Insurance providers, perhaps more than any other industry, struggle to remain relevant in the eyes of consumers.

Customers interact with providers only when they file claims, and when it comes to health insurance, hospitals file on the customers’ behalf.

That leaves the industry, much like hotels are with Expedia, ripe for disruption from online aggregators and startups, which is why carriers should provide competitive experiences along with competitive prices.

Experience as a competitive advantage is becoming more prevalent every day. A Pew Research study, in fact, found that 53 percent of technology stakeholders believe gamification will play an important role in business by 2020.

For employers, it encourages the right behavior from team members, such as when sales teams hold incentive contests. With consumers, there’s a surplus of data available from fitness trackers and other technology, so pairing this data with consumer claims and other available information can help carriers incentivize healthy living and gain brand affinity.

Currently, insurance companies are not set up to compete on the experience level. When someone has a great experience idea in mind for an insurance company, the technology gap that keeps such an initiative from launching presents a major obstacle.

More often than not, carriers spend the majority of their efforts managing IT complexities rather than delivering the best use cases, which is what started the project in the first place.

The opportunity insurance companies have is to offer a product that hides IT complexities and allows the business to build contextualized, quick-to-market experiences that engage users and distinguish providers from their competitors.

Challenges in gamification

It’s important to be a recognizable brand, but how many people do you think really know the difference between Aetna and Assurant?

Technology gives these providers an opportunity to stand out in the eyes of the consumer. Providers have access to proprietary information about claimants who are starting to don wearable health trackers. When carriers analyze the information from wearables, they can monitor step counts or heart rates and examine what might have affected those outcomes.

Public data like the weather, traffic, or geographic terrain can be used to provide more personalized experiences. It would be great to reward consumers for every 10,000 steps they take or inform them of insurance options the instant they walk into a chiropractor's office. It’s also helpful to understand how major life events, such as childbirth, can affect changes in habits or insurance add-ons.

Predicting and catering to these situations would be great, but implementing the solutions takes a massive spend in IT complexities alone. Insurance is a traditionally conservative environment that isn’t designed for immersive real-time interactions with customers. Insurance companies are set up for processing, while their IT departments focus on complying with security and privacy requirements. One misstep could cripple an organization.

But if IT can innovate tools that help marketing and other departments quickly launch use cases for the customer, experiences can work to make an insurance provider more than just a pipeline or commodity.

Decreasing time to market in launching new products and services is large providers' competitive advantage. Instead of waiting to be disrupted by the tech companies, they can become complete end-to-end solutions simply by leveraging resources to enhance implementation.

Changing the game

IT plays an invaluable role in insurance organizations. These departments typically work with large data sets, queries, and reports in the backend. Any of the ideas above takes a minimum of 12 to 18 months to get to market, and tech disrupters will get there first.

But these tech disrupters don’t have access to the archives of data necessary to truly pull off an experience for consumers. The IT departments at insurance providers certainly do, and normalizing these data sets in a secure method with tokenization and synthetic IDs is much easier for insurance providers.

It’s the same technology used in the payments space, so applying these techniques to insurance can provide a lot of invaluable insight, including how to utilize cloud data for greater flexibility.

The only pieces insurance providers are truly missing to disrupt back are the presentation layer and the mentality of creating an experience quickly and tweaking as they go. It’s all about use cases, and insurance traditionally catered to IT as the end users in a data-rich environment. That all needs to change and focus on the consumer.

If insurance providers decouple technology processing responsibilities from experience creation responsibilities, they’ll become unbeatable. You just have to decide whether you want to be a commodity that competes on price in the background or a true end-to-end consumer experience.

One is a data processing center with very little customer interaction or focus, while the other is the future of business in every industry. Choose your role wisely, and prepare for an epic quest either way.

Gerti Dervishi is vice president of operations and finance at Flybits, a cloud-based context-as-a-service solution with offices in Toronto; Redwood City, California; London; and Singapore.

Instant Insights /

The insurance industry is on the brink of disruption

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