How winning insurance firms choose the right technology
Between 2004 and 2017, the number of general insurance companies in the UK plummeted from 673 to 436. In the past three decades, the number of insurance brokers has declined from over 10,000 to fewer than 3,500. There are many reasons for this, but a failure to invest in technology – or not ensuring those investments are maximised – has, without doubt, been one of the main differentiators between the winners and losers.
So it’s clear that selecting – and optimising – the right technology is essential for survival. Moreover, whether you’re aiming just to keep the ship steady, or looking for future growth, doing nothing is not an option.
So which way to turn? We know that making the right investments in an increasingly bewildering array of options can feel like a huge leap of faith. So here we put to Cognition24’s Business Director, Tim Chisnall, some of the key questions any firm in the insurance sector should ask when deciding which technology choices to make to minimise the risks and ensure future success.
What particular challenges in the insurance industry can technology solve?
Tim: As we all know, the industry is undergoing a period of rapid transformation with many issues it needs to face head-on. But I believe a key area to focus on is the way customer expectations are changing, and how they’re being shaped in particular by technology.
There’s a big difference between generations here. We’ve come a long way from the days when you popped down to see your friendly broker for all your insurance needs, to now – where the expectation is that all needs can be met by off-the-peg products served up by online comparison engines. So, the best place to start is to ask yourself: “How can I harness technology on behalf of my clients?” That is, what choices can you make to put your customers at the heart of your business and serve them better, whatever their age and whatever their expectations?
On top of that, you can look at how technology can help you maintain a year-round relationship with your client base, so you’re not only in contact with them when it’s time to renew or when something goes wrong. For example, marketing technology can create automated, personalised and relevant communications with clients – and this kind of online relationship-building has the potential to deliver a strong long-term return on your investment.
Can tech alone solve everything – or are other ingredients required to reach the necessary outcomes?
Tim: Whatever sector you’re in, it’s always fatal to think there’s a magic IT bullet that can quickly fix all your problems. To achieve anything, three key elements need to be aligned: the technology, the budget and the commitment. Without these forces working together, businesses often fall into the trap of blaming the tech, while in reality there might be bigger underlying problems that need to be solved first.
What technologies should insurance companies keep an eye on in particular?
Tim: There are four main areas to watch – and, because you can’t solve everything at once, it’s important to prioritise them. So, insurance firms looking to map a sensible and successful path to the future should generally keep a close watch on the following, in this order:
- Marketing technology (‘martech’)
- Customer relationship management (‘CRM’) – for enhancing your sales processes
- Insurance-specific software (e.g. for claims or broking)
- Finance and HR systems
Martech sits at the top, because I believe this is the place where technology can make the biggest difference to insurance companies right now – for example, by creating automated systems that serve up social media ads to people who have already shown an interest in your company by clicking on your website, or generating powerful, automated email campaigns.
How can insurance firms be sure they’re making the best tech choices?
Tim: First and foremost, don’t jump too early. Don’t be tempted by the myriad shiny new apps that are constantly appearing thanks to the insuretech boom. They might perform one small service well. But then you might be tempted to deploy another one, from another software company, to perform another service. Then another. And another. And before you know it, you have dozens of micro solutions that can’t be integrated and lots of employee time wasted trying to fit everything together. Not to mention the potential security, regulatory and customer service problems this can all lead to!
It’s far better to take a step back and consider what we call a ‘platform approach’. That means taking a look at your business in its entirety, rather than just department by department or problem by problem, then considering which tech providers are best equipped to offer a suite of solutions that deliver a more holistic approach to keeping your business ahead of the game.
As before, the starting point here should always be with your customers’ needs – so always keep asking: “How can I serve them better?”
And don’t forget there’s plenty of help out there. So whether you’re big enough to have an IT department or not, there are lots of good consultancies that can help you find and implement the best solutions for your business.
How can you make sure the technology you choose is a good long-term bet?
Tim: Look for software companies that are investing in the insurance market – that way you can be sure they’re working hard to create solutions that are a good fit for your business and your customers.
You should also be making sure your software comes from a company with a good track record and enough scale to ensure their offerings are robust and secure enough to handle your business’s needs.
It’s also worth considering your long-term business plans – for example, if you’re planning to sell up and head to a beach in Barbados next year, you’ll probably want to opt for a different solution than if you’re aiming for world domination by 2025.
Aren’t tech solutions these days virtually all the same, so it doesn’t really matter what you opt for?
Tim: It’s important to look beyond the technology and consider the mindset of the company that creates the software. Two apparently similar offerings might solve the same problem, but the vendors’ approach to everything else could be radically different – this could include payment structures, support and servicing, flexibility, commitment to the insurance industry, and whether it’s ‘cloud’ (so everything is hosted and updated remotely by the vendor) or ‘on premise’ (where everything sits on your own servers and it’s up to you to update and maintain it).
So, it’s important to assess all these factors and consider how they align to your own business. Again, a good partner can help you find the right fit.
Lots of businesses get burned by expensive IT choices that solve nothing (both inside and outside of the insurance industry)… How can insurance firms make sure the same thing doesn’t happen to them?
Tim: First and foremost, get commitment at the senior leadership level in your business to actually solve the problem you’re trying to address (regardless of the tech solution you go for). Secondly, make sure you get buy-in at the team level. Thirdly, of course, make sure you follow all of the advice above. Then, whatever direction you take, you’ll have the backing of the entire business and be empowered to find the right solutions – and if you hit some challenges along the way, you should find everyone pulling in the right direction to help make it work.
What if I’ve already made some technology ‘leaps of faith’ that aren’t working out?
Tim: Don’t just bury your head in the sand and hope things will get better. Without intervention, they won’t – and the sooner the better! It’s like when you miss a turning on the motorway: carrying on as if nothing went wrong won’t get you to your destination. A good partner company should be able to take an honest look at where you are now, where you need to be – and the road you need take to get there. As we always like to say at Cognition24, it’s never too late to evaluate!
Ready to find out more?
If you’re ready to start thinking about the right technology to take your business forwards – and the partners you’ll need to help you along the way – you can find out more here:
Alternatively, drop us a line or give Tim a call on 01462 412021. We’d love to get to know your business and help you make the best tech decisions for your future success.