The coming shift to insurer ecosystems presents a vast opportunity for value creation.
Tesla has already changed the rules of the transportation and energy industries. Up next might be insurance. Earlier this year, Tesla announced that it would offer lifetime auto insurance bundled with the cost of the car. The company is betting that its improved machine learning will bring down the risk profile of its entire fleet of connected cars.
Tesla’s announcement is only one of the many examples of how the traditional insurance model is poised for change. Traditional insurers have long relied on two customer touchpoints: at the time of sale and at the time of claim. As the world gets increasingly connected, the current data void between these two touchpoints is about to be filled.
Insurance firms are already shifting in this direction. In the past, they captured data as a one-time event, using it to statically determine customers’ risk profiles and premiums. Today, they are embracing connected technologies, especially in the auto and health sectors, to offer personalised and dynamic insurance premiums to their customers.
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