Digital platforms, such as online marketplaces and social media sites, have become the dominant business model in many industries. The backbone of the digital economy, they allow people to exchange information and conduct transactions. Platform players and partnering businesses can also interact to form ecosystems, which provide users with an interconnected set of products and services in one place.
Digital platform ecosystems make it easier for insurers to reach customers at lower cost and increase customer engagement and loyalty. Policyholders benefit from more convenient access to insurance, embedding of coverage into other products and services such as travel services, and more personalized offerings.
To better understand how insurers are currently using digital platform ecosystems and their approaches to developing them, the Geneva Association conducted a survey of its member companies. The responses reveal that digital platform ecosystems are a key part of insurers’ innovation strategies.
Over 80% of insurers are already working with tech companies to build a digital insurance platform. Reaching more customers and improving the customer experience are the top motivations, cited by over 70% of respondents. Integrating digital platforms with legacy systems, data security and privacy concerns, and regulatory hurdles are the biggest challenges facing companies.
The report recommends that insurers pursue digital platform ecosystems, though the appropriate strategy depends on the nature of the company. Larger insurers should invest in developing their own platforms, either alone or in collaboration with an external technology firm, while smaller companies are best advised to partner with existing digital platforms.
Customers increasingly expect faster and easier access to insurance that is tailored to their needs. Meeting these expectations will not be easy for insurers, but investing in digital platform ecosystems now will help them rise to this challenge.
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