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Digital Ecosystems and Insurance - A Winning Partnership

Sean Ringsted, Chief Digital Officer, Chubb

Sean Ringsted, Chief Digital Officer, Chubb

Economies and societies are changing at a blistering pace. Digitization, climate change, ageing populations, e-commerce, urbanization: these are among the major secular trends driving business models to adapt and evolve, and for new players to enter (and seek to disrupt) established industries.

Some trends are punctuated by major, visible innovations, like the launch of the iPhone that swiftly reshaped the mobile phone industry. Other trends advance more slowly and steadily but no less dramatically. Whether quick or slow, technology has been a constant force of change. Look at the rise of e-commerce in this century, for example. Over the past 20 years, the market share of online sales has grown steadily but surely. But compared to the dawn of the century, consumer shopping behaviors and expectations have been transformed. In even less time, the rise of the sharing economy has created new choices for consumers, while creating new opportunities and, in the age of Covid-19, new risks in the labor market. It’s been barely more than a decade since consumers were first able to use an app to hail a ride. But by 2025, according to one estimate, the global sharing economy will be a$1.3 trillion market, earning its place as a major contributor to the global economy.

Some of the biggest names riding secular trends to success have something in common: moving beyond their original core business to meet new market opportunities and consumer demands, expanding their value chains along the way. These enterprises have developed new ecosystem business models as platforms, a network of overlapping services providing consumers with a “one stop shopping,” hyper-relevant experience. And these platforms can have considerable reach and scale, consider Alibaba and Tencent in Asia or Amazon and Apple in the Unites States.

With all of this change comes new and different risks – for consumers and for the companies serving them. That’s where insurance can have an important role to play.

Society and economies need insurance to protect lives, livelihoods and assets. The essential role of insurance is the transfer of risk. For the cost of a premium, the risk you or your business face from a fire, theft, flood or accident is assumed by your insurer.

For example, if your personal data is stolen in a cyberattack, cyber insurance can help reimburse for data recovery expenses and stolen digital property, significantly easing an otherwise stressful and frustrating situation. In this way, insurance serves as a shock absorber for individuals, families and businesses. And life, as we all know, can be full of shocks. With the shift to e-commerce and ecosystems, new ways to protect risks are required and insurers are helping to develop these solutions through affinity partnerships, powered by technology.

Insurance partnerships have become a real feature of the digital economy and can be critical for success. The idea of insurance partnerships is not new. For example, insurance and banking have long enjoyed mutually beneficial relationships – often referred to as bancassurance. The offer of insurance products to bank customers has generated greater loyalty, trust and value, especially where the insurance solutions complement a bank partner’s core products and services. The same applies to many other industries, including e-commerce, ride-hailing, telecoms, hospitality and travel.

The real value of the partnership is to innovate and provide product that is dynamic, relevant and in the purchase path. Innovation is not just product- or systems-based but also partner based. This approach can unlock significant value for both parties and create an extraordinary opportunity to meaningfully improve customers’ financial security, lives and businesses. Importantly, the digital capabilities available today also means that insurance can be delivered with the quality and service that are so crucial to protect brand and customer relationships.

Rather than only thinking about insurance at the time of the policy’s annual renewal, or in the unfortunate case of having a claim, the insurance of tomorrow will play a different, and more direct, role in daily life. It becomes relevant with contextual offers for micro-products to help protect day-to-day activities – such as your taxi ride, your airplane trip, your baggage, your devices, your pets, your valuables and your e-wallet. In the Digital Age, insurers like Chubb must now provide faster, smarter, and more personalized service that is anticipatory and contextual. The service becomes the product. Digital also provides the opportunity to create new product and provide insurance to meet new risks in today’s changing environment.

To accomplish this, at Chubb, we are focused on this growing need and recognize the importance of technology as the key enabler to seamlessly deliver product to partner. We recently launched Chubb StudioSM, a true game changer in our digital toolbox that is helping us onboard new partners faster and easier. Chubb Studio is a full “Insurance in a Box” solution for partners to access our product, service and claims digitally, integrated within their own ecosystems.

Our partners are using Chubb Studio to add digital insurance options to their own suite of products and services. Chubb Studio is a combination of technologies used across our distribution partnership-builds, pulled together into one place that allows for scalability of our digital underwriting, claims and service capabilities, as well as enhanced speed-to-market for our partners. Partners can select their desired technology path-white-labeled, co-branded or Chubb-branded design options- choice being a critical element of a successful partner integration strategy.

Insurers are a worthy element of any digital ecosystem. With decades or, in Chubb’s case, centuries of rich data, expertise and a legacy of trust, insurers can be a vital and relevant partner, complementing core product and service offerings. Not only generating greater loyalty and stickiness amongst the customer base, but also offering real value and peace of mind.