Technology and trust could be seen as two of the biggest challenges facing the insurance industry with an increasing number of consumers moving direct and some even identifying a lack of trust towards insurance brokers as a reason to do so.
This, of course, is opening the door for insurtechs.
“Brand and trust are still really important for consumers,” Imran Ahmed, insurance partner and Oceania financial services performance improvement leader at
EY, told Insurance Business. “However, there will be some segments of customers who are more price sensitive who might be willing to trade that brand and trust for a better price.”
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Through lower prices, emerging firms are garnering attention – and if they’re able to back up those eye-catching prices with positive reviews from existing clients then customers are less hesitant about making a switch.
Word of mouth and social media are thought to be particularly important in this area, potentially giving smaller firms with slimmer budgets a chance to compete with their bigger rivals. Ahmed noted that the changes “play into the hands” of insurtech and fintech firms as customers are moving away from simply looking at big TV advertisers; and, with positive social media and word of mouth recommendations, are more willing to trust businesses outside of the traditionally well-known brands.
However, as clients look to these online solutions, they have to be assured that their data is safe.
“Cyber is a bit of a threat,” Ahmed said of the risks facing insurtech firms. “If you look at the websites of many of the companies that are offering these propositions and services they are making a much bigger deal now about how they protect client data.
“As long as people have confidence around the right thing being done to protect their data then there will continue to be an upward movement.”
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