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Many organisations today are finding themselves in the centre of a digital revolution where the use of technology is enabling people to adapt, learn, create new solutions and drive change, particularly within the insurance sector. Aviva, is one organisation putting digital first and exploiting the use of technology within their business.  They have recently launched the AvivaDrive app - a first of it’s kind, allowing drivers to test and monitor how safely they drive, making them save money on their car insurance. The digital data collected, enables Aviva to better understand their customer, so they can personalise products and price them more accurately according to the risk.

Within this competitive industry, our clients are repeatedly asking us about new, innovative ways they can embrace the future, taking into account the potential connectivity technology available and the impact, whether positive or negative, it will have on the market. What they’re concerned about, and quite rightly, is what path to take? With so many new products appearing, and indeed so many new businesses starting up to fulfil this need, who should they trust, and what should they do?

Simple; Research for Innovation. Undertaken with the right techniques, research to understand customers can inspire key strategic new products and services.  From the work we’ve already done in this space, we see four clear underlying messages, valid across all aspects of insurance.  

1) Let’s not call it insurance.

So you want customer loyalty? Customer stickiness? You want your customer to really engage with your brand, and to share their differentiated experience with their friends and colleagues? Most people do not get excited about their insurer. So create a new brand, a new offer, where the focus is on things that your customer does care about, that also includes insurance to complete the cohesive offer.  For example: pet insurance. Why not offer a complete turn-key pet health service, including pet-wearable, optimised pet-food direct to your door, and basic preventative treatments? i.e. www.wagglepets.com from RSA More Th>n.

2) Don’t confuse your business benefits with customer benefits.

As a home insurer you’re probably most concerned with water leaks.  Damage due to prolonged water egress is often the biggest claim for households. But does the customer worry about this? Typically not, they worry about burglary and theft.  So, the ideal product would be one that prevents burglary whilst at the same time monitoring water egress.

Unpicking the unmet needs in this way can also be done for vehicles, pets, or for any asset that is insured.  Clearly stating the needs of the various stakeholders, and understanding what concerns them most, does highlight as-yet-unsolved opportunities, and potentially killer solutions.  A successful connected insurance product is therefore one that the customer immediately engages with and benefits from, as well as one that brings longer-term benefits to the insurer in reduced claims cost. An example could be a home monitor product/service that offers immediate peace of mind. This is not a bespoke, specialist-fit burglary system, this is an ultra-low-cost device offered free of charge by their insurer. It just so happens to also be monitoring humidity around their mains water pipe. The product is (for now) a fictional one, but the fit to both business and customer is clear.

3) One size fits all. Perhaps.

Considering each use-case in isolation is perhaps the wrong approach.  Once the opportunity is clear, and the technology assessed for its suitability, there are often clear synergies.  In reality, there is a practical limit to what tech can be incorporated into a small ultra-low-cost solution.  So this actually isn’t a hardware-led challenge- the focus of effort is instead on the software algorithms, and sensing parameters that can be used as sufficiently reliable proxies for whatever it is you really need to know. 

Designed correctly, your customer offering could actually contain the same electronics across all of your market sectors, irrespective of the actual application.  Spreading the development cost across all your customers makes for an easier ROI calculation.  It also potentially enables your customer to decide where best to implement the service offering.  Do they worry more about their house security or car security? Why not let them decide? Example- a simple monitoring ‘puck’ with acceleration sensors could be used for predicting imminent issues with your home boiler, or used on your car to monitor harsh braking events. Different problem, same technology solution. Exploring all relevant use-cases for your customers enables efficiencies to be maximised, and could mean you’re able to offer benefits to all, whilst only paying for the development of one platform.

4) To really tackle the opportunity, you need scale.

No user trial of 100 new devices is going to give an insurer enough faith to invest more in their disruptive new proposition.  With the onset of the Internet of Things, scale is key.  There is no substitute for real people using real devices in their real lives. For truly game-changing solutions we need trials with 10,000 people or more. But I hear you say “This is no longer a trial, this is a launch”.  OK, so launch in high volume. Easy. Small problem, no sane business will likely jump into this with such a gung-ho approach. We’re talking about seasoned risk analysis professionals here. High-risk doesn’t work. So make the devices ultra-low cost so that you can afford to scale quickly, iterate and tweak, and perhaps fail. For no more investment than you were already planning with the over-priced, over-featured big-box approach.  Ultimately, with 10,000 users streaming feedback to your business, allowing you to observe their actual usage of the device, you will learn more than ever before about your customer.  So even if you elect to pause or bin that specific proposition development, you will do so from a very well informed position.  I don’t call that failure.

So what now? Think big and yet small.  Boxes of kit that cost £100 and need specialist installation are not your answer.  They are tiny incremental steps from the failed attempts to leap to truly mass-market service offerings.  Start with what your customer may engage with. It’s almost certainly got to be so low-cost you can offer it free-of-charge to them. The numbers will only ever work if you can offer scale, and gain sufficient insight from your customers actually using it.

So think differently.  It needs to be disruptive and different and brilliant. And that’s where we come in because that’s exactly what we do.

To find out more, please contact Tom Lawrie-Fussey at hello@cambridge-design.co.uk.

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