Insurance of the future is a service not a product

Read the article in Danish here.

The insurance of the future is far more than insurance. Customers' expectations of how they interact with companies are undergoing the most fundamental revolution since the beginning of the Internet age, and to that extent this also applies to the insurance world. Change will come. Now.

The classic insurance products and services are under pressure as the customer needs of the future become more complex. The winner of the insurance of the future will be the company that can take advantage of new trends and technologies and at the same time create customer insight through good risk management and compliance, create and influence new ecosystems and take on customers' universes through partnerships.

Today, consumers often find their insurance journeys impersonal, time consuming, transactional, complex and also expensive. In short, we have reached a point where customers feel they need insurance, but they do not need insurance companies. And what is meant by that?

Imagine that in 10 years you decide that "with us, our customers (virtually) should have no damage or accidents," what kind of service would you then offer your customers? You would then go from an injury repair agenda to a prevention and improvement agenda. All of a sudden it would be about something completely different that customers actually much prefer. It's about next level customer care, helping one's customers make the right choices and avoiding harm. In short, consumers and businesses are looking for service providers who can help them achieve their goals anywhere and anytime.

Insurance of the future
Insurance companies need to be involved in designing platforms and ecosystems that are tailored to each user based on a broader set of needs, but fundamentally redesigned around individual customers. It requires a transformation in customer interaction and experience by innovating with product and service designs supported by partners across the customer's existing and evolving ecosystem.

For example, if the customer is looking at a house, how would you introduce insurance services and services throughout their lifetime? Could it be that you should advise on what is important to look for at the house itself, and possibly offer to co-finance if the customer has rat protection, drains or a new pipe system made throughout the house? You could also introduce the customer to an IoT pressure gauge which measures if the pressure suddenly drops, or a moisture meter which even advises plumbing and so on.

Partnerships will be one of the major strategic pillars of the insurance world. Because companies are not meant to be able to do it all by themselves, they get a lot more out of doing it with others. Partnerships will fit in well with the new prevention and improvement agenda, and at the same time the customers of the future will require great flexibility and readiness for change, which the partnership contracts must also reflect. The partnerships should only be binding as long as it is a win-win situation for both parties.

An example could be if you, together with your car insurance, offer regular car washes in collaboration with a car wash company.

Sustainability and insurance

Sustainability also plays a role in the insurance of the future - technological advances and innovative partnerships make it possible to recycle. For example house or car parts in connection with damage, which appeals to many customers at a time when green investments, climate considerations and CSR ambitions are emerging as decision parameters, when customers have to choose insurance, banking and pension.

The new generations have the same expectation of speed, availability and flexibility when it comes to insurance, as they do for other parts of their digital lives. They will for example prefer an insurance that starts when needed and stops when not needed. They want (pre) security integrated into their daily lives, silently and imperceptibly, as part of the life they live and the ecosystems of which they are a part. They want a world where technology transforms the traditional offering into an ingenious platform of services tailored to each user that they can tap in and out of easily. Just as they no longer watch flow TV and leave it up to the TV stations to put together today's program, they will also no longer be passive customers who let the insurance industry decide how their insurance policies should be.

The changed customer expectations and behavior are also expected to affect the industry's insurance products, so that subscription solutions based on use / behavior become more common instead of a fixed annual price.

Health insurance will be very different in the future, just as the entire health service will be. Here it is a matter of finding out what kind of support the customers need. In the future we will be able to map our health risks using simple (blood, gene or genome) tests. Imagine if an insurance company would help you with preventive treatment instead of only stepping in once the illness has occurred?

The insurance of the future is the next level in customer satisfaction. See the insurance of the future as a Lego brick, where you can connect all sorts of different services in all kinds of colors and shapes. The future does not need insurance companies - but we do need insurance.