Insurance has a hard time. Safeguarding clients against daily risk and providing them peace of mind has earned the insurance sector profits for decades. But something seems to have changed. Recently, there has been a decline in growth and profit. The glorious multi-billion dollar sector lost pace. What going on?
TECHNOLOGY ADVANCES RAPIDLY
The arrival of the internet, social platforms, and smart-phones drastically changed the mode of operations of the pre-existing insurance business model. Nokia and Kodak are two of countless established companies that underestimated, overlooked, or reacted too late the emerging digital technology.
CUSTOMERS LEARN FAST AND ADAPT
Customers swiftly embraced the use of digital services such as online banking, social media, and online retailing that offer customers low-cost and prompt reward. Policyholders have come to await such level of service from their insurers. Insurance customers are now at liberty to select from a wide variety of services that suits their individual needs. They no longer require the real person services of an insurance agent or broker.
INSURTECH STARTS UP AGGRESSIVELY
Insuretech startups query the traditional presumptions of the incumbent corporation; take the current technology, and begin to offer innovative and novel services. Outstanding examples encompass of comparison sites, pay-as-you-go insurance, digital brokers, and peer-to-peer insurance providers.
TREMENDOUS OPPORTUNITIES FOR INCUMBENTS
Traditional insurance providers can no longer continue to perform its duties with their traditional business model and operating processes, due to the described external changes. A tremendous opportunity awaits those willing to adapt to the new technologies and behaviors of policyholders.