How to build your own digital insurance ecosystem and why?
Many people including us predicted at the end of 2020 that one of the biggest, if not the biggest theme of 2021 in insurance will be the ecosystem. It is predicted that the capability to create an ecosystem by yourself will bring a major change. With an ecosystem, insurers can be future-proof by integrating the newest technology. Next to this, insurers can create an ecosystem that is designed by themselves, which allows insurance businesses to use the tools they want to use. With this change, insurers can include the most important or valuable modules to fit business requirements, instead of getting a system that will be locked to the tools and features the system is offering.
What is a digital ecosystem?
Digital ecosystems are inspired by the ecosystem found in nature and follow principles of openness, flexibility, and self-organization. Furthermore, an ecosystem describes a network of connected technologies and applications. A digital ecosystem supports the entire policy lifecycle such as the customer journey, quotation, and claim management. All processes across the whole value chain of an insurance business can be optimized with your own ecosystem. Still, many insurers are tied to a stiff and closed system that does not allow them to link new approaches, revenue streams, or technologies. In this fast-changing market environment, businesses have to be as flexible as possible to not miss opportunities or decline market share. Next to this, customer expectations increase significantly therefore insurers must be prepared to commit to a new paradigm.
Building your own digital insurance ecosystem brings organizational, and technical challenges with it. But once an insurer settles for an API-driven foundational platform and defines clear parameters, the multiple advantages will be worth the journey.
An open API ecosystem approach can help insurers to generate new leads, have lower distribution costs, increase customer retention, improve prevention and assistance to reduce claims. Organizing an insurance business in one ecosystem makes it possible to offer a digital solution for everyone. If the insurance software is organized as an open ecosystem, knowledge can be coupled with best-practice solutions and offerings from cross-industry players in one platform.
Optimize Customer Experience
We can’t stress the importance of a frictionless customer experience enough. If you want to learn more about customer experience, check out 5 Trends shaping the insurance industry.
By increasing the number of touchpoints with customers, a digital ecosystem can give insurers a great tool to provide additional value and services. The integration of applications through APIs allows you to create a new touchpoint both before and after a policy is sold. The integration of campaign management or engagement module can offer insurers for example the ability to send out bulk messages or follow up with a specific customer group
Improve agility and system reliability
Open digital ecosystems enable insurers to improve agility and system reliability while at the same time innovations can be integrated and supported. This approach leads insurance businesses to reduce their cost and work more efficiently.
Here flexibility comes back to the page, which can be achieved by modularity as well as the ability to swap out components based on changing requirements. This shift towards more flexible solutions also forces system providers to steadily improve and define their value and role for insurers more clearly. In the age of ecosystems, we can find a greater emphasis on scaling and maintaining partnerships with external providers to remain competitive and to drive innovation.
As the world circles around data and big data analysis are changing the insurance industry, this data needs to be stored and analyzed. Keen insights through data create a deeper overview for insurers. Data analysis allows insurance businesses to inspect individual risk profiles, as well as reducing the claim loss ratios through faster and intelligent claim handling.
There has been a tremendous increase in data in recent times in comparison to the past decade. New technologies make it easier for insurers to scale and visualize data sets. Analytics platforms, business intelligence platforms, data visualization tools, artificial intelligence and the Internet of Things will change the way insurers work. There will be more useful usage-based data to come through IoT devices, which will make analytic tools even more important. Easy integration of 3rd party providers like Power BI for MongoDB will allow insurers to refine and analyze the flood of data.
Data analysis enables insurers to offer more personalized and customized solutions to customers. The ability to offer hyper-personalized interaction to customers is important for engagement and retention, which reduces costs.
Grab the Opportunity
Ecosystems will allow insurers to differentiate themselves in this fast-changing environment. Digital ecosystems and the flexibility that comes with them will be the new norm.
What are the benefits of being an ecosystem player?
- You can reduce friction for customers wishing to switch between different communication channels. This way, your customers are not frustrated.
- It is possible to provide better and more personalized solutions to customers through the data provided by different services.
- You have the potential to open new revenue streams.
Insurance companies that take the lead in creating an ecosystem will also be the leader of the market in the future. Ecosystems are not only here to solve current problems but to revolutionize the insurance industry long term.
An insurance Platform as a Service, like i2go allows you to build your own insurance ecosystem – providing you with a configurable API-Driven Solution. This IT architecture supports quick integrations of applications.i2go can help your insurance business to transform digitally to drive new revenue, improve risk assessment and enhance customer engagement. i2go’s powerful platform as a service allows you to organize multiple integrations and helps to streamline internal processes easily.
Learn more about i2gos and schedule a demo to talk to one of our specialists and see our platform in action.