Since it was founded in 2016, California-based insurtech NEXT has endeavoured to transform coverage for small businesses, a mission that has taken on particularly valorous proportions during the post-COVID economic recovery.
Currently valued at over US$4bn and with more than 250,000 customers, NEXT’s status as a full-stack, technologically innovative company in the insurance space has been integral to its success.
“Small business owners will continue to value the offerings and capabilities provided by insurtech players instead of the traditional options. We're leveraging the latest technologies, like artificial intelligence and machine learning, to provide more affordable and customised policies, and increasing accessibility, which is becoming the new standard in many respects,” said Effi Fuks Leichtag, Chief Product Officer.
Tapping into the potential
Prior to NEXT’s arrival on the scene, the small business insurance market was noticeably underserved despite its alluring $140bn value. Within this vacuum, the company’s fresh approach was soon able to establish leadership.
According to Leichtag, digital transformation is less about technologies themselves and more about how they are delivering value. For NEXT this meant one thing: the customer experience.
“We're building a one-stop-shop where our customers can get all their insurance needs through one gateway, from purchasing to servicing and claims. NEXT has built its entire company around this idea and I think the results speak for themselves.”
When asked what the primary objective of a company’s digital transformation should be, Leichtag indicates that the answer would vary from business to business - some might need greater speed to market, optimised service, new products, etc. Regardless, he continues, “technology should empower customers to do more and get more from a service.”
Fostering the new normal office culture
Digital transformation is as much about people as it is about technology. If a company is going to reshape its operations then it also needs to invest in its culture. For incumbent insurers, adapting to a more digitally inflected environment could take adjustment; this is another area where insurtechs have a natural advantage:
“NEXT fosters a culture of continuous learning and offers opportunities for employees to really take ownership of their work,” says Leichtag. “There's a lot of autonomy for individuals in our company to drive a specific line of business or specific segment.”
Pictured: Effi Fuks Leichtag
This is a degree of independence that would be incredibly rare in the pre-digital industry and it doesn’t stop there: NEXT ensures colleagues stay connected in the remote workspaces instigated by the pandemic, too. For example, 2020’s efforts included virtual reality renderings of the company’s various offices for a global holiday party, online activities like fitness and painting classes, virtual meetups to connect new hires with colleagues, and more.
“Technology has ensured that our culture still thrived during the complicated times we experienced last year,” he adds.
Becoming truly people centric
What’s noticeable from NEXT’s example is how important digital technology can be for establishing and maintaining human relationships in insurance. Digital transformation means learning to treat people, both internal and external to the organisation, better.
“Instead of just honing everything towards financial results, insurers should hire talented and motivated people and focus them on customer satisfaction,” Leichtag advocates. “By doing this you will build a product that is attractive and loved by customers. I think that's what insurance was born to be.”
As is now clear, the value proposition of digital transformation is its capacity for refining processes, empowering employees, and creating more value for customers. Furthermore, businesses taking a digital-first approach can meet customers “where they are”, accommodate their present needs, and innovate new products quickly.
Ironically, a topic one would generally consider a tech issue is actually about the quest to attain truly people centric operations. NEXT realises this, concludes Leichtag, and sees no reason to change strategy now.
“At NEXT, we put a significant premium on company culture and employee well-being, which helps us attract top tier talent. Tech companies can sometimes be too dependent on certain individuals, but we wanted to challenge that by empowering everyone.
“I think that's an important differentiator between us and other insurers; we want to create a culture that scales because the journey is long and we're just getting started."