In a recent episode of InsureTech Amplified, host Michael Weitz sat down with Sure CEO Wayne Slavin to discuss the future of insurance and why interconnectivity is critical to the insurance industry's evolution. Below are just a few of the key insights from their conversation.
Key Takeaway #1: While banking has evolved to allow seamless transfers between institutions, insurance remains a fragmented experience
Banks are connected for a variety of reasons.Your money can move from one place to another. Similarly, your entire financial history follows you seamlessly.
Insurance companies have historically not been connected. If you switch insurance providers, you're essentially starting from scratch – providing the same information over and over again.
"I'm going through this right now,“ shared Wayne. My home insurer is leaving my state and wouldn't it be easier to just say, you have all my home info, just move me to someone else? Instead, I'm terminating one policy, starting a new relationship, and re-submitting all my information. There has to be a more efficient way.”
Key Takeaway #2: The next wave of insurance programs will come from consumer brands
Most customers feel no particular loyalty to their insurance provider. If consumers truly loved their insurance providers, would these companies spend billions on advertising? The real affinity lies with the brands people already trust.
Just as companies like Delta, Marriott, and Amazon built successful credit card businesses by leveraging existing customer relationships, consumer brands are positioned to transform the insurance industry.
"Our belief is that the next big wave of insurance programs and businesses will be built by consumer brands," said Wayne. "If I'm a Toyota owner, that's where I want to get my financial services from."
Key Takeaway #3: Legacy insurance systems lack the digital infrastructure needed for modern, connected experiences
Insurance companies have poured billions into trying to modernize their systems to deliver better customer experience, but these projects frequently falter. Despite good intentions, most carriers struggle to replace legacy systems that weren't designed for interconnectivity.
“You go across big insurers and you ask them, you know, how many IT projects have you started, how many have you stopped, how many legacy systems have you actually turned off? And you will find that the success rate is shockingly low,” shared Wayne.
This persistent challenge isn't due to lack of effort, but rather highlights why the insurance industry needs an independent insurance technology rails network (similar to Visa or Mastercard in finance) to run digital insurance programs efficiently.
Key Takeaway #4: Interconnected insurance creates efficiencies for everyone in the ecosystem
When insurance becomes as interconnected as banking, the benefits are substantial:
- Insurance carriers gain new distribution channels without rebuilding their technology
- Brands can enhance their core offerings with insurance without needing to become an insurance company and building the software
- Customers get the right insurance when it matters
The Road Ahead
The insurance industry stands at the doorstep of a transformation. With younger consumers preferring to purchase insurance online and believe there should be more options to buy insurance directly from consumer brands, the industry needs to become interconnected. By building a better digital infrastructure, insurers can expand their distribution efficiently and offer customers the right insurances when it matters.
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