Once upon a time, there was the web.
1989. Tim Berners-Lee is a researcher at the European Center for Nuclear Research (CERN). His goal: Develop a solution to share data with other scientists around the world, in real time. He sets up a system of "tags" that computers can reprocess into forms, symbols and texts to make pages visible to all.
This technology is HTML. The World Wide Web was born.
Today, the number of websites online is estimated at 2 billion. This explosion is due to the SaaS (software-as-a-service) technology, which appeared in the 2010s. Indeed, during the first 20 years of the web, each website was “hand-written” by expert developers - growth was slow... Then with blog services (mySpace), followed by SaaS (Shopify, Prestashop, Wordpress, WebFlow), the website industry was freed from the complexity of code - everyone could start creating a website!
Our belief: the same thing is about to happen in the insurance industry.
The Inflection Point for the Insurance Industry?
Why should the number of insurance offers explode?
Just like creating a website in HTML in the 90s, putting together an insurance program today is complicated.
Indeed, it takes a great deal of technical skill to develop an attractive offering despite the limitations imposed by regulation and the financial balance of a program. It also requires a certain level of funding to reach a certain volume of sales that allows for pooling, in addition to all IT and HR investments that operating a program entails.
Last but not least, it requires a lot of time. The average delivery time to take a new offer to market is estimated at 6 months.
The sector actually got so complex that it even saw the emergence of a whole category of specialized professionals: brokers.
These experts remain the only ones able to navigate the regulatory and financial complexity of insurance to create solutions adapted to all these projects being launched on a daily-basis.
And building insurance products is only the beginning. Developing the technological tools to operate is also necessary.
In recent years, brokers have been forced to develop their own tools in order to absorb the technological legacy of insurers and meet the needs of demanding customers. Complex API integrations, cumbersome and non-customizable underwriting journeys, technological dead ends using prehistoric languages like COBOL or AS-400, etc.
In short, the amount of limitations insurers have amassed along the way is vast. They have become too much of a burden for brokers whose core business is not technology.
It would be better left to tech entrepreneurs. But given the extraordinary complexity of the sector, it’s taken them some time to enter the market. Indeed, it is only over the past 5 years that the Insurtech sector has started to experience the growth we know. Even so, the total amount of venture capital investment in insurtech is estimated at $43 billion USD over the period 2016 to 2022 - more than 7 times less than the Fintech or Healthcare spaces. (Source: "Tech State of European Insurtech 2022" report ft. MAPFRE, Dealroom, MundiVentures)
But the tide is turning. Solutions are being developed that put brokers back in control.
Like the web, SaaS services are about to radically change the way we think about expertise. In the web, it used to be writing the right HTML tags. Now, expertise lies in designing the best customer experience as the emergence of new professions shows, such as UX/UI Designer, Copywriters, Product Managers, etc.
We are about to witness the same shift in expertise in insurance to refocus on the customer experience.
Claims experience experts, AI prompt masters for customer assistance, preventive technologies, ... insurance is on the verge of an inflection point, which will be enabled by SaaS and its ability to liberate creativity from its technicality.
The New Battlefield
In an industry where the insurance product is becoming commoditized and access to SaaS technology is becoming easier, new differentiation levers arise.
In the brokerage space, I believe the most important are the following:
- Time-To-Market Optimization: The world is speeding up. Competition is getting stronger. Patience is getting shorter. Being in tune with the market today means launching a program rapidly.
- Continuous iteration: Finding the right solution for a customer is a process. No success is possible without iteration. Technology allows you to quickly launch and gather data-driven feedback from the market to adjust as you go along. Both on the insurance product, and on the customer experience. It's time for insurance to start generating truly actionable data and to leverage it continuously.
- Operational optimization, to invest more on customers: Automating low-value tasks allows teams to focus on growth and customer service. As insurance professionals, we operate on huge volumes but relatively thin margins. Optimizing the management of contracts and claims, automating AML-CFT controls, making auditing more fluid, etc. are all technological solutions available to gain efficiency and accelerate production.
In brokerage, as for the web, conceptualization is now the key to success. It lies in our ability to build differentiating experiences that protect customers in their dreams and projects. One thing is certain, with the right IT infrastructure, the Golden Age of Brokerage is only just beginning.