“Most of us understand that innovation is enormously important. It's the only insurance against irrelevance. It's the only guarantee of long-term customer loyalty. It's the only strategy for out-performing a dismal economy,” said Gary Hamel, author of The Future of Management and Competing for the Future.
Innovation can come in many forms. It can be technology, a new way of work, or a seismic change in company culture. In the digital, it is coming in the form of recognition that a shift in power has occurred. For decades customers were told what, when, where and from whom to buy. Companies developed products and mostly dictated to customers the terms of purchase.
Within the insurance sector, insurance products were often pushed to customers. The customers were presented with limited options both on the products to acquire and the method in which the products were marketed and sold to them.
Arguably one of the biggest shifts arising from the digital economy is the recognition that customer has the final say in what, when, where and from whom they should buy their insurance. “Now every insurance company is trying to frame the solutions and the strategy around the customer. We have started to understand the customer better. We are following the customer very closely to identify their preferences, their [buying] behavior,” said Arpita Mitra, senior research manager, IDC Financial Insights.
On a positive note, she comments a change in regulatory behavior towards industry players. There is a sense of openness to engage in harnessing technology to stay competitive particularly in response to the entry of non-traditional insurance vendors.
In the accompanying video, Mitra lists some of the key challenges and opportunities for the insurance sector in Asia-Pacific as the industry faces the toughest period in its history. Among the topics she covers include:
- What is the biggest change in the insurance sector in Asia-Pacific in 2018? 0:05-1:08
- Technology having the most impact on insurers in 2018: 1:08-2:43
- Regulatory response to InsurTech developments: 2:43-3:50
- The biggest challenges to both regulators and industry players 3:50
- New innovation-led opportunities: 4:50-7:33
She warns that acquisition costs are too huge. It is incumbent upon insurers to get embedded into their customer’s lifestyle if they are to stay in the minds of their customers – at the point in the future when they are considering buying an insurance product.
