The world is moving fast and innovation is at its height in seemingly every area of business - and particularly in insurance. The fastest to the efficiency end game is going to win more in terms of clients and longevity. If you don't keep up in analysis or efficiency, it's easy for a company to fall behind.
Understanding the speed of change in insurance and why speed to market is important is vital for the insurance industry of today. While it is important, it is also very difficult to achieve due to the challenges these industries face.
So let's look at what speed of change is, the problems you can encounter, and how you can improve your business. Let's dive in!
Changes in Insurance Industry: Why Is Keeping Up with The Pace So Important?
The main reason why keeping up with the pace of change in the insurance industry is so important is that everybody else is. If your competition is keeping up with all the latest technology, the customer wants and has more in-the-know talent, you are likely to be left in the dust.
Let's look at some important terms to help you understand the lingo that comes with this area of research.
Speed to Market
The idea of speed to market is clearly laid out - there's a beginning and an end goal. The beginning is where your company is right now. The middle is the race to get products to market or to adapt to new technological standards. Whoever reaches that end goal the fastest is generally going to come out with more clients and more products sold.
Speed of Change
In comparison to speed to market, the idea of the speed of change is more nebulous and dependent on many external factors. The pace of change (or speed of change) looks at how the insurance industry as a whole is changing in several different categories. Understanding the data can be a way for you to improve your company ahead of the curve.
For example, if you might realize that the pace of change in the insurance industry is very slow for online customer service. If the data shows customers want this, you can implement it before your competition. This improves retention and attracts new customers
What Are Some Examples of Speed of Change in Insurance?
Now that you have the definitions of speed to market and pace of change, let's look at some of the main components in the speed of change.
In the modern age, customs have far more choices than they did in the past. With the availability of the internet and the chance to simply drive to a different business, there are more companies competing for the same pool of customers.
Because of this, customers have been able to be more discerning, and raise their expectations. In fact, this is now considered the most important example of an area that needs change - and yet it is also one of the slowest areas in which we are seeing change. Check out some easy ways to gauge customer expectations.
Gone are the days where you have to keep track of every sale and every customer on paper. Now, you can have all of that right at your fingertips online. This also means the computer can do a lot of heavy lifting in the data and analytics areas.
You can improve pricing management and better understand the market through better data streams. Without limitations, product design and implementation can be better performed and more successful.
As with many of these factors, technology innovation goes hand in hand with things like customer expectations and competition for talent. Luckily, this is one of the easiest things to improve.
More than 40 percent of companies don't even have a website. Just by having a basic website and a social media presence, you can connect to both potential employees and potential customers.
Insurance Product Innovation
By using all of the data that you now have access to, it's important to research how you can be innovative. People love things that are new and exciting, and potential employees like to know they are secure because the company will keep up with the times.
Providing new products in new ways quickly establishes your brand and therefore your value.
Competition for Talent
This is one of the biggest factors in the speed of change in the insurance industry. Just like with customers, companies are all competing for the same pool of potential employees. And the insurance industry is already facing a talent shortage.
By getting and retaining strong employees through various methods you will have a stronger company too. As more and more employees age out of the workforce it's important for you to get millennials interested in working for you.
This one is just good practice for any business, but it can be easy to fall behind. Keeping abreast of compliance and legislative changes that impact the way your company does business will save you fines, regulatory scrutiny, and a poor image.
Why Are Insurance Companies Facing Issues Keeping Up?
Insurance companies are facing trouble when trying to keep up with the pace of change for several reasons. Let's look at two important things to keep in mind when implementing new programs to keep up.
Speed to Market Best Practices
We've just looked at six drivers of the speed of change in the insurance industry. So, it makes sense that the best practice for implementing new strategies would involve going over each driver carefully.
Depending on what you are trying to accomplish, you first have to gather data. If you are looking to implement a new product, a survey of your existing customers can reveal what they would like to see or be interested in purchasing. Let's use the example that the data reveals they want more natural disasters insurance policy options - after all, the cost of flooding is expected to triple in the next ten years.
With this data, you can then look at the regulatory information for implementing a new policy. With everything by the book, you can move on to the actual innovation. You should know your area and customer base better than anyone, so maybe there is a specific type of disaster that could happen in your area that doesn't meet most standard perils covered by other companies.
This will make you more appealing. When you head to put this product on the market, make sure to utilize modern techniques by advertising it on your website and on social media. People should be able to contact you about signing up for the policy through a variety of methods.
If this is successful, it will help current employees see that you are a company that listens and innovates. They will be more likely to stay, and if you have a referral program, they will be more likely to encourage others to apply to work at your company.
Disadvantages of Speed to Market
Additionally, there are disadvantages even when utilizing all of the best practices that can make one hesitant to pursue change. When you're working to quickly implement new products the process can be rushed. At any stage, rushing data or implementation can be costly.
It's vital to find a balance between speed and quality. While providing coverage for some more unusual types of insurance might make you seem fun and innovative to some, it could be less effective at actually gaining you new clients.
How Does Pace of Change in Insurance Impact Clients?
For the majority of your clients, the pace of change is a welcome improvement over past practices. This is especially because pace of change involves listening to what clients want to experience. They are more likely to continue to be your client if they feel heard.
However, it is important to keep in mind your older customers may not be used to the online implementation. To keep your valued older customers, keep traditional methods of availability by phone, and even physical locations, an option for them.
What Else Should You Know About Insurance?
Now you understand how the speed of change in insurance works - and what you can do about it. One of the most important factors we've discussed is market research. There are companies out there that compare different types of insurance so it is a good idea to look at one to see how you measure up.
And that's where we come in! Compare rates and see how customers save time to find their perfect-fit insurance. Check us out today!