Astrid Malval-Beharry shares a case study on building a disruptive smart home solution for an InsurTech startup.
An InsurTech startup approached StratMaven for assistance with a monetization strategy for their smart-home solution. The company wanted to understand whether insurance carriers were interested in subsidizing the cost of the solution, as part of their overall objectives of improving the policyholder experience, preventing claims, and reducing overall costs.
StratMaven conducted in-depth interviews with carriers and surveyed policyholders to test the product concept and perceived value(s). We found that all carrier segments (large, medium, small by homeowners insurance premium size) had strong interest in the solution, but required additional data supporting the solution’s ability to prevent catastrophic damages. Additionally, carriers were interested in receiving a concrete translation of the savings potential resulting from these specific performance metrics. Finally, StratMaven discovered that while respondents clearly saw the value of the solution at a conceptual level, there was some operational uncertainty with device installation and monitoring that could be addressed using a well-crafted pilot program.
StratMaven helped our client formulate a roadmap to bring the solution to market by providing a better understanding of each carrier segment’s willingness to pay for the solution as well as which features should be emphasized when marketing the product. By validating the company’s hypotheses with key market stakeholders, StratMaven helped our client protect its first-to-market competitive advantage, while providing the insights needed to allow them to confidently move forward with their product development plan.
Access the case study, Building a Disruptive Smart Home Solution, on Stratmaven.com.
David Burnie shares the second article in a series on the future of P&C insurance in Canada.
In our first article outlining the future of P&C Insurance in Canada, we discussed how insurers have been and are continuing to invest in digital transformation agendas in an effort to reshape distribution and service in an industry that has been relatively slow to adopt modern business practices. We illustrated how the sector will evolve by focusing on how consumers (both individuals and small-medium enterprises) are beginning to interact differently with carriers and brokers to obtain new policies and have them serviced once those policies are in force.
In part two of our three-part series, we focus on how insurers are changing their underwriting and pricing practices to be more sophisticated, efficient, and profitable.
Underwriting and Pricing
From an underwriting, pricing, and risk selection perspective, two factors will impact risk assessment, pricing, and underwriting in the future:
Data collection and use
Increased use of automation and integration of technology
Data collection and use
Concurrent to the digital transformation wave is the rise of big data. As a result, many insurers are looking at their enterprise architecture and setting up data lakes in the hopes of realizing benefits down the road. The promise of these benefits is high as the variety, velocity, and volume of data continues to increase, and insurers create the infrastructure, capability, and culture to exploit this data. Historically, external data sources have been expensive in Canada relative to other geographies, such as the UK where much of the data used for selecting and pricing risks is free. Still, the provincial regulators and collaborative organizations such as the Centre for Study of Insurance Operations (CSIO) understand how valuable data can be to the industry. Data enables insurers to underwrite and price policies more effectively while serving customers better, improving combined ratios, and passing collective savings on to customers.
Key points include:
- Intake & Triage
- Risk Assessment and Pricing
- Underwriting Processes
Read the full article, The Future of P&C Insurance in Canada: Part 2 – Underwriting and Pricing, on the BurnieGroup.com.
From his company blog, David Burnie shares the first article in a three-part series on the future of P&C insurance in Canada and how the sector is evolving within. The series explores distribution, pricing and underwriting, and claims.
For many years, the insurance sector had been notoriously slow to evolve. Customers viewed insurers as difficult to do business with, while insurers saw little need for change. Products were largely commoditized. To “win,” many insurers had to form stronger relationships with brokers than customers to get a bigger piece of the pie, while sufficiently maintaining these key relationships to promote positive risk selection and maintain profitability.
What has changed in P&C insurance?
Over the past five to ten years, insurers reached a tipping point where fundamental change was inevitable. Legacy policy administration platforms were ageing and no longer supported, which exposed the sector to increased risk; insurers could no longer ignore the need for updated technology. Although the motivation for this transformation was to stabilize the business for continuity purposes, modernizing technology offered ancillary benefits in the hopes of creating more nimble and efficient organizations, supporting customer-centric cultures, and accelerating the pace of overdue innovation and change sector-wide.
