When computers, tablets and smartphones are used to consume goods and services prices are also squeezed and thereby inflation. This means that both that consumers can more easily compare prices but also that there is the option to trade from both Swedish and foreign sites. Since Swedes are quick at leaping onto new trends the development can progress rapidly here. Some sectors have undergone huge changes, such as the music and news industry, writes SvD in an interview with Swedbank’s Chief Economist, Anna Felländer.
Since our consumption pattern has changed the changes will also affect the market for insurance companies. Digitalisation creates expectations among customers of life insurance companies of an effecient customer journey. With mobile BankID and the digitalisation of the Social Insurance Agency (Försäkringskassan), the Swedish Tax Agency (Skatteverket), various school webb’s, Min pension and various online retailers customers have completely different expectations than the paper-based health declarations that many actors are still using. Isn’t it time to give customers the option to answer relevant questions in a digital format when they are about to submit a health declarartion, and sign with their mobile BankID? Then both the health declaration and risk assessment would be compleated during the meeting with the advisor/salesperson.
Watch out for new actors!
Completely new actors, with an eagle eye on what customers are doing with their smartphones, tablets and via computer will step into the arena. In the UK, Google has bought a price comparison site and is beginning to act in the care insurance sector. Now it earns money both by displaying competing offers and on advertising space.
In Sweden we have seen a couple of price comparison sites for non-life insurance, but before a possible ban on commission payments, it is not entirely improbable that we will also see price comparison sites in Sweden. Insurance companies may eventually not pay commission but a payment for a price displayed or for a health declaration being conducted are completely different services. Since the insurance company has an efficient distribution channel, the prices may be squeezed and the costs lowered.
Will reduced premiums and the low costs will affect the pressure on inflation – we have not counted on it. But lower premiums and new actors who take over the customer relationship, means that the predictability of the life insurance company’s operations will decrease. How long will the paper-based and manual risk assessment processes remain?