Digital transformation in the insurance industry is changing not only the products and services offered by the companies, but also the end customer, who is getting more and more digital and open to technological solutions. The combination of techl trends and new attitudes is the guideline for transformation in the insurance industry. A change that companies need, which is already underway, with a quantifiable economic dimension. According to Accenture research, the market potential for those investing in digital innovation is approximately $375 billion globally, $18 billion of which is in Italy. Companies, therefore, need to understand technological trends, but also consumer lifestyles. It’s time to create new solutions for the end customer.
How can companies approach digital customers? One of the ways forward is open innovation, i.e. the openness to solutions proposed by young innovative companies. The American company Prudential Financial is an example. The largest US life insurance company has signed an agreement for the acquisition of the startup Assurance IQ, an online insurance policy sales platform.
The agreement provides for an advance payment of $2.35 billion plus an additional premium of $1.15 billion (in cash and shares) subject to the achievement of the multi-year growth targets set for Assurance.
Assurance IQ, the insurtech startup offering solutions for digital customers
Assurance IQ provides a platform that, using a combination of algorithms, software and human expertise, combines buyers with customized solutions related to different types of insurance offerings (life, health, car). The purchase is also offered, according to the characteristics and needs of each customer, entirely online or involving a sales agent, with an improvement in involvement and a higher conversion rate. The startup is based in Bellevue, Washington.
What will Pudential do with Assurance IQ
The characteristics of the insurtech that have made their way to Prudential Financial, an insurance and financial services company included in the Fortune 500 list, are outlined in a note published by the same company: “Removing inefficiencies associated with traditional models reduces customer acquisition costs through on-demand technology service, enabling deeper market engagement while maintaining a high level of service and product selection. Its fast-growing model offers compelling economic benefits with low fixed costs and low capital requirements resulting in high margins and high scalability”.
According to Charles Lowrey, President and CEO of Prudential, “Assurance is accelerating the strategy and growth potential of Prudential’s financial activities, bringing us closer to a wider range of people throughout the economic and social range to better meet their needs. We look forward to working with the Assurance team to boost business in the United States and, ultimately, extend its unique approach to clients worldwide”.
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