“We still face the challenge of insurance being a grudge purchase,” said Louise Portelli (pictured), founder and principal at Melita Consulting.
Portelli is chairperson at the upcoming InsurTech Summit Australia on May 05 and will be giving the opening speech at the event.
“I was very excited to be invited to the Insurtech Summit because of the critical role insurtechs play in innovating and disrupting Insurance,” she said.
Portelli is an international executive and former Big Four partner specialising in customer and digital experience in insurance. She lectures at the University of Sydney in Change & Transformation, Leadership and Strategy.
This year’s InsurTech Summit, a leading insurtech event, will explore 2022’s most exciting emerging technology. The Summit will cover hot topics, including customer experience, regtech and intelligent automation (IA).
“I’ve been really fortunate to see so much insurtech innovation, particularly in how data, AI and machine learning are being used to personalise and simplify the customer experience,” said Portelli.
“I’m really looking forward to hearing more about what exciting innovations are occurring here at home in Australia, which has a reputation for insurtech innovation,” she added.
Digital transformation remains a top priority for insurance companies. Not only is the early adoption of technological innovation the key to remaining competitive in today’s digital environment, but it is also the best way to drive operational efficiency and boost bottom lines.
Portelli said that in 2020 funding for insurtechs jumped up to about $8.8 billion worldwide.
“That’s exciting because it’s the insurtechs that are paving the way for real change in insurance,” she said.
However, said Portelli, this change must always keep the customer front and centre. The other challenge, she said, is dealing with the reality that, for many people, buying insurance is still a grudge purchase.
“The criticality of insurance for both the individual customer and the community is under-appreciated,” she said. “That means people are under-insured and that’s a community problem. It’s important that we use technology to make the sort of changes to the proposition that will result in the customer engaging more and experiencing more value,” explained Portelli.
One way to do that, she said, is rewarding customers who improve their driving or adopt a healthier lifestyle and reduce their risk. This is where insurtechs come in.
“Insurtechs are using technology to improve customer value by going beyond protection,” she said.
Machine learning models are getting better at aligning pricing more precisely to specific customer segments, said Portelli. This means more personalisation and discount pricing which she said is a great example of the type of tech innovation that delivers value.
“Tech innovation is also enabling new insurance propositions like on demand insurance and peer to peer lending - these are important because they address under-insurance and unmet customer needs,” she said.
Another challenge is how large insurers choose to collaborate with insurtechs. Portelli uses the example of big banks embracing fintech disruptors through partnerships rather than viewing them as competition.
“True partnerships require the big insurers to invest and collaborate with insurtechs in the same way with a genuine interest in changing the market by helping them innovate, develop and grow,” she said.
“Striking that happy balance between giving the insurtechs room to innovate and take risks, while supporting them with funding, capability and the right type of oversight is not always easy to achieve,” added Portelli.
However, digital transformation goes beyond insurtech, said Portelli.
“Transforming the digital experience usually requires fundamental changes to technology, culture, structure and processes right across an organisation and, for that matter, right across the ecosystem,” she said.
The InsurTech Summit chairperson said insurers and insurtechs still have a way to go in order to catch up with the significantly different, post COVID customer expectations of a seamless and simplified, digital experience.
“Routine gathering of customer data and insight needs to be a much bigger part of the insurers’ core capability,” she said.
Portelli said customer data and insight is key to driving innovation right across the value chain.
“Improving the existing core digital journeys and innovating through reimagined experiences are both critical parts of any digital transformation,” she said.
The Melita partner said these activities demand different styles of leadership and capabilities which both need to be part of the transformation agenda.
The insurtech future will still need brokers, however.
“Even with all the promising innovations that technology offers people will still want to talk to people to help them make the decisions that matter in their lives,” she said.
Portelli believes there is still an “unmet customer need” for independent and affordable advice.
“This advisory role can expand if brokers are more enabled and freed up through technology. Insurtechs can provide opportunities to reduce some of the more administrative and effort-intensive parts of the brokers’ role, so that they are able to spend more time with customers,” she added.
The 2022 InsurTech Summit Australia will take place at the Amora Hotel Jamison Sydney on May 05. This one-day event will unite Australia’s top insurance companies for a day of networking opportunities, panel discussions, case studies and presentations on strategies to remain innovative and equipped for the future of insurance. You can register here.
