At the seminar The Digital Insurer in London at the end of April 2014, the challenges and opportunities that are changing the UK insurance market were addressed. One of the conclusions was that the actors must pay attention to actors that are not currently in the insurance industry. It appears that the industry company’s value chain is being challenged by challengers and, as usual this is coming from a slightly unexpected direction. But one thing is normal – the challengers are focusing on owning the relationship with the customer and being the one that is adding value in the eyes of the customer!
One of the challengers or disputers is believed to be Google, which according to BGL Group’s Matthew Donaldsson has resources, digital opportunities and is clearly better at analysing large amounts of data than insurance companies.
A further example of challengers coming from some other industry is a report that examines User eXperience UX or usability/user value for lack of a better expression. Distributors like Easy Jet, Tesco Direct and aggregators or price comparison sites all have better UX than insurance companies. It is even normal that all the other actors have higher UX than insurance companies.
What we see is that the actors who have their origin in the digital world have a great headstart when they enters new markets/sectors. The customer relationship and user experience of buying the service and how others ”like” the company/service means that actors who invest in digital distribution channels have a big advantage compared with the insurance industry’s actors.
Sweden and Norway
A natural question to ask is whether this is the case in Sweden and Norway? Maybe not yet. A possible ban on commission payments in Sweden should lead to an increased interest in price comparison sites and we have already seen that ICA Banken and IKANO are moving from their positions. It does not need to be wrong to only make use of external distributors in the digital channels and continue to develop one’s offering in other channels. With an effective insurance factory the insurance company can increase “production” and obtain the advantages of scale. Our customer AMF is a good example that only focuses on collective agreement occupational pensions and which recently launched the idea of merging insurance agreements which ceased to apply because the parties made new agreements.