The COVID-19 pandemic has accelerated insurers’ efforts to engage more effectively with customers, opening up ideal opportunities for insurtechs, EY says.

The consultant’s Asia-Pacific and Oceania Insurance Leader, Grant Peters, told insuranceNEWS.com.au that COVID has sped up changes in consumer demand and buying behaviour in insurance, “just like any other industry”.

Customers want easier ways to interface with insurers, which are digital and more flexible, Mr Peters says.

“They also want more flexible and bespoke products and solutions that are more fit-for-purpose and in the moment. Things like usage-based or needs-based insurance and on-demand insurance.”

Mr Peters says the trend was there before COVID, but it’s accelerating and will continue to do so.

“The industry will look for new ways to engage customers. It needs to understand the customer base more, with more customer segmentation and more customer research.

“In many ways that’s a perfect opportunity for insurtechs to either go to market directly themselves or pair up with existing incumbents.

“Insurtechs have shown their ability to focus on a particular customer segment and go deep to understand the needs of that segment, and then help design value propositions that line up.

“A lot of the examples have been targeted at young people or certain industry sectors that need insurance support.”

Technological advancement is key, Mr Peters says.

“The industry will need to think about new ways of using that technology to engage with customers and provide new insurance offerings.

“It’s a prime example where insurtechs already contribute, but can look for ways to embrace that new technology and bring it to the insurance industry. That’s where the insurtech pedigree can really help.”

It’s a process with no end date, as technology is continually improving and developing and nobody knows for sure what the next five or ten years will bring.

“We will never get to the end,” Mr Peters says. “It’s a continuous exercise for the insurance industry to think through what technology can mean for consumers.

“But it is important, and I think insurers would agree with this, to also get that external lense and input from outside the industry on a continuous basis and that’s what insurtechs or bigger tech platform owners can bring to the insurance industry.

“Some incumbent insurers are providing more capacity – human capacity and capital – within their organisations to focus on this.

“But there is a broader open mind and acknowledgement that they do need to bring some insight from outside the industry.”