Why are platforms the way forward for the insurance industry?

Last summer, in California, Tesla announced the launch of Tesla Insurance, offering a tailor-made car insurance, only for Tesla owners, with an average of 20 to 30% lower rates. Tesla can do this because they have all the technical data of the vehicle and the safety assistance data for their drivers. This policy can be purchased in just one minute in the driver’s Tesla Account  

March 2020 – We all know that platform thinking is key to digital transformation. 7 of 10 most valuable companies globally are based on a platform business model, like Amazon, Google and Alibaba. Platforms allow their consumers and solution providers to interact and transact seamlessly in marketplacesSo how can this platformisation trend cater to new revenue models for the insurance industry, and how will the brokers channel, still digitally lacking behind in Belgium, be affected? 

A foundation where resources can come together to create value  

The Belgian intermediary channel is uniquely positioned for success. They – the brokers – remain the contact for building and maintaining relationships with customers in a platform economy. They have the consumer’s trust and they have an enormous set of data about their customers and their habits, often from an entire family, even across generations.  

The challenge will be how to translate this customer intimacy into a platform, connecting all parties and creating value by facilitating the exchange of data. Technology will enable new insights about customers, driving tailor-made products and services on the insurer’s side. But also new insights for the intermediaries and how they can create additional value for their customers.  

A platform is a real opportunity for insurers to create this data ownership and connect all parties in the value chain. Throughout the decades the insurance industry has been protecting customers should an event take place, but now they can promise avoidance with this data capture and analytics by means of technology.  Insurers start to see the advantages of connected technologies like Nest for home insurance or Fitbit for health insurance.  

The challenge of the future will be who owns this consumer data. Both because it will give a great competitive advantage and additional value for the consumer, and because the consumer needs to know that the data will be safe and ethically used. More regulation is bound to come.  

No clue where to start or how to get there? Come and talk to us, The Glue, building platforms for financial services, together.