This is the second blog post aimed at discussing the opportunities for digital technologyin insurance within the framework of a higher design principle, one that is not technology-led, but speaks to delivering value for consumers of insurance (both individuals and businesses). The tenth anniversary of Facebook is an appropriate date to pass along this next installment.
Why? Because Facebook illustrates the difference between a narrow, technology-focused and a broad, solution-based design principle. If Facebook had been trying to only deliver digital content on the web (a tech-focused approach), it would still be only a posting site. However, with its introduction of the News Feed feature, it moved into the Awareness realm. It went from “look what I have been doing and I’ll look at your posts too” to a proposition “I want to be aware of what my network is looking at because I’ll probably be interested too”.
This shift reflects the key design principles of the Awareness approach:
- Passivity of user – minimal or no user action to initiate Awareness (FB: don’t make the user look for news, deliver it to them when they sign on)
- Pattern recognition determines activity and records preferences (FB: monitor what are friends doing and match that to the user’s interests)
- Always on capability (FB: continually monitor activity and make it available when the user accesses the site)
- Allows user to choose to “manage and/or turn off monitoring” when desired (FB: I wouldn’t identify this a strength to the platform so far)
Applying Awareness to insurance, I would add two additional key design principles:
- Signal when a deviation from normal activity occurs using data analytics
- Provide a user’s current and past location(s)
In my last posting on Awareness, I described a commercial insurance example (http://insuranceblog.celent.com/2014/01/stop-designing-to-be-a-digital-insurer-use-a-business-value-proposition/) .
Another example in health insurance involves continuous monitoring of an insured using their smartphone. If any one of several key biofeedback measures begins to register out of a normal range, the insured receives a text to schedule a doctor visit. The insurer is constantly aware of the health of the insured and takes proactive steps to intervene appropriately when needed.
Does this sound like Star Trek? Something we should be able to do in the future? A company called Tokio Marine Nichido launched such a product in Japan last summer (June 2012). The insurance policy provides a reimbursement ranging from $50 to $300 for the visit based on the final diagnosis.
As I mentioned in my earlier post, I am confident that we are ready to design digital solutions which change insurance from a backward-facing, financial indemnity product to a continuous, predictive, risk management service. I’d appreciate your views, either in reply on this blog, or you can reach me at firstname.lastname@example.org
- Tokio Marine & Nichido partners with a telecommunications firm to deliver location awareness for their one day insurance products. If I drive to the airport, I receive a text on my phone with an offer for trip insurance. If I am approaching a ski area, I get a message that ski event insurance can be bought for one day for as low as $4.00. If I work at the airport or ski employee, I don’t receive the texts after the first few – the system learns that I am not a prospect. Based on location awareness, Tokio Marine is Aware that I am engaging in an activity that is not part of my typical day-to-day routine, one for which I may not be covered, and offers me a policy to cover the gap at the right time.
- In the United Kingdom, the insurer AXA combined several pieces of public data with their internal policyholder information and created a visual map of where the London riots occurred on the morning after each of the five nights of the 2011 riots. They could tell by looking at the map which of their policyholders (mostly small retail businesses) were located in the affected areas. For those that had not reported a claim, they called them to make sure that everything was alright – NOTE: the insurer called the insured to ask if they had a loss. AXA reversed the traditional FNOL (first notice of loss) process and proactively contacted their policyholders based on this Awareness of the increased risk of their customers.
I’m convinced that starting from this higher order of design will deliver more value faster, will help get business sponsors on board earlier and more completely and will avoid investment in technology for technology’s sake. As we enter 2014 I am also sure that we are ready to have this conversation and design solutions what change insurance from a backward-facing, financial indemnity product to a continuous, predictive, risk management service.
Let’s play Jeopardy together! If the most frequently given answer from a panel of insurance customers is “Don’t know,” what was the question?
It was: “Which UK insurer do you think is the most innovative?”
For those who think that is an exaggeration of the common opinion that the insurance industry is not innovative at all, let me tell you that the second most frequently given answer was “None.”
As Jo Hind – Industry Head, Finance at Google – explained during the first presentation of the Digital Insurance and the Customer: Mind the Gap! event Celent organized in collaboration with Google, the pace of change is accelerating. More and more people are using digital communication means to get information about financial products, including insurance policies, and among others mobile devices are getting great traction. To pave the ground for the rest of the event, Jo left the audience with simple but relevant questions to insurers: How important is mobile to the insurance business? Are insurers optimizing and planning for the four-screen world (computers, TVs, pads, and smartphones)? How can insurers engage better with their customers? Are products offered by insurers meeting consumer expectations?
When Craig Beattie followed Jo’ s final interrogations with the Celent views on the customer, Google, and UK car insurance based on research he and Catherine Stagg-Macey published recently, we – in the audience – could not anticipate that the phlegmatic British analyst would provide the audience with such an insightful and dynamic analysis of the reasons for and consequences of the changing behaviour of insurance online shoppers. After this moment of brilliance, it was time for people to take their breath and enjoy the networking break to exchange about what had just been exposed to them by Google and Celent.
The audience had opportunities to share their thoughts during the discussion panel session which ended the whole event. Ian Morgan – Industry Leader Financial Services at Google – moderated the session, which saw Jem Eskenazi – CIO of Groupama Insurances, Ollie Holden – Solution Delivery Director at LV=, Catherine Stagg-Macey – Head of EMEA Celent insurance, and Jo Hind debate about mobile and digital insurance predictions. The audience was asked to provide its opinion on these predictions before they were discussed in more detail with the panelists.Let’s play Jeopardy again! What question related to the Celent event summarized above will result in the following answer? “Certainly.” It is: “Are insurers who were present in the audience going to view digital insurance and the customer differently from now on?”
Celent recently conducted its third Peer Networking Event, exploring the topics of Enterprise Content Management (ECM) and Digital Commerce. Alternative approaches, successes and gaps were actively exchanged by the 40 participants, representing 13 carriers. We would like to thank The Hartford Insurance Company for hosting the session.
The morning kicked off with a presentation by Ben Moreland, Celent Senior Analyst, which summarized the results of research on ECM in insurance. Among the many data points reviewed, the most active discussions concerned moving away from metacode formats and responding to personalization and prioritization requirements by the business. Numerous practical solutions were shared. One company detailed their use of a middleware utility to aggregate and control output from multiple administration platforms.
A presentation by one of the attendees followed which described their ECM platform and detailed the technical and governance challenges involved in managing a complex environment. From the comments exchanged between participants, it was clear that a goal common among many insurers is to rationalize and consolidate products and platforms. In addition to making the correct technical decisions among many alternatives, the softer dimensions of governance and change management are key success factors in modernizing content management.
The afternoon included a great deal of networking and a panel discussion that dealt with the transition to digital commerce. The panel included both IT and business representatives as well as an executive from the banking industry. They outlined the successes and challenges in their efforts to deliver a consistent experience across digital channels, integrate digital and analog customer service touchpoints, and provide personalization of the user experience. A fascinating approach used by a North American bank to self-fund its digital commerce development effort was outlined.
In all, a great deal of practical information sharing and great networking took place in a very productive and relaxed environment. Celent is in the process of planning additional peer networking events, so please stay tuned for announcements about upcoming events. If you are a carrier and would like to host a Celent Peer Networking Event, please contact Chuck Smith at email@example.com.
Carrier staff are invited to join Celent’s Peer Network on Linked in by going here http://www.linkedin.com/groups?gid=3886663&mostPopular=&trk=tyah. The group provides a forum for insurer IT and business strategists to share ideas and network.