January 17, 2023

What are the benefits of digital transformation and joining the digital insurance community?

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In a post-pandemic world, efficient digital services have become a prerequisite for most consumers. This digital-first environment is leading to the growth of digital insurance ecosystems. Many insurance providers are beginning to offer various services, including self-management tools, consultations, data-based services, etc. Similarly, players outside the insurance industry offer insurance products directly to consumers. The existence of digital insurance clubs has enabled the presence of these cross-industry services.

While developing digital insurance ecosystems is undoubtedly challenging and costly, if you find success, digital insurance clubs can open up new and stable sources of business growth and income for you. So, even though the upfront cost might be high, a digital insurance ecosystem offers many opportunities.

Here’s how a digital insurance ecosystem or club offers more opportunities that more than offset its initial costs:

Digital Insurance Clubs Offer Undeniable Opportunities

Typically, insurance providers have been focused solely on selling policies to customers instead of offering holistic risk and protection services. Joining a digital insurance club will help them shift from a goods-dominant mindset to a service-dominant mindset, developing a new ad beneficial culture.

Consider health insurance in which the policy’s value lies in offering coverage for financial risks, i.e., medical bills. However, by joining digital insurance clubs, this offering can be enhanced via services related to health management and telemedicine that they can offer through collaboration with dynamic innovators. It will enable improved prevention and reduced costs via appropriate care settings, benefitting the insurer and the customer.

Steps Insurers Must Take to Find Success in Digital Insurance Ecosystems

•     Insurance providers must embrace service-dominant strategies and establish a collaborative, open culture for the dynamic growth of all players.
•     Insurance companies should bring their existing organizational capabilities rooted in customer-centric value propositions. They must establish experts in their respective ecosystems, such as healthcare, home, life, etc. Insurers must also build the tech foundations required to integrate partners into APIs and create effortless customer journeys.
•     Lastly, insurers should engage customers and external actors through service exchange and resource integration for mutual value generation. For instance, an auto insurance company can offer a telematics policy to offer incentives for good driving behaviour and value-added services, such as car services and sales. It will enable them to create touchpoints with their customers and dynamic ecosystems through service exchange with players from related industries.

The Bottom Line

If insurance providers join digital insurance clubs or ecosystems, they can bring about a change in how they offer their services to consumers. They can work with various tech experts and players from other industries to use data-based customer understanding for mutual benefit. While they will have to spend on new strategies and services, successfully transitioning to an ecosystem with other players will help insurers get an edge over competitors who stick with traditional insurance products.

Wesurance is an Insurtech company in the U.K. providing a platform that empowers insurance companies and brokers to easily build, develop, and grow their digital insurance branches. Through a simple-to-use and easy-to-implement solution, you can build your own digital insurance quickly and with ease. No worrying about coding to integrate the digital insurance process into your insurance business. Learn more about us at https://www.wesurance.io/.

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