This piece is by James Hall, EMEA Regional Vice President, Doxim and it looks at the impact of Web3.
If you’ve paid attention to the technology space over the past couple of years, you can’t have overlooked the growing hype around Web3. Hailed as the next phase in the evolution of the web, Web3 aims to take power away from the handful of giant companies that have dominated Web2 and return it to its democratic roots. This vision for a decentralised web relies on blockchain technology and incorporates concepts such as token-based economics and decentralisation.
If Web3 achieves anything like the potential its fiercest adherents believe it has, it could revolutionise everything from finance to art and marketing. However, one of the industries that Web3 could most radically transform is insurance.
For traditional insurers, Web3 and its related technologies also offer a way to enhance the mechanisms that power the industry and solve some of the issues that have long plagued it. These include an overreliance on trust, information asymmetry, cumbersome processes, and opaque practices.
From staid and conservative to embracing tech
Not all that long ago, it would have been difficult to imagine insurers embracing a nascent set of technologies, such as those behind Web3. It is, after all, an industry predicated on understanding and minimising risk. But in more recent years, the space has seen substantial changes.
The global insurtech space, for example, was valued at US$3.85 billion in 2021. It’s also anticipated to be worth US$152.43 billion by 2030. While at least some of that growth is the result of disruptive upstarts aiming for traditional insurers’ lunches, it’s also true that the industry as a whole is far more willing to adopt technology than it once was.
A good example of this is blockchain, one of the technologies pivotal to Web3. Insurers are already using blockchain for everything from smart contracts to advanced automation of processes and improved cybersecurity. That embrace of technology will become increasingly important as insurers look to stand out in an increasingly competitive landscape.
Right now, 93% of British consumers and 94% of businesses are satisfied with the level of service they receive from their insurers. Both, however, agree that there is room for improvement. Both, for instance, want greater personalisation and customisation of policies but fear that this increased personalisation will mean that they lose control over their data. Applied effectively, Web3 could well be key to meeting such demands while also eliminating any related concerns. Yet it’s important that Web3 usage runs parallel to efficient, omnichannel communication between business and consumer to ensure customers feel connected.
Enabling better, more personalised communication
Historically, that’s not always something insurers have done well. Most customers only hear from their insurer once or twice a year, with the interactions tending to be dull and administrative. Web3 combined with a CCM platform can go a long way to changing that and ensuring that insurance customers receive communication that is highly relevant and personalised to them as individuals.
Remember, with Web3 customers own their data. That in turn means that insurers can go directly to them for their data, rather than having to rely on digital breadcrumbs from around the web as is currently the case. That in turn means that any communication that the customer has with their insurer can be properly tailored to them as individuals and has the best possible chance of being relevant.
A CCM platform can help take that further by ensuring that insurers can send messages that cover not only the needed information but the entire context of the interaction which includes customer profile (e.g. lifestyle and life-stage needs), history of online activity, and personal preferences. These messages can also be tailored to specific platforms (web, email, SMS, print) and devices (mobile, laptop, tablet, PC).
Improving the experience of a grudge purchase
Web3 then stands to not only improve the way British people use insurance but also to complement British insurers’ efforts at providing personalised, relevant communications to their customers. Taken together, these factors, alongside Web3’s speed and innovation could foster the opportunity to create a more trustworthy relationship between insurer and consumer, in a way that is highly efficient for both parties.
Ultimately, that creates a better overall experience for customers bringing with it the returns on loyalty and customer satisfaction which come with such a shift. For something that’s as traditionally as much of a grudge purchase as insurance is, that’s invaluable.