8 Reasons Insurance Companies Must Up-Level Their Product Managers’ Skill Sets in 2021
Download the Brief: Insurance Trends and Their Implications for Product Management & IT.
When it comes to adopting digital tools and technologies, it’s “full steam ahead” for businesses in every sector. In fact, according to 2021 research from Flexera, 54% of companies worldwide said they are prioritizing digital transformation, while 49% are prioritizing cybersecurity. And IDC projects the value of direct investments in digital transformation between 2020 and 2023 will be $6.8 trillion.
The insurance industry is no exception — PwC stating in its Top Insurance Industry Issues in 2021 report that “More change has occurred in the industry in the past year than in the previous several years combined, and its pace is only accelerating.”
And with all this change comes challenges. With innovation ramping up into warp speed, success will hinge on product management’s ability to adapt quickly and execute on new projects and initiatives.
In a recent brief, 280 Group examined trends that are impacting the insurance industry, and how product management and IT teams at insurers can capitalize on those trends by adopting modern PM practices, optimizing skill sets, and aligning product and development processes.
In light of those trends, here are eight good reasons Product Managers at insurance companies must up-level their skill sets today:
#1: Digital Transformation is Happening Fast
The Covid-19 pandemic’s impact on IT departments was profound, because it forced them to accelerate initiatives for implementing cloud-based and digital tools. For example, McKinsey reports that organizations sped up the digitization of customer interactions by about 3 years.
This rapid acceleration has put tremendous strain on Product Managers and IT teams to evaluate skills gaps and adopt product management practices that emphasize ownership from the conception of a new initiative or project to delivery and beyond. Rather than relying on a one-off project-based approach, IT teams must innovate around addressing customer pain points — and in doing so, they’ll not just fix problems but create business value.
#2: Innovation is Data-Driven
The influx of data from mobile apps, social media, telematics, and other sources can help insurers make better decisions about how they build and price products, reduce risk, and settle claims. By incorporating data into research, design, testing, product development, and pricing, insurers can improve the chances of success for new digital products.
However, making good use of all this data requires a new skill set that many Product Managers in insurance agencies may lack. PMs need to learn how to conduct Voice of the Customer research, embed data analytics into their products, and most importantly, how to derive insights from this data to drive more successful products.
#3: AI is Changing Claims and Risk Management
AI and machine learning are reducing time spent processing claims, and automating manual tasks and paperwork, while helping insurers predict and avoid risk and fraud. As in all industries, AI-powered self-service apps and bots are helping to optimize costs and improve the customer experience.
But leveraging these new technologies requires tight alignment across teams — and the job of facilitating that alignment often falls to Product Managers. Not only that, but staying on the competitive edge will require the ability to test and iterate quickly, which requires new digital product management skills.
#4: Customer Expectations are Evolving
With increasing access to exceptional mobile and digital experiences, consumers have high expectations from business interactions, and insurers must keep up. Young consumers expect highly responsive, personalized service, which requires a deep understanding — and empathy for — customers and their needs.
Unfortunately, Nielsen reports that over half of all innovations don’t deliver on customer needs, and that statistic underscores the criticality of good product management. Product Managers will need to become adept at new research methods and data analysis, so they can better understand and predict customer preferences, and build products that consistently hit the mark.
#5: Qualitative Data is Needed for 360° Insights
While it’s relatively easy to analyze quantitative data — particularly with access to new and advanced AI-driven tools — gathering and analyzing qualitative data is more challenging. Yet information gathered from in-person conversations in the field, in focus groups, or during interactions with actual users helps develop a deeper understanding and empathy for customers’ pain points.
Using qualitative data to drive customer loyalty and user adoption will require Product Managers to invest in becoming more customer-oriented and developing a structured approach to collecting and analyzing qualitative data.
#6: The Race to Personalization
The heavily regulated insurance industry has been slow to adopt personalization — a trend that has a tremendous impact on customer experience. According to recent research from CITE, 83% of consumers expect products to be personalized within moments or hours. This points to a need for Agile development and continuous discovery. Product Managers will need to brush up on these skills and methodologies while learning how to incorporate real-time data into their product strategies and planning processes.
#7: New Channels of Distribution
Direct-to-consumer channels such as social media and mobile apps are helping insurers cut distribution costs, reach a broader audience, and remove friction from the customer experience. As investments in these new channels increase, innovation will need to keep pace, and Product Managers must adopt Product-Led Growth (PLG) models that focus on the end user.
With PLG, in-product renewals, trial offers, and promotions like “refer-a-friend” are delivered cost-effectively through digital channels at just the right time to highly qualified leads, reducing the burden on (and need for) Sales intervention. For PLG to work, Product Managers must be able to collaborate with Sales and Marketing teams effectively. What’s more, Whole Product thinking must be adopted to ensure the customer’s experience with the product is seamless and impactful.
#8: Conversion Optimization
According to McKinsey, digital-native industry entrants have up to 6X higher conversion rates than traditional insurers who are just now adopting digital tools and models. That’s why it’s critical for product management and IT teams to invest in identifying and measuring the right metrics — awareness, activation, retention, revenue, and referrals — while closing the skill gaps around product operation and technical best practices.
Invest in Your Team
These are just some of the trends we’re seeing among our customers in the insurance industry. Insurers who invest now in upskilling product management teams will be best equipped to navigate new challenges that arise as digital transformation continues to take hold, and capitalize on the trends to create competitive advantage.
For more information about how 280 Group can assist in upskilling your product management team with private and customized training, contact us today.