Online Insurance Industry
To understand the online insurance space, specifically the key trends, the development of the industry in the next 5 years, and the key players (which might include Sonnet, FRI:DAY, Lemonade) and how they are succeeding. Topics of interest are micro-insurance and how the Proper and Casualty market is changing. This information will be used to apply to an emerging market (the Caribbean).
Online Insurance Market Insights
- According to Deloitte, "many [insurance] carriers continue to struggle to drive more effective connections with consumers accustomed to online shopping and self-service" Even though digitalization to support or replace traditional intermediaries could be important, many companies are not ready to accommodate online consumers.
- The main reasons why most insurers struggle to provide innovation products successfully are legacy systems, regulatory restrictions and the lack of determination to introduce new products."
- By 2020, more than 90% of new life insurance sales are, at the minimum, expected to be influenced through online interaction such as "online searches to assess life insurance providers and advisers; compare price and coverage options; and apply for a life insurance or annuity policy on an insurer’s website. Others could look to take advantage of increasingly sophisticated robo advisory services."
- Deloitte believes that in the L&A insurance market, "online services and direct digital distribution functionality will also likely be necessary to compete in the multichannel environment taking shape across other insurance sectors." An L&A websites should have "online research features, improve the digital user experience, and prompt human follow-up if online inquiries are abandoned midprocess."
- Consumers want more and more control over their coverage. "A survey of life insurance consumers indicated that 90 percent of buyers revealed a preference for self-management of existing policies through digital channels."
- According to a survey conducted by Bain & Company in different countries globally, "at least 50% of customers use the Internet at some stage when buying both Property & Casualty (P&C) and Life, Disability & Health (L&H) insurance, which is a 60% increase compared to 2014."
- The survey from Bain further shows that "at least 50% of respondents are open to buying insurance from new entrants and companies outside the insurance industry. Interestingly, at least 60% of millennials agree with that."
- Customers still have a preference for purchasing insurance offline because it is "more personalized and easier to use," but providing a better user experience on each stage of the customer journey could change that.
- In China, digital insurers have examined their users’ needs and offer personalized product. Therefore, they have achieved extraordinary conversion.
- This is a market report from the online insurance market in China. Major players in this market are ZhongAn, China Pacific Insurance Company, Ping An Insurance, PICC, Taikang Life Insurance.
Summary of Findings
- During the initial hour of research, we focused on finding key players and insights in the online insurance industry.
- It was, however, challenging coming across market reports (which usually identify key players in a specific industry). The only exception was China. Possibly because insurance carriers are reluctant to move into that space.
- It was possible to find a number of insights on the online insurance industry which center around customers who are increasingly demanding to purchase their insurance online and insurance carriers that have not yet lived up to that expectation.
Proposed next steps:
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Wonder can continue the research by providing case studies for Sonnet, FRI:DAY, Lemonade. Each case study would look at the company's business model, the products they offer, and how they are succeeding in the online insurance space. Additionally, we could provide 2-3 case studies (with at least one company coming from China as they are noted to be successful in this industry) of other companies in the online insurance space and also provide the company's business model, the products they offer, and how they are succeeding in the online insurance space. The geographic focus for the companies identified will be global.
We can identify 4-5 trends in the online insurance/digital insurance market space. At least one of these trends should focus on micro-insurance in this space and at least one trend should focus on property and casualty insurance (P&C) in this space. For each trend, we will describe the trend, why it is a trend and provide at least one example of where this trend is being applied.
We can also provide 4-5 trends on developments in the insurtech industry. For each trend, we will describe the trend, why it is a trend and provide at least one example of where this trend is being applied.