Advances in digital technology are driving the transformation of many sectors through new business models, changes to business processes and the emergence of technology driven start-ups. Much of the transformation is data-driven. Digital technology allows organisations to capture vast amounts of data, the analysis of which could provide insights into new value propositions. Customer and social expectations are changing with an increasingly connected world making more personalised options available, with prospects of better outcomes but also increased surveillance as a downside.
There is much excitement around the potential of digital technologies to enhance the efficiency of the organisations. Being able to leverage the power of digital technology is particularly important at present, where a global pandemic is forcing us to reconsider the ways in which we work, how we interact with our customers and what our services offer our customers. Digital technology and innovative thinking about the real outcomes that customers want, can provide new opportunities.
The Innovating Insurance Project focuses on how technology can be leveraged to produce new services within the insurance sector. One area in which such services might be found is parametric insurance, which is driven by the use of sensor data and data analytics. These sensors can be attached to things, leading to the “internet of things”, and also to people through smart phones and smartbands. The analysis of these combined dataset can provide innovative new services. The key learning from our research is that we need to move through innovative product offerings (e.g., parametric insurance), to more holistic and customer-focused offerings which will involve constantly innovating the business model.
With the support of many of the UK’s leading insurance companies, INDEX (Initiative for the Digital Economy at Exeter) are exploring the implications for the insurance industry of new digital technologies and new service-based business models. We believe that future models will see insurance plans offered in combination with preventative plans, where preventative measures are identified through the use of digital technologies (e.g., data analytics or Artificial Intelligence). Offerings will be data-driven and, importantly, data analysis will take place in real-time.
The use of digital technologies to collect data from new sources will provide new opportunities. INDEX is undertaking research into the transformation of personal healthcare for the benefit of individuals through the use and management of biometric information created by wearable devices. The data that is collected by the wearable devices may enable more targeted, personalised patterns of treatment. Other benefits may arise from the individual participating materially in new markets created through the monetisation of this data.
We have begun to see a move to combination packages with the companies that we are working with. One such company has recently launched a combined pet healthcare and insurance product, which offers both insurance and preventive care plans so the companion animal receives routine attention before illness develops; the outcome is as much about prevention as recompense. A second company traditionally offers fall alarms for elderly and infirm people to notify carers of falls, connecting via a traditional call centre. Covid-19 has led them, in a very short time period, to strengthen their digital offering (where alerts are now sent direct) but also to explore ways in which digital technologies can help with prevention of injuries, moving from merely selling a product to providing a full wrap around digitally enabled service for care at home.
In response to the current pandemic, the UK government has recently announced that it plans to invest in “preventative and personalised solutions to ill-health” to help people live healthier and more active lives. It is unlikely that this will be achieved without digital technology, new ways of thinking or new service-oriented organisations providing value to customers based on their desired outcomes. Solutions to these significant challenges can be addressed through shared learning and exploration, helping to create new ways of thinking and new service-oriented organisations. Innovative Insurance could form cornerstone the of this.
INDEX, (The Initiative for the Digital Economy at Exeter), is a research and teaching centre, based in London, that provides practical insights, and measurable impact, to organisations looking to address the effects of digital disruption, and to take operational advantage of the emerging digital economy.
Dr Zena Wood Senior Research Fellow at the University of Exeter’s Business School talks about the potential of digital technologies to enhance the efficiency of organisations and transform all sectors of the economy. Digital transformation can enable new business models, changes to business processes and the emergence of technology driven start-ups. One of the Universities key research projects, Innovating Insurance, focuses on how technology can be leveraged to produce new services within the insurance sector. The project considers how innovative digital technologies enhance business model design and adoption through the imaginative and secure use of data from new and existing sources, identifying new kinds of value opportunity, and, identifying suitable customer focused outcomes.