The paradigm shift has imposed a strategic redefinition of the value chain, to the extent that we now see a multiplication of contact points for insurers, which has led to increased interaction with customers through the evolution of distribution channels.
During the last two years, essentially as a result of the impacts of the pandemic, we have witnessed a technological evolution in the insurance industry to meet the challenges of this new context. To meet the needs that emerged during this period, insurers began to pay special attention to the organization of customer information and to rethink products, adapting them to a new reality of life and consumption habits with disruptive effects, especially in distribution channels.
For all these reasons, today we can already identify clear changes in the way the insurance value chain is organized. The activity has moved from a siloed organization to an open platform model, focused on prevention and forecasting activities, and is now more capable of adapting to an unpredictable, volatile and uncertain context, which stems from the emergence of new consumer behaviors, but also from competitors' rapid innovation cycles.
This paradigm shift has imposed a strategic redefinition of the value chain, to the extent that we now observe a multiplication of contact points for insurers, which has led to increased interactions with customers through the evolution of distribution channels. With all this, companies are now better able to know their customers and tailor their offer according to their behavior, needs, and preferences. For this to happen, it is necessary to combine several actions: leverage technological adoption, promote the establishment of alliances and partnerships, particularly with insurtechs, which can allow traditional organizations to increase efficiency, reduce time-to-market and substantially improve the customer experience throughout their relationship journey with the institution.
In current circumstances, the value chain can even be considered fragmented, as the traditional processes of product design, marketing, distribution, underwriting, policy management and claims management will need to be replaced by more interactive and circular processes led by customer data and behavioral and needs verification.
Interactive processes are fundamentally about creating mechanisms for permanent communication between insurers and policyholders, allowing both parties to tailor circumstances to the relationship at any given moment as much as possible. That's why insurers are betting in the areas of health promotion and well-being, namely with the introduction of predictive models that allow them to adapt products and services exactly to the circumstances of each customer.
There are also innovations in marketing and distribution: besides the adoption of omni-channel strategies and the simplification of products, we are also witnessing the availability of services that go beyond insurance. To give a few examples, I can cite insurtechs that, in underwriting and policy management, offer customers pay-as-you-go insurance, access to alternative medicines, or platforms connected to vehicles for driving risk control, among others.
In short, the last few years have led to an evolution in the insurance industry and, therefore, organizations have to adapt in order to keep up with the current context. In addition to investing in new customer relationship models, they must be attentive to new market players, explore partnerships or even consider entering into parallel businesses to insurance, which will allow them to get even closer to their customers, serving them in a more holistic way. After all, a new value chain has emerged from the pandemic, requiring a reorganization of insurance services and organizations.