Those of us at the forefront of insurance technology use and adoption have been saying for years that the entire industry needs to step up or get left behind.
We’ve been warning of a digital transformation, and it’s been happening – even if more slowly than some of us would have liked.
What none of us could have predicted was that a global pandemic would be the catalyst for change – forcing insurance companies and agents to adopt technology more quickly in one year than they had in the previous ten.
A recent survey conducted by KPMG shows that 85% of insurance CEOs said that the pandemic has accelerated their digitization initiatives with 78% saying that the pandemic has intensified their focus on creating a more seamless digital customer experience. Spending the better part of 2020 using digital technologies in all areas of life has set consumers’ baseline for a quality digital experience at an all-time high, leaving insurers looking for a way to keep up.
That’s where the idea of open API technology and platforms comes in. It allows insurers to share and access data and services with third parties. Through open APIs, insurers can share data with insurtechs, financial institutions, and other organizations that possess data useful in helping insurers more accurately gauge risk and supply personalized coverage. For long standing insurers facing increased competition from newer more digitalized insurtechs, the open insurance model provides a beacon of hope
What will open APIs look like in the insurance industry? Here are a few examples:
- – They will allow insurers to tap into a wider variety of data in order to obtain a more detailed view of risk resulting in more accurate, personalized pricing for each policyholder.
- – Equipped with data-driven customer insights, insurers will be able to identify and pursue new revenue opportunities and product offerings more quickly than ever before.
- – By taking individual software components and incorporating them into their current offerings, insurers will be able to shorten the customer journey, improve customer experience, and adjust to target new customers.
Embracing the open insurance model will require insurers to shed their long-standing
hesitations toward data sharing and begin operating with a partnership mindset. Gone are the
days of noncooperation, replaced now by the values of combined offerings and diverse
partnerships. In the end, not only will the insurance companies benefit by staying alive – and relevant – in a more “open” world, but so will the insured people and businesses who rely on the coverage provided by these insurance companies.
2020 proved that disruption is not always predictable. In a world that seems to be moving faster every day, you never know when the next seismic shift may occur. The one thing we know for sure is that the future of insurance will depend on insurers ability to deploy innovative models of open collaboration. As insurers continue advancing their digital strategy, they cannot afford to ignore the promise of open insurance.
At UWIB, we’re always watching the insurance and technology landscape to stay ahead of the curve and provide our clients with the best and most informed perspectives.
Interested in working with us? We offer a no-cost and no-obligation insurance review to see if your current policies are working for you.