Why Value-Added Services Are at the Heart of a New Insurance Business Model
Driven by increasing digitisation and innovation from agile new entrants to the market, traditional insurers are under increasing pressure to differentiate themselves or else risk falling behind. In this competitive market, value-added services are emerging as new digital “pull-platforms” that allow insurers to offer ancillary services and an improved experience to their customers, as well as generate new revenue streams and value across the insurance market.
Value-Added Services Offer New Engagement Models to Insurers
MarkLogic recently partnered with Marketforce to produce a report that explores the growing trend towards value-added services in insurance. Out of a total of over 1,000 senior insurance professionals surveyed, 87% believe that shifting to value-added services as their core proposition would give insurers a much better chance of establishing “pull-platforms” to draw customers in with range-fulfilling, convenient and sometimes unanticipated experiences that transform their businesses.
One recent example of this is AXA XL’s partnership with Parsyl, the Denver-based supply-chain data platform. This partnership enabled shippers to cost-effectively place sensors alongside sensitive cargo. AXA XL analyses the data from these sensors – such as location, temperature, light, humidity and movement – to generate loss-mitigation and risk-prevention advice.
Forward-thinking insurers embarking upon this change to forge new business models are stepping forward as more than just service providers, but also as lifestyle partners that leverage technology to enable customers to conveniently eliminate or manage risk. While such a transition may not be easy, the risk of not doing so could be altogether more problematic. In fact, 90% of respondents to our survey agree that if incumbent insurers want to remain in control of the customer relationship, they can no longer afford to be “just an insurance company.”
Single Customer View Foundational for Value-Added Services
In order to make this important transition, insurers must have a comprehensive 360-degree view of the customer. This may well mean instigating a culture change across the business – auditing behaviors and processes to ensure that they are 100% customer-centric – with the agility to innovate on behalf of the customer.
However, the challenge for many organisations is the adoption of large and complex legacy data systems that create a barrier to innovation and customer centricity. In order for transformation to take root, it is vital that insurers are able to access all of the data that is held in silos across the business.
In essence, it’s about having a holistic view across a number of areas, including customers, operations and risk assessment. Putting an end to obstructive data silos, innovative data systems like the MarkLogic Data Hub for Insurance allow insurers to unlock the value of all the information that exists across their organisations, which enables compliance, helps to manage risk, drives market insight and powers better customer experiences.