Zurich’s strategy is about focusing on our customers and serving them in simple, fast and convenient ways. Innovative technologies play a key role in this endeavour, so over the next few months, we will publish a series of articles on how digitalization can improve our customers’ insurance experience.
If you read the first article in this series, you’ll know how digital has embedded itself in our society. The following article focusing on how digitalization is advancing and changing the face of businesses and entire industries.
Digitalization has only just begun
It’s the end of an era and the beginning of another. We have all seen how digital technology has disrupted the music, photography and video rental industries. In 1995, you went to a video store to rent a video or a music store to buy your favorite CD. Today, most people stream movies and television shows online and download their music to play on their phones or MP3 players.
This was the beginning - the first wave – but by now, more industries are beginning to notice the true impact of digitalization. Think about how the traditional TV, media, recruitment and travel industries are getting disrupted by new players such as Netflix, LinkedIn, Uber, Airbnb, Booking.com and countless other platforms. This is the second wave, and it’s only the beginning of an even bigger wave to come.
Think about the growing needs and opportunities in retail. Nike is experimenting with the integration of the online and offline customer experience through social media and the use of smartphones. Google is developing a digital contact lens that can measure blood glucose levels from tears, a research breakthrough for those suffering from diabetes.
Think about self-driving cars. A Tesla, for example, already has a lot of self-driving features built in. In combination with the internet of things
(allowing devices, buildings, vehicles etc. to 'talk' to each other) and artificial intelligence
, the possibilities of digitalization seem endless. The upcoming third wave will most definitely disrupt countless industries.
What industry disruptors have in common
We cannot predict the future so we don’t know who will be affected next, and to what extent. However, we can look back at the past and learn from the successful “disruptors”. Here is what they have in common:
- They reinvent products to provide it in a simpler, faster, transparent or more personalized way and ultimately redefine customer expectations.
- They use new distribution channels (through smartphones, apps, social media, etc.) and/or build hybrid models that merge online and offline and create a consistent user experience and customer journey.
- They recognize the importance of the crowd and know that peer reviews are the best way to promote their products.
- Their back-end processes are highly automated and handled by computers.
- They structurally change existing value chains, often cutting out the middle man in traditional consumer-supplier relationships.
- They establish platform-based business models that create value by facilitating exchanges between consumers and producers through large, scalable networks of users and resources that can be accessed on demand.
- They are obsessed with customer service
Rasould Jalali, Uber's former General Manager in Switzerland, Germany & Austria, recently gave a presentation to our Customer Advisory Board about the success of his company. "When we started out with the app in 2010, our goal was to connect riders with drivers. But it's taken us somewhere we didn't realize was possible. We never imagined that our offering could develop in such a way, and we keep learning from our customers, and from the data we collect, every day.”
Uber defines itself as a technology company and not as a taxi company. Its proposition is very simple - need a ride, make a click - get a ride. They offer a similar service, but faster and in a more convenient and simple way. Just by tapping on your smartphone screen you can pick a car and see how the driver has been rated by others. The app will cover the rest.
Amazon is the largest internet-based retailer in the world by total sales and market capitalization. When they were founded in 1994, their focus was on books, but they were quick to diversify into many other product categories and ultimately built a gigantic retail platform. Their focus is fully on convenience for the customer.
In the financial sector, one player who took advantage of digitalization to meet a customer’s need is PayPal. People want to make sure that their money is in a safe place. PayPal’s service allows you to send and receive money by only using your email address and a password, which is linked to your credit card or bank account. In addition, PayPal offers a money-back guarantee, so if you are not satisfied with a product or service, a refund will be made.
The future belongs to those who prepare for it today – Whether we like it or not, digitalization is here to stay and it will continue to change the world. Insurers, like Zurich, need to embrace this revolution because our customers are calling for simplicity, fast execution, convenience and transparency.
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Look out for upcoming articles on the impact of digitalization on insurance, initiatives currently underway at Zurich, and how you can serve our customers in simpler, faster and convenient ways.