Innovation rules the day when it comes to the insurance industry. In an increasingly unpredictable world, companies that adjust their product offerings to changes in the social, economic, and physical environment are most likely to remain relevant—and attract more customers.
However, insurers face challenges in achieving speed to market. Bureaucracy can slow down processes, legacy technology may not be up to the task of innovation, and lack of human resources, particularly on IT teams, can hamper transformation efforts.
Speed to market is not a ‘nice to have. It is a key contributor towards insurers’ primary goals, such as improving profitability, growing market share, building customer loyalty, and reducing costs. Insurers can take concrete steps to become more competitive and seize market share by examining obstacles and solutions for getting products to customers more quickly.
Look at the implications for speed to market.
Benefits of faster speed to market in business
Market share increasing
When competitors take over market share, they will often be offering enhanced or new products. By tracking market share continuously, insurers can remain alert to developments that draw customers and react to defend their position by quickly enhancing their own product range.
Profit margins growing
A company that competes with new, innovative products may find margins increasing. Advances in data analytics mean insurers can take a more data driven-approach, building and iteratively improving new products based on a real-time assessment of their performance.
Customer loyalty improving
Building brand loyalty in the insurance industry is hard. Customers want and increasingly expect a personalised experience, which can be hard to deliver at scale. Insurers who leverage new technologies to better understand their customers and quickly deliver products that meet their needs have the best chance of creating loyal customers.
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Why speed to market is a competitive advantage
A company that is the first to offer a new insurance product or update has less competition. Moving quickly to adjust to trends such as climate change, the move to remote work, and driverless cars can help an insurer capitalise on new coverage needs while others lag.
A completely unaddressed customer segment allows a company with agile speed-to-market capabilities to create and market insurance solutions that meet robust, emerging demand. This requires anticipating needs, keeping up with cultural and social interests, and moving quickly. Insurance is a heavily regulated, high-competition industry, so streamlining a company’s internal processes and enhancing its technology can make all the difference in capturing market share.
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Insurers should also update products that are already on sale in response to product performance or market trends. For example, suppose an insurer identifies that a product is not performing well, resulting in a high number of claims (and an unfavourable loss ratio).
In that case, it could adjust the product (perhaps by increasing the price, adjusting the coverage offered, or amending the eligibility criteria) to improve the performance. Speed to market helps the company respond to insights from data on performance and make changes to reverse a negative trend and protect profitability.
Tips to increase speed to market:
- Implement a well-defined, collaborative process
Product creation requires a dedicated, cross-functional team that understands the business goals and process. This is not the time for siloed departments, territorial teams, or reluctant collaborators. Eliminate cumbersome processes and promote collaboration over competition. - Simplify products and streamline portfolios
Complex products are hard to change and even harder for customers to understand. Identify areas where products overlap, and look to streamline these. However, be sure to allow for customisation in areas that customers truly value.Look for ways to simplify product documentation and underwriting. Customers want simple products that are easy to understand and give them the cover they need. Insurers can then bundle these simplified products to create a more tailored package that meets a specific customer’s needs.
- Invest in new technology that enables rapid product development
Transformation of core systems can take years and leave a company far behind in the marketplace. Insurtech companies can help automate, accelerate, and build initiatives that get to market quickly while fitting in with legacy offerings. Going it alone is a thing of the past. Insurers that take advantage of new technology from insurtech companies gain a partner that can keep them agile and profitable.A survey from Deloitte Consulting found that more than 90% of insurers considered their existing technology insufficient for product development in the next three to five years.
Partnering with an insurtech firm can help insurers bring new products to market and update existing ones in days rather than months (or even years!).
- Embrace experimentation
Insurers in the past have erred on the side of caution when trying to get a new product ‘right’. This resulted in months and years of development. While product creation and due diligence remain important, today’s market requires timely innovation.
Experimentation can no longer be an afterthought. With rapid speed to market methods in place, insurers can launch a new product, monitor its performance closely, and quickly react if they need to.
- Be a fast follower with agile speed to market
A company can profit by following quickly when the competition introduces new solutions. This means having a flexible team and technology that can react rapidly to trends in the market. This allows the competition to take the initial risk, and then a quick move to offer similar (hopefully better) solutions can capture market share. It is impossible to anticipate every trend, so watching the trends that others uncover can still be an advantage for a company that can move quickly.
Conclusion
Speed to market depends on an insurer’s technology, internal processes and available resources.
A company must remove internal obstacles that slow down or kill initiatives and embrace new technologies that enable it to react fast to changing trends in society, the environment, the economy and market regulations.
Forward-thinking insurers are taking advantage of modern insurtech platforms that dramatically reduce speed to market by streamlining, automating, and integrating new offerings with existing ones. This enables insurers to adopt a more experimental approach, launching a product and quickly reacting to performance with appropriate product updates.
How to improve the speed to market for an insurance product?
If the recent years have taught us anything, it is that we must be ready for the unexpected, and able to respond quickly to whatever challenges appear. Speed to market should therefore be a top priority for insurers for the foreseeable future.
In a fast-changing world, insurers who become more efficient at bringing new products to market will dominate. Download the exclusive virtual roundtable recording on how insurers can innovate to stay relevant and learn about how technology can increase speed to market and strengthen market position.
