Digital is no longer a differentiator for insurers—it’s expected. So what comes next?
Not that long ago, the world of insurance seemed insulated to the digital disruption that was sending shockwaves through industries like music, retail, and advertising. It was considered really forward-thinking and innovative for an insurer to experiment with digital ways of doing things.
Those days are not that long past, but they already have some of the feeling one associates with listening to music on a tape deck. That’s because, as the 2019 Accenture Tech Vision for Insurance makes abundantly clear, digital is no longer a differentiator for insurers—it’s expected. We’re nearing a point in digital enterprise where more incumbent businesses will have completed their digital transformations than have not. The insurance industry is rapidly entering the post-digital world.
Built on a survey of hundreds of senior industry leaders and technical experts, Accenture’s Tech Vision for Insurance report presents insights to the leading edge of the industry. Each year the Tech Vision team identifies five key trends that are shaping the future of insurance.
All five of this year’s trends are fascinating, and you can read the whole report in the link above. But the one that really leapt out at me was “DARQ power.”
DARQ is a catchy acronym that stands for distributed ledger technology, artificial intelligence, extended reality, and quantum computing. These four technologies are set to spark a step change in the entire industry, allowing insurers to reimagine their role in the world.
In fact, many insurers are already doing just that. This often happens through a partnership with insurtechs, many of whom have greater fluency with DARQ technologies than industry incumbents.
One of the most promising areas of experimentation relates to delivering insurance “on demand.” This is a considerable technical challenge for insurers, but one that modern consumers expect thanks to the intensely customized and on-demand experiences that technology has created elsewhere.
For instance, industry incumbent ArgoGlobal Assicurazioni is working with gig work platform Jobby and insurtech start-up Axieme to offer on-demand, pay-as-you-go insurance for temporary and short-term workers in Italy. Customers can get liability, illness and injury cover—underwritten by ArgoGlobal—for the duration of a gig and extend it with a click if needed.
Some insurtech players are forging ahead without partnerships. For example, Italian startup Yolo has created a platform and app that allows people to buy instant and pay-per-use products on a daily or monthly basis. Its offerings include travel, sports, device and flight insurance.
The American insurtech Trōv, meanwhile, has rapidly expanded its business to Australia and the UK to most states in the US. Customers use an app to purchase insurance for items like laptops, phones, and cameras, for specific lengths of time. Coverage is turned on and off with the customer’s smartphone. Trōv has also branched out into on-demand mobility, renter’s and small business insurance.
These examples all involve insurtech partnerships, but it’s important to note that incumbent insurers can innovate and provide on-demand insurance on their own.
Take Farmers Insurance, which is reimagining renters’ insurance for millennials through its new brand, Toggle. Toggle offers boutique insurance subscriptions that give customers the freedom to toggle different elements of coverage up or down, on or off, at any time. It’s a major step beyond the traditional one-size-fits-all policies.
The post-digital era of insurance is still getting underway, but those looking to lead in this new age must start now. For some, that will mean launching pilots or new brands. For others, it will mean growing relationships with insurtechs or acquiring startups with innovative technology.
For every insurer, it will mean change, disruption, and opportunity.
If you’d like to continue the conversation about the changing nature of insurance, I’d love to hear to you. I can be reached here.