Digitisation creates new opportunities for the Nordic life insurance industry
Many established actors realize that they can not carry out the digital transformation on their own. Therefore, there has been an insight into the need to act through different types of partnerships.
Four key issues that propel the change in the industry
Major efforts are being made by industry players to deliver a better customer experience in meeting with the customer in digital channels. Most digital advisory solutions have been launched from both established actors and new challengers. Many have invested in self-service solutions for brokers, corporate customers and private customers. With the ambition to simplify and digitize the acknowledged decent process of power of attorney, the Fullmaktskollen.se service has also been launched, with a number of players joining. The information exchange between operators in the value chain in the life insurance industry is becoming more automated and standardised. This allows for more cost-effective administration, which in the long run enables us to meet the continuous market demand for lower fees and increased transparency.
Four key issues that propel the change in the industry
· Customer relevance
· Disruptive technology
Customer relevance - Closer customer interaction, primarily through digital channels, creates higher customer loyalty. A success factor is to work more proactively and preventively with customers. Tips in lifestyle and health prevent damage and accidents. Then you can manage risk more efficiently and at the same time create higher customer relevance to customers. This enables a potential to sell complementary products and services.
Transparency - better informed consumers lead to more rational decisions regarding insurance and savings. Today, it's cool for a customer to compare insurance products from different players. Here, for example, customer information sites like My Pension and Consumer's website and price comparison sites such as InsPlanet and Compricer play an important role. Regulatory directives such as IDD and PRIIPS also force the industry to clearly and uniformly report prices and fees for their insurance offers. Customers are therefore better at choosing the most affordable products, which puts pressure on lower fees.
Disruptive technology - The use of Artificial Intelligence and Machine Learning for all virtual assistants, advanced robotised counseling, dynamic pricing and automated claims settlement waiting around the corner. Internet-of-Things with the ability to gather large amounts of data in real-time from products and living creatures provide support for prevention and individual pricing. Blockchain technology is expected to have a dramatic potential and be able to function as tomorrow's central infrastructure for transferring value over the Internet. Itello, together with Royal Institute of Technology in Stockholm, conducted a project during the year to evaluate the potential and applicability of the Nordic life and pension insurance industry.
Compliance - The industry's actors also have the daily business to handle. This is stressed by new regulations and laws. In recent years, Solvency 2, GATCA, FATCA, IDD, MIFID and GDPR have been introduced. Now IFRS17 and PEPP are waiting, changes are in other words constant and must be handled. Operators with modern IT system support see opportunities for new regulations. Others need to put resources on many proprietary systems to meet the new requirements.nities for new regulations. Others need to put resources on many proprietary systems to meet the new requirements.
Insurtech and Partnership
Many established actors realize that they can not carry out the digital transformation on their own. Therefore, there has been an insight into the need to act through different types of partnerships. New start-ups with the ambition to streamline or disruptively change the industry continuously see the light of the day. We have seen this happening in the United States and now it is happening in the Nordic market. For the established actors, it will be crucial to determining the strategy for which position you want to take in this new ecosystem and identify partnerships that support the chosen strategy. Analysis firm Celent presented various strategies that exemplify how multi-faceted today's business landscape is.
Image from Morning Insights Emergence and a vibrant Fintech / Insurtech ecosystem. Read more!
Which of the players who are the winner of the future is impossible to answer today. With the increasingly accelerated rate of change we see in the market, we can only be sure that the ecosystem will look quite different this year. Therefore, a crucial success factor for today's players is that they have reliable, adaptable and scalable IT support as a base platform for this change trip.
Swedish Insurtech landscape
Stockholm School of Economics and PA Consulting surveyed the Swedish Insurtech landscape in 2017 and categorised actors based on various roles in the value chain of life insurance and pensions. Today, Itello has nine of the market's life companies as customers and is a hub of the ecosystem for insurance and pension savings.
Itello - for tomorrow's winner
The companies that choose the market's best IT support from Itello will have the best prerequisites for becoming tomorrow's winner. Itello's clear ambition is to act as a central hub and facilitator to drive digitalisation of the Nordic life insurance and pension market!
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