A playbook is a bridge of understanding. It links carrier “self-knowledge” about focus and capabilities with external realities of target markets, customer motivators and purchase triggers. It is the “in-between” space where an insurer finds a business model that will fit both the company and the customer.
What are insurers missing if they don’t have a digital playbook?
Market vision and digital strategy are vital to making educated forward-steps to Digital Insurance 2.0. Without a playbook, insurers may be lacking this crucial lens, finding themselves wandering in the Insurance 1.0 wasteland.
Just like in the realm of sports, the business “game” is dramatically changing, driven by new customer expectations, new innovations and new competition. Today’s business environment is more complex and dynamic in a world of constant change. Business strategies based on a multi-year plan revisited annually are no longer effective. The marketplace is moving much too fast. Customers’ expectations are being set outside the insurance industry. Competitors are new and innovative. Market boundaries are radically shifting. Playbooks must take all of this into consideration. They capture a picture of a new market puzzle and provide insight into how an insurer’s model and products fit … or don’t … leading to the potential development of a new business model and set of offerings.
Digital playbooks are designed to provide a path from Insurance 1.0 to Digital Insurance 2.0, focused on new products and services that align to new customer expectations and needs in a way that shifts from something that is sold, to something customers want to buy. In Majesco’s thought-leadership report, Digital Insurance 2.0: Playbooks for P&C Insurers to Win in the Digital Age, we not only discuss the development of digital playbooks, but we also examine the playbooks of recent Digital Insurance 2.0 entrants to the P&C market to provide insights for insurers developing their own playbooks.
In our previous P&C Playbook blog, we discussed the Digital Insurance 2.0 Product Framework and how it is useful in helping insurers to build their own playbooks. To help insurers jumpstart their playbooks, we have leveraged our key research findings, assessed the new business models and products that have entered the market via InsurTech, and looked at them against two frameworks that provide guidance for playbooks development. Below is an example outline that any insurer can use to develop and fill their own high-level digital playbook framework as a precursor to developing a Digital Insurance 2.0 model playbook.
Digital Playbook Framework Questionnaire
- Business Model Focus
- What market segments are you focused on? Are they new, existing, under-served or unserved segments?
- What potential products do they need and want?
- What do you see as your key features and differentiators within the market?
- Product Characteristics
- What is the intent of the product? Is it indemnification or risk prevention, avoidance, or reduction, or both?
- Describe the product's visibility. Is this a standalone product or "invisible," possibly embedded within other products, services or an ecosystem?
- Describe the breadth of coverage. Does it cover multiple risks or items or is it specific coverage of a risk, item or event?
- Describe the product's permanency. Is it continuous coverage for a contractual period of time or variable, episodic based on demand or need?
- Describe the customer journey, needs and expectations.
- Impacts on customer behaviors
- Ability: Does the product/service have special capabilities that streamline and simplify processes for customers?
- Motivation: What, specifically, will motivate prospects to purchase and continue to engage with it? List any and all motivators.
- Triggers: Does the product contain triggers that will prompt users into action that will enhance their experience and/or mitigate risk?
In order to assist insurers to understand what their results may look like, Majesco profiled several new product offerings in our Digital Insurance 2.0 thought leadership report. Below are two examples of recent market entrants and what their framework answers may have looked like. Two of the companies profiled were Neos, and NEXT.
- Bodenham, Digby, “Neos home insurance review,” BoughtbyMany, February 8, 2018, https://boughtbymany.com/news/article/neos-home-insurance-review/
- Company website, https://neos.co.uk/
- Lomas, Natasha, “Neos launches IoT-powered home insurance UK-wide,” TechCrunch, November 6, 2017, https://techcrunch.com/2017/11/06/neos-launches-iot-powered-home-insurance-uk-wide/
- Barzilay, Omri, “With $35M In New Funding, Next Insurance Takes A Personalized Approach To SMB Insurance,” com, July 6, 2017, https://www.forbes.com/sites/omribarzilay/2017/07/06/with-35m-in-new-funding-next-insurance-takes-a-personalized-approach-to-smb-insurance/#481875f24200
- Crunchbase: https://www.crunchbase.com/organization/next-insurance#section-overview
The responses that an insurer gives to these questions will likely be honed over time as they “test and learn” in a changing market. The framework is continually updated to reflect both changes in the situation AND capability improvements.
Digital Insurance 2.0 is about creating a digital insurance model with capabilities in these unique product model frameworks. That is why it is imperative that insurers understand their product framework PRIOR TO applying digital capabilities. In many cases, insurers have taken a backward approach to digital implementation, prioritizing capability development before understanding its value to the overall digital model and how it will meet or exceed the target customer’s needs and expectations. A framework-first approach ensures that investments are necessary and tie directly into the model’s value proposition. It also ensures that all digital efforts aren’t duplicated and that they fit neatly into the overall Digital Insurance 2.0 strategy. A useful playbook is one that acknowledges the strengths of the players…in this case, all available digital capabilities.
Cloud Business Platforms — Turning the Framework into Opportunities
Ideas rely upon capabilities. Insurance offerings are obviously constrained or enabled by the digital readiness of an insurance company. To make the playbook work, there must be a foundation in place. That foundation is a cloud business platform.
A cloud business platform opens doors to the incubation of ideas, with rapid test and learn and rollout. It allows new business models to be launched into the market in a fraction of the time and cost, leveraging integrated content, data sources, and innovative capabilities from InsurTech technology companies on a cloud platform that enables speed to value. It creates a greater amount of freedom to innovate in product development, easier business configuration, and exponentially better data gathering and digital service. Digital efforts provide speed to value, converting ideas to offerings while opportunities are fresh.
A new generation of insurance buyers with new needs and expectations creates both a challenge and an opportunity that a platform-based Digital Insurance 2.0 business model can incubate, launch and grow. The time for plans, preparation, and execution is now. Insurance leaders should ask themselves: Do we have a strategy that considers transformation of both the legacy business and creation of a new business for the future? How should we prioritize? Where are we focusing our resources…on the business or on the infrastructure? For a deeper look at how playbooks can help carriers focus on effective digital development, be sure to download Digital Insurance 2.0: Playbooks for P&C Insurers to Win in the Digital Age.