Digital disruption has brought about greater innovation to all industries — whether in banking or in currency, communications or trade. And while it has ushered in a new era for insurance, there has been a downside for the sector that has meant they have had to rethink the whole model.
Speaking to delegates at the World Economic Forum in Davos, Switzerland, in a session titled ‘Shaping the Future of Financial and Monetary Systems,’ Mario Greco, CEO of Zurich Insurance Group (ZURN.SW) outlined how “digital disruption is completely changing insurance and it’s all driven by customers.”
“Previously, there was high retention and there was a certain stickiness in the industry as for centuries it was expensive [for customers] to move in and out of an insurance company. However, that [customer base] is falling down dramatically as digital disruption is making it possible for customers to finally find . alternatives and choices,” he added.
He also pointed out that now insurance companies deliver services that extend beyond insurance in order to retain customers by adding extra value.
According to a Deloitte in a recent report on the insurance industry, “we are currently seeing a technology-driven shift away from this traditional, largely reactive model to a more proactive approach which aims to merge established insurance conventions and technology.”
It says that even within three years time, insurers will generate over 30% of their business from service-based offerings over product-based items.