In a nutshell
- Traditional insurance providers have a fragmented, multi-country approach, which makes it nearly impossible to provide the truly unified experience that modern brands need.
- To keep pace with the digital era, insurers and brokers need to deliver more effective insurance programs to their clients at scale. But time is of the essence, and many of these players are falling behind.
- Insurers and brokers need to shift away from doing everything themselves to working with an orchestrator who can complement their capabilities.
Let’s face it: insurance has not kept up with the digital age. Consumer-led change is forcing many brands to provide seamless, global insurance experiences.
Insurance heavyweights, however, struggle to deliver that due to a number of reasons – ranging from internal bureaucracy to a fragmented insurance system to a lack of digital know-how.
Here’s how insurance companies can keep up in a swift-moving digital market.
Market dynamics: trends and opportunities shaping the digital insurance era
As brands become increasingly global – or at the very least pan-European – they’re expected to provide a unified user experience across all markets.
This is a shift from the multi-country approach that many traditional insurers have had, which results in 32 insurance factories across 32 countries in the European Economic Area, rather than a central hub or viewing Europe as one insurance bloc. Having separate entities and customer service per country makes it nearly impossible to provide a truly global experience.
That being said, customers have also come to expect an experience that is tailored to their profile and needs. They want products that fit their lifestyle and they want to access them when and where it’s most convenient.
Retailers and ecommerce brands have well-established global strategies, and now we’re seeing more fintechs and financial services companies take that approach by seeking out a unified product, platform and customer experience. Take Revolut for example, which provides the same app and user experience whether you’re in Spain or Germany.
The auto industry is also undergoing deep transformation. In addition to moving from local to global distribution models, automotive Original Equipment Manufacturers (OEMs) are looking for greater control over the insurance experience – particularly electric vehicle OEMs (think Tesla building its own insurance factory).
Historically, OEMs have outsourced insurance programs to traditional insurers and large brokers, which was then distributed physically through their network of dealerships.
Now, with the emergence of electric vehicles and advanced tech, distribution is becoming more digital and the need for uniform deployment across markets is growing.
Some insurtechs believe they can come in and replace traditional players, but the truth is that many OEMs rely on their existing relationships with risk carriers. They might have a preferred risk carrier in one country, their own captive in another and a lack of capacity in another.
In that case, it’s more about creating a patchwork of different balance sheets – and that’s where they could use an orchestration layer to harmonise the experience across different providers in different countries.
In this sense, insurers and brokers should see orchestration as a tool in their toolbox rather than as a threat to their existence.
What insurers and brokers need to keep pace in the digital era
It’s not just non-insurance companies that benefit from an orchestration layer. Insurers and brokers are also looking for ways to deliver more effective insurance programs to their clients at scale.
To meet companies’ evolving, digital-first demands, insurers and brokers need insurance solutions that:
- Span multiple countries with consistent coverage
- Prioritise a seamless, digital user experience
- Facilitate easy tech integration for partners
- Can be delivered quickly across different products and countries
Challenges that stand in the way of insurance companies delivering the best experience
Insurance companies are excellent at combining innovation and resilience. After all, most of them have been around for over a century – and the only way to survive is to adapt. The problem is that they might not be capable of adapting fast enough.
Can traditional carriers one day orchestrate embedded insurance as well as insurtechs? Absolutely.
Can they do that right now? Probably not.
We’re at a critical moment where digitally native businesses are looking at insurance as a way to generate revenue. Take neobanks for example. While five years ago it might’ve been about growing their user base, they’re now looking at the quickest path to profitability.
Large, established players lack the centralised digital systems that these tech-savvy partners need. They’re insurance-first, not tech-first. This can lead to complexities and inefficiencies when integrating them, slowing down time to market and creating a clunky experience for the end user.
This is further complicated by the fact that many risk carriers operate with a local focus – with separate entities in each country – resulting in a fragmented approach across multiple regions.
All of this makes it hard for these types of players to keep pace with the demands many companies have today.
And if you arrive on the scene as an orchestrator five to 10 years from now, you might be too late.
How orchestration can help insurers and brokers
Orchestration can help insurers and brokers deliver better insurance programs faster.
Having the right tech is just one piece of the puzzle – a sophisticated insurance solution needs to be well orchestrated across the:
- Technology (configurable platform, APIs and integration, user flows and UX, performance dashboards, etc.)
- Products (consistent coverage across multiple countries) & pricing
- Legal & compliance (localised terms and conditions, reporting to local authorities)
- Multilingual customer care & claims
- Lifecycle management & balance sheet coordination
- Partner success (regular business reviews to continuously improve the experience)
Insurance companies can outsource the entire solution to an orchestrator or pick and choose which elements of the orchestration layer they need to complement their capabilities.
Conclusion: the key to success is building an ecosystem of partnerships across the insurance value chain
While insurers and brokers have the capacity to adapt, the urgency of the current moment is paramount.
The need for swift action, coupled with the potential for enduring partnerships, underscores the value of collaborating with an orchestrator.
At Qover, for example, we launched a new OEM insurance program for Lucid across nine countries in just two weeks, demonstrating the critical importance of time to market in today's dynamic insurance landscape.
And while embedded insurance might not replace the entire insurance pie, its portion will continue to grow.
If insurance companies want to win an even bigger piece of it moving forward, then they need to shift their mindset from doing everything alone to building an ecosystem of partnerships across the value chain.
This is where embedded insurance orchestration will resonate more than ever.