claims and help policyholders replace insured property. And EagleView Technologies, which offers software using satellite and aerial imagery, and proprietary algorithms, to generate accurate structural property measurements, which are needed to estimate property damage claims. Increasing accuracy and availability of that data could save carriers millions of dollars in appraisal costs and severity, Applebaum said.
Related content: 2014: A Year of Transformation for P&C Insurers
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