Becoming a risk concierge

For years, many insurers equated digital transformation with “paperless.” In 2018, 2 years before the pandemic, only 12% of insurance executives reported prioritizing true digital transformation—moving toward fully digitized data and processes, with intelligent workflows spanning systems across the insurer and ecosystem partners. By 2022, this number is expected to jump to 64%.

Insurers are deploying broader products, quickly entering new lines of business, and offering more advice and service. Digitization powers not just new distribution, but entirely new classes of risk product. And as insurers broaden their portfolios, they are becoming more like concierges—helpful resources, knowledgeable across a wide range of risks, who not only can make recommendations but can provide hard-to-duplicate personal risk advice and services.

Emerging risk concierges see almost half a billion dollars more in annual revenue.

To describe insurers embracing this experiential approach, we use the term “risk concierge.” To examine the concept further—which roles it can fulfill, which capabilities it needs, and what customers expect of it—we surveyed 1,000 insurance executives and more than 9,000 insurance customers globally.

We found that offering a broader range of products and services is becoming table stakes. Most of our insurer respondents have been at least dabbling in nontraditional products, from behavior-based insurance to micro-risk and risk-adjacent products. As one executive told us, “We are no longer focused on products. For us, it is all about risk experiences.”

60% of insurers expect nontraditional products and services to eventually generate revenue on par with existing, traditional products.

Insurers seem to understand that simply pushing fixed products in the traditional way is not going to build a strong enough customer relationship for the long term. Even “category killer” specialists like the large online auto insurers are rapidly diversifying lines and coverages. At least 60% of insurer respondents expect nontraditional products and services to eventually generate revenue on par with existing, traditional products. About a quarter say those traditional products will be replaced.

Off the beaten path: Many insurers are dabbling in nontraditional products.

Cloud and AI make personalized insurance possible

Becoming a risk concierge requires a strong architectural base across cloud, artificial intelligence (AI), and connected technologies such as the Internet of Things (IoT). Coupled with open standards, this helps reduce technical debt and legacy lock-in that have been plaguing the industry for decades.

To this end, leading insurers are investing more than half their IT spend in customer-facing technologies and capabilities. And these investments have paid off both quantitatively and qualitatively, delivering up to 3 times higher growth rates, better customer understanding, and better customer satisfaction.

Download the report to learn how insurers are leveraging technology to expand their portfolios, meet evolving customer expectations, and outperform the competition.