Our Head of Financial Planning & Retirement Phil Allen recently attended a roundtable event to see what the future may hold for insurance and how ‘InsurTech’ is changing the game.
It’s hard to escape the noise around the disruption in the banking industry caused by the FinTech scene, with an emergence of new challengers, innovations and collaborations amongst ever hungry start-ups and evolving incumbents. Well the next industry sector facing the same amount of challenge and change is insurance, bringing with it a term that we should all be increasingly familiar with – InsurTech.
I attended a roundtable recently which was attended by a host of insurance industry experts and Asset Managers, together with commentators, consultants and interested others. The key topics of debate were very similar to those that I’ve been involved with around FinTech over the last couple of years;
Will incumbent players like ourselves be agile enough to compete with nimble start-ups from InsurTech?
Do incumbents really know their customers, how to engage with them and what their needs really are?
Who is better at innovation; banks or InsurTech?
Could collaboration drive competition and innovation?
Like FinTech, InsurTech will be an interesting scene to engage with, participate in and watch what occurs. StartUpBootCamp has its first InsurTech cohort already underway and it’s great that Lloyds Banking Group is a partner.
I was reading about Lemonade, the ‘world’s first P2P insurance business’ recently, which aims to ‘tackle the shortcomings in the insurance industry’. You might laugh at the kooky name. I’m guessing you won’t laugh so much when you know their proposition is being backed by industry giants like Lloyd’s of London and Berkshire Hathaway, amongst others. So, could they be the next Zopa or Lending Club but for Insurance?
Back to the roundtable and I think the general opinion of the room was that the insurance industry as a whole is currently around 3-5 years behind on the digital maturity curve. Over the last couple of years we pride ourselves at Lloyds Banking Group on the great progress we have made, especially with general insurance which has resulted in market leading propositions for our customers. Naturally we’ll look to continue this in 2016 and beyond. We’re also looking closely at how we can develop our Scottish Widows digital proposition and the focus we’re giving to Corporate Pensions Transformation is a good example of progress here.
At the heart of what we are all trying to do is move the dial in the ‘complex needs’ box. Digitally, customers can go to many banks, financial service providers or FinTechs, and get great digital experience; a simple way to move money or make payments, almost without thinking. However, getting to a place where customer behaviour has changed, to such a degree, that ‘swiping’ to top up a pension from surplus cash in a current account becomes a ‘habit’ is still a long way off. Even surfacing this, getting people to engage and understand what might be right for them can be a tough ask. Embedding this in our service journeys and everything we do is the vision which will help empower customers to make the most of their financial future.
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