Breathing new life into insurance
Does anyone relish the idea of buying insurance?
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Consumers may know that they need to buy it, but the way in which the industry traditionally sells its products often causes them to delay or continually put off buying a policy.
While quite a lot of consumers with an interest in buying life insurance start the life insurance information-gathering process online, very few complete the purchase there. Meanwhile, since buying a life insurance policy feels like a burden, they may choose to spend their money on more exciting, less time-consuming and easy-to-purchase items.
Tech and consumers drive change
Although insurance has historically been slow to embrace technology, insurtech is changing the picture. Why? New, often cloud-based, technology can now crunch large amounts of data, quickly and efficiently. At the same time consumers now expect to be able to conduct their purchases of most goods and services on-line, with the ease and the speed that technology can provide.
Insurtech solutions are not only faster and more efficient but also allow for a far greater degree of tailoring to meet consumers’ specific needs. The traditional insurance sector needs to harness tech tools behind these solutions to reach more consumers with more tailored and accessible products or fall behind disruptive technology competitors.
However, adapting to new technology while still being hampered to legacy systems is not an easy task. The industry is already responding to the technology demands of new regulation with large amounts of capital invested in systems. At the same time, increased solvency requirements are another drain on scarce capital. The idea of expensively rejigging systems with new tech is a difficult pill for the industry to swallow. In addition, being up-to-date from a technological standpoint is a moving target and will require continuous research and financial investment.
iptiQ, Swiss Re's insurtech start-up, is taking on the challenge. Philip Walker, CEO at iptiQ Americas explains. “The huge size and low velocity of capital required to innovate in our industry does not fit the tech funding model. Building a modern life insurance company requires massive scale. It is much more capital-efficient to reform and accelerate an existing carrier.”
iptiQ shows the way ahead
iptiQ is a major part of Swiss Re’s tech strategy, which is based on the broad vision of “making the world more resilient.” Using technology, iptiQ is enabling partners to make insurance products more accessible and affordable, especially for end consumers who have not traditionally been buyers of life insurance.
iptiQ's business model is based on forging partnerships to sell insurance via trusted brands. It doesn't sell directly to the consumer, but instead provides digital, transparent and bespoke Life and Health as well as Property and Casualty protection products in a B2B2C format. Importantly, as CTOO Life Capital Pravina Ladva explains, iptiQ puts itself in the consumer’s shoes. “We ask what are the pinch points? What are the challenges? And then we identify technology solutions to solve these questions. We believe technology is a key enabler for our business."
A particularly intelligent aspect of the iptiQ platform is that it doesn’t require a distribution partner to undertake a major systems overhaul. Instead the iptiQ platform integrates with existing distribution partner systems and can be installed in a very quick time to market, depending upon a partner's particular needs as Philip Walker points out: “In 30 days we can put an insurance intermediary on the platform for products that we already sell. In 60 days we can produce a new user experience for a particular partner. A 90-day solution would be developing a new product for a partner or implementing one of their products on our platform. And in yet other cases it’s about partnering super deeply to develop an entirely different customer experience. “Partner” is really the right word. The level of engagement and the level of integration that we do is much deeper than what’s typical of the industry.”
In these ways iptiQ can address insurers’ typical pain points in one hit. So far, iptiQ has onboarded 29 partners across Europe, the US and ANZ; these include insurers, banks and insurance intermediaries.
Harnessing big data
Insurance is a conservative industry, and Swiss Re’s 150-year track record, balance sheet strength and expertise in risk analysis and pricing counts for a lot; iptiQ comes with a certain pedigree, which inspires trust in our clients. But it is its superior grasp on big data that will remain key to iptiQ’s success and its future relevance to the insurance industry.
Insurance carriers who on-board iptiQ, buy into an evolving set of tools, as Pravina Ladva explains. “We sit with global user groups and test what it is we’re going to take to market with them. We employ focus groups and usability studies, we then collate the findings and iterate on that. So we adapt our base product, and then keep changing it to reflect new and better information.”
However, perhaps the most important aspect of iptiQ, in line with Swiss Re’s global vision for the industry, is how it enables partners to meet increasingly demanding customers.
“The most important driver of disruption is customers who overwhelmingly and increasingly demand greater choice,” Walker concludes. “They want to choose between products and companies, and they have diverse needs that cannot be accommodated within a single carrier model. Customers and distributors want a variety of more agile, customer-centric choices.”
The potential for global growth in life and other personal insurances is huge. iptiQ has looked into the brave new world of global insurance and looked to grasp the opportunities there. Perhaps in years to come, consumers will wake up in the morning and look forward to buying an insurance product, because by then the experience may be both pleasant, easy and seem much more relevant to their daily lives.