People perceive health insurers as the most legitimate entity to become aggregators of these services, regarding the Cegedim Insurance Solutions and Argus de l'Assurance survey of 1,000 policyholders representative of the French population, conducted in March 2020. They could therefore position themselves across the entire healthcare pathway as integrators of all players, such as pharmacists, doctors, paramedical establishments, etc. To achieve this, insurers need to undertake an Open Insurance strategy.
Viewing digital as an innovation driver
To take the Open Insurance route, insurers need to make as much a technological as a cultural shift.
In a more open market, it’s necessary to rethink how you conceptualise products and fully integrate digital challenges into them. Rather than drawing on sequential design cycles, the idea is to properly involve all of the stakeholders from the very start of projects. How? By investing in the digital training of teams (marketers, actuaries, sales staff, etc.), as well as by integrating IT architects into the teams that design product or service offerings. As such, the product and service will become inseparable from IT support, and the distribution of insurance products that embed the technology necessary for their use (plug and play) will become easier. Even before the design stage, the project teams need to bear in mind the new challenges, namely: online pricing, online distribution, content exchanges via electronic flows, the partners with which they interact, etc. In other words, digital needs to become the foundation of the company’s strategy.
Rethinking your architecture
The traditional players’ information systems do not currently contend with the issues of omni-channel capability and simplified interfacing via APIs. Implementing these changes involves upgrading the architecture of your information system, which requires substantial investments. This upgrade needs to be gradual and insurers can focus on the APIsation functions open to the outside world initially, such as distribution for example. Subsequently, they can gradually turn their attention to the internal architecture of the information system (management, accounting, etc.) and make APIs an IT standard. Although very costly, this change is an unavoidable prerequisite. Indeed, the disruption that the banking world has experienced and that the insurance world is preparing for was only possible due to the advent of APIs. Without an information system capable of integrating this new technology, players on the insurance market, whoever they are, won’t be able to make the switch to Open Insurance and will run the risk of taking themselves off the market. By rethinking their architectures, insurers will bolster their distribution model in order to draw on a model driven by partnerships. Increasing the number of relevant partnerships is one of the key factors of success in the Open Insurance strategy. However, achieving this increase is only possible if the information systems are open and easy to access (open API model). This technological revolution paves the way for a new business vision and gives traditional players the opportunity to capitalise on business knowledge and brand image to maintain their place on the market.
Winning the customer’s trust: the key success factor
To provide personalised services, insurers need to further analyse their customers’ behaviours by gathering new data. Although the General Data Protection Regulation (GDPR) provides a legal framework for the use of personal data by insurers, the latter need to be transparent about how they use this data. Customer data can only be captured with their explicit consent and for a common benefit.
The survey conducted proves that in this case, if customers understand how they can benefit from sharing their data, 84% of respondents are prepared to share it with their insurer, which they see as legitimate and which they trust. The added value for customers isn’t the only factor to take into account: they also have to be informed that their personal data will only be used for private purposes and won’t be resold as is to third parties. Skilled in customer relationship management, insurers need to communicate and educate customers to create a feeling of intimacy and trust. This means customers will agree to share their data on two conditions: trust and the perceived benefit. Insurers will then be able to position themselves in a large section of their customers’ “protection” field with the support of partners, make their relationship with customers a lasting one and, under this rationale, use a larger set of data for shared purposes.
If you are interested in this topic, the Cegedim Insurance Solutions team is at your disposal to answer to all your questions.