What do insurance business leaders need to know about Insurance-as-a-Service?
A version of this blog was also published in Insurance Thought Leadership, which you can find here.
When it comes to the future of ecommerce, convenience is the name of the game. Back in 2017, FedEx founder and CEO Fred Smith famously said the following of ecommerce’s share of retail sales: “It’s about 10% now. It’s certainly going to grow as a percentage. But will it be half? I doubt it.” However, in less than two years, the US Department of Commerce issued a report proving that consumers do, in fact, do most of our shopping online these days - and Fred probably does too.
For brands, convenience has become a “need to have” instead of a “nice to have.” If your product or service requires a fair amount of jumping through hoops, consumers may switch to another provider that’s more easily accessible. This is a pivotal moment for businesses as a whole, but particularly in the insurance industry.
In 2021, Bindable surveyed US-based consumers about their insurance purchasing preferences and experiences. We found that 65% of consumers would be willing to purchase insurance through a non-insurance brand, and the vast majority would prefer to do so if they already trusted said brand. Why? Because there’s nothing more convenient than a brand you already trust offering up a complementary insurance product when and where you need it. Convenience is a key differentiator when it comes to bolstering customer loyalty and retention in today’s insurance market.
What is IaaS anyway?
From the perspective of a traditional insurer, Insurance-as-a-Service — or IaaS — is a mechanism by which insurers and brokers can increase visibility and distribution by enabling external partners (such as digital brands, banks, or mortgage companies) to offer insurance digitally to their existing customer base. The partners are able to generate new revenue and deepen relationships with their customers while maintaining control of the customer experience and their brand. IaaS makes buying insurance infinitely easier and convenient for their customers.
By cultivating alternative distribution channels through IaaS, insurance providers can gain access to and convert new customers where they already choose to spend their money. Meanwhile, the brands that are new to insurance gain speed to market with minimal investment in building the infrastructure to support their go to market strategy. Convenient, right?
And as we enter a period of economic downturn and a potential recession, it’s anticipated there will be a significant tightening of corporate budgets. Since marketing budgets are often the first to go, insurers should be thinking of ways to capture new customers. While customer acquisition costs (CAC) have always been notoriously expensive, IaaS provides a new way to engage consumers, through the brands and channels that they already engage with, which just makes sense. This could look like embedding an offer in an auto finance journey, a banking experience, a consumer brand purchase, or even through another insurance carrier. Opportunity to creatively solve for customer acquisition and retention is everywhere, even during uncertain times like these.
As any insurance provider knows, one carrier does not want every risk, especially in a hardening market. Yet, at the same time, no one wants to ever completely abandon a potential sale. By offering a choice marketplace via Bindable’s IaaS solution, insurers can supplement their traditional GTM strategies by creating an integrative front-end user and agent-facing experience for API-enabled products, which can then be rapidly deployed through new and existing distribution channels.
Additionally, by leveraging a Bindable-powered IaaS marketplace, an insurer can gather data on their customers to understand what they’re buying and when. Carriers can glean insights on their customers’ behaviors and tailor their products and market strategies to meet the needs of their customers.
IaaS: it’s a win-win
In today’s crowded, unpredictable marketplace, convenience is everything. Providers must rethink their approach to distribution and technology to meet evolving channel and customer expectations and their diminishing tolerance for hoop-jumping. Bindable helps carriers partner with trusted brands to create mutually beneficial, omnichannel solutions. Your brand equity doesn’t need to take a hit in a turbulent economy - so why let it?
Find out more about Bindable's IaaS offering here.