There’s no doubt 2022 has been a challenging year for the InsurTech community. While we’re certainly not immune to the industry headwinds, thanks to our dedicated team at Bindable and an amazing group of business partners, we’re extremely grateful to have had another year of success. Here are some of the highlights from the past year:
I believe our success at Bindable is a testament to the strong group of individuals we’ve banded together. Our team is dedicated to honoring commitments and always keeping the best interests of our partners and colleagues in mind. We are constantly looking for efficiencies to improve productivity for the benefit of our clients. Plus, our team is made up of seasoned industry veterans, so we’re building tech using the insights and knowledge of people who understand the intricacies of our industry. I’m very proud of what the team has accomplished over the past year, grateful to be surrounded by such wonderful people, and excited to do more great things together in 2023.
I also think our success can be attributed to the problem we’re solving for in the market. The insurance industry is experiencing a hardening market – premiums are increasing and carriers’ capacity for most types of risk is decreasing. It’s more important than ever for insurers to access profitable customers through preferred channels and by implementing new approaches. As such, both our SaaS and IaaS capabilities are uniquely positioned to enable providers to improve customer acquisition and retention in a very competitive market.
As we head into 2023, I encourage everyone across the insurance ecosystem to reflect on the challenges we’re all facing, and think of new and innovative ways to help solve them. Here are some things I think leaders and decision makers in our space should keep in mind to not only help their own businesses, but to fulfill our purpose as an industry to help those when they need us most.
Considering the fact that people are exposed to between 6,000 and 10,000 advertisements a day, customer attention has virtually become as valuable as currency itself. The competition to get noticed and stay visible is only becoming increasingly more difficult. But if visibility fuels success in today’s world, how can those of us in the insurance industry without huge marketing budgets like GEICO – who spent the most out of all auto insurers at $2.07 billion alone in 2021 – break through the noise? It will take doing things differently to understand where, when, and how customers want to shop for insurance, and then meeting them there.
As insurance providers, we actually have a good thing going for us. We are different from other financial service areas in that our whole purpose is to offer stability and prevent financial stress for people, not cause it. However, I’d be willing to bet if you asked the average American which brands they love the most, an insurance company would rarely, if ever, make anyone’s top choice. Instead, you’re more likely to see brands like Apple, Costco, Amazon, or Netflix. What are these brands providing that insurers aren’t? Differentiated experiences.
Our own research has found that 79% of consumers think that most insurance providers are the same, while 69% admitted that if asked, they could not describe the differences between insurance companies’ policies. In my opinion, insurers have a huge opportunity to better demonstrate value to consumers; to develop deep, long-lasting relationships by meeting more of the needs of their customers whether or not they manufacture the product. While innovation in our space has been very tech-driven, how you position and market your products should be as equally as important as the tools you use to distribute them.
No insurance company can be all things to all people. But that doesn’t make it any easier to turn away customers. That’s why offering choice is of utmost importance to any carrier that wants to remain visible.
Think about those first days of insurance commercials where carriers were willing to advertise rates from competitors to ensure consumers that they were getting the best price; we all thought that was crazy, right? Well today’s equivalent of that is offering consumers the chance to buy directly from competitors online. Carriers who offer choice can monetize their customer base by meeting the needs of the customer even if they can’t directly, and yet still maintain their relationship with that customer so that they can engage with them in the future, improving lifetime value.
In the case where a carrier doesn’t write in a certain state or offer certain products (for example, a monoline auto insurer doesn’t offer homeowners insurance), offering a competitor’s product goes beyond keeping a customer on your balance sheet. Knowing what other products your target customers are buying, or seeing that you have a lot of interest from a certain state or demographic, enables you to test and learn. Meaning, the data you gather from customers’ buying preferences and selections can inform how you go to market yourself, whether that’s expanding into new states or building and adding new products to your portfolio.
Choice is also especially relevant in today’s hardening market. Carriers are rethinking the risk they want to take on, and may have to turn away potential customers. But if they offer choice, while they might not have the capacity for a certain type of risk now, they can still offer options for that customer while maintaining their relationship with them. So when the market does change – and it will! – that carrier can offer relevant products to the customer when it makes better business sense for them.
It is also in the best interest of carriers to look outside the industry to meet customers in new ways. Afterall, if someone trusts their real estate agent to sell them a house, or their banker to secure them a loan, wouldn’t it be advantageous for an insurer to distribute their products through these channels as well? These resources already have well-established relationships with their customer, and the customer already trusts them with important life decisions. So, wouldn’t the customer trust them enough to buy insurance through them too, especially when it’s sold at relevant moments (e.g. securing home insurance when buying a house through your real estate agent)? Partnering with insurance adjacencies and leveraging API technology to embed insurance into relevant experiences is a crucial element to creating differentiated experiences that meet the needs of modern consumers.
Inflation. Natural catastrophes. A “tridemic”. Americans are going through a lot right now and are having to make some tough choices when it comes to where and how they spend their money. And while most people may instinctively think to cut back on non-compulsory insurance products (pet, renters, flood, etc.), or even slash the amount of coverage they have for their homes and cars, such coverage plays a large role in protection against life-changing economic burdens. That’s why I think it’s critical for insurers to educate the general public on the importance of finding the right coverage, focusing on and showing the benefits of safe-guarding their financial lives.
This also gets down to our duty as an industry to help close the protection gap, which measures the difference between optimal insurance coverage people should have and the actual coverage they do have. We must think creatively and innovate strategically to remove barriers and enable people to secure the right type and amount of coverage for their needs.
Providing digital experiences, personalized coverage, new products for emerging markets, and convenient ways to buy all bring providers closer to our goal of supporting anyone and everyone when they need it most, while also helping the insurance industry grow and innovate as a whole. Closing the protection gap will only come from a combination of innovative technology, strategic partnerships, and creative experiences.
Insurance in its simplest form is built differently than any other sector. We serve an important purpose in providing security in the midst of uncertainty and making loss more manageable if and when it happens.
But what’s lacking in our space is true customer connection. Rather than focusing on “disrupting” the industry, it’s time we focus more on how we enable our customers to get the protection they need. Diversifying product offerings, engaging in partnerships for alternative distribution, and solving for the coverage gap are all ways insurers can creatively and strategically foster customer loyalty while fulfilling our promise to take care of others when they need it most.
Interested in seeing how we might be help you reach your business goals in 2023?