Changes are the most apparent in the way insurers serve their customers. Customers can now interact with insurers in ways that they hadn’t been able to do in the past. Digital quotes are now virtually ubiquitous amongst carriers, and brokers and aggregators are evolving to enable digital purchases, though this is in its infancy in Canada. Moreover, insurers are beginning to offer customers the ability to service their policies online or through their mobile apps. Perhaps the most significant changes are emerging out of claims groups that are now starting to offer a complete end-to-end digital experience, which we will elaborate on in the third part of the series.
Insurers were late to the game, but they are beginning to meet the minimum expectations of customers in an ever-increasing digital world. Though many large-scale platform implementations are completed or underway, we’ve only reached the tip of the iceberg since many of these implementations are still going through growing pains for myriad reasons, such as:
Large-scale programs have been descoped in this age of minimum viable product (MVP) to get the core system off the ground and meet time and budget constraints.
Add-on technologies such as CRM and/or specific Insurtech products that will unlock benefits by integrating with core systems but were not included in the initial business case and require their own independent cases to get off the ground. In many cases, these have stalled or have their own long-term implementation time-horizon.
Insurers continue to adapt their long-standing processes to new ones to meet the out-of-the-box configuration offered by vendors or pre-configured cloud-based system integrators.
The transition from legacy to modern platforms is challenging. Moreover, converting policies from old to new is not without errors and inefficiencies when teams must work in two separate technology environments.
Key points include:
- Distribution and service
- Cost savings
- Digital innovation
Read the full article, The Future of PC Insurance in Canada – Part 1 – Distribution, on BurnieGroup.com.
David Burnie shares a post from his company blog on how automation in the first step of claims processing can help streamline the process.
The First Notice of Loss (FNOL) – the first step in claims processing – is one of the most crucial customer touchpoints for an insurer. Yet, for most carriers, FNOL continues to be a lengthy, manual, call centre-based service requiring extensive data gathering. This process translates to high operational costs and cycle time and a less than satisfactory customer experience.
Providing a fast, streamlined and transparent claims intake process is no longer aspirational; it is table stakes for customers who expect nothing less from their interactions with all their service providers, including banking, retail, and entertainment.
Luckily for insurers, the intelligent automation landscape has advanced significantly over the last few years, enabling insurers to innovate rapidly and cost-effectively.
Traditionally, the key barriers to change for insurers included long-established processes that rely on legacy systems and a workforce under strain. A transformation roadmap for claims starts with re-imagining the end-to-end customer experience at each stage of the claim. Intelligent automation and artificial intelligence (AI) offer a proven pathway to produce a better claims service while leveraging core legacy systems. Intelligent automation brings systems, both legacy and new, into the process to create a seamless experience.
Key points include:
- Automating FNOL in auto insurance
- Automating FNOL in travel insurance
- Benefits of intelligent automation in insurance
Read the full post, How Automation Can Support First Notice of Loss (FNOL) Reports, on the Burniegroup.com.
Umbrex is pleased to welcome Umbrex is pleased to welcome Rudolf Luerzer with GCN Consulting. Rudolf spent three years in the insurance practice at McKinsey and has been running his own consulting firm focused on consulting, training and coaching services for the top management in the (financial) services industry since 1990. Rudolf has lead major strategy and restructuring projects in (re-) insurance and other service industries.
He lives in Vorarlberg, Austria with his wife and enjoys travelling in Asia and the Americas whenever possible. Rudolf is happy to collaborate on projects in the (re-) insurance industry in Europe and in projects in collaboration with NGOs.
Umbrex is pleased to welcome Katy Huang with HAW Consulting. Katy comes with a stellar educational background: Master of Engineering in Chemical Engineering from Oxford University, MBA from Harvard Business School and Lloyd’s Leadership Program Exec Ed at London Business School.
Since going in house in 2006, she reported to the country CEO. Her insurance experience spans Life Insurance with McKinsey, chief of staff for Beazley’s Political risk and Contingency division for 5 years, freelance consulting projects for Bought By Many, Charles Taylor Adjusting, Hiscox and Oasis Loss Modelling Framework. Her McKinsey Business Technology Office background also makes her very unique in understanding the challenges of how to leverage ever changing technology for business growth and optimisation. She’s a great thought partner and invaluable in helping her C-level clients make things happen and a role model for working mothers. It’s her 9th year as a school governor at the local state maintained primary, and now also serving at the multi academy trust secondary school next to it.