InsurTech

Random thoughts: new entrants and adjacent spaces

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Last week, we launched the new IBM Institute for Business Value study on insurance retention – I blogged about it on this site.[1] One of the recurring themes in the study is the threat of new entrants – today, some random thoughts around this topic:

  • Customers are open to buying insurance from non-insurers. When we gave our respondents a list and asked “would you consider buying insurance from these providers?”, here is what the answers looked like:
    image
    The 49% banks isn’t really surprising, but all the others can safely be described as non-traditional providers.
  • When you look at online buyers only, the number for Amazon/Google goes up another 10%
  • Why? Mainly because customers feel they are easier to reach and faster.
  • How much of a threat is that? Some of the % don’t look like much, but you have to consider that in most locations, this is still a more theoretical question. We can be certain that as soon as more of these non-traditional providers actually enter the local markets and consumers get used to them, more will also be willing to buy.
  • Joe McKendrick has a good post on INN referring to a Morgan Stanley and BCG study on the topic of ecosystems. We talked about ecosystems extensively in last year’s Digital Reinvention study, and Joe cites some newer examples of insurers starting to play in that space.
  • Some of these (potential) new entrants know a lot more about customer needs and behavior than insurers do. The argument between intermediaries and insurers about “who owns the customer data” certainly isn’t helping here. Bottom line: the customer doesn’t care – they want good value at a reasonable price. If they get that from a non-insurers, they’ll go there in the long run…

[1] Note: on Thursday June 18th 1 p.m. Eastern we’ll have a Webinar with INN on the study. You can also look through he results of the Crowdchat we held last week.

Insurance Leader, IBM Institute for Business Value

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