The new survey highlights the difficulties that organizations face as they develop new insurance programs in a market that has long been dominated by a handful of incumbent RSOs.
Sure, the insurance technology company that unlocks the potential of digital insurance, released the 2024 State of Digital Insurance Report, revealing widespread dissatisfaction with a core part of the insurance ecosystem, legacy rate service organizations (RSOs). Hundreds of insurance industry decision-makers were surveyed to dive deeper into the current state of the digital insurance landscape, as well as the challenges of getting insurance programs off the ground and launching them digitally. As the embedded insurance market is expected to exceed $70 billion by 2030, this new research reveals interesting insights about the tools that insurance professionals are using to meet this demand, as well as the difficulties posed by legacy RSOs in the process.
High Cost, High Pain
As consumers seek more seamless experiences to purchase insurance in a digital world, many carriers and brands are looking to keep pace by developing digital insurance programs from the ground up. Rate service organizations are a necessary step in building insurance programs, providing rate, rule, and form filings, as well as other services, such as loss analytics. Sure’s new research report found that while there is widespread use of RSOs and their services, 71% of respondents feel that legacy RSOs require a massive amount of effort to get insurance programs off the ground, maintain them, and launch them digitally. Ultimately, these shortcomings hurt consumers with limited options and coverage that’s not keeping pace with the market.
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Not only are the current options for launching insurance programs time-intensive and massively complex, but they’re also highly expensive. 75% of respondents noted that their companies spend at least $1 million annually to execute these programs — and 31% report spending $10 million or more. Despite all of this investment of financial resources and effort, only 12% of respondents are very satisfied with legacy RSOs. Further, when asked what they are least satisfied with, respondents cited effort (46%) and flexibility (31%) despite both also being their top two priorities.
“Having spent almost a decade partnering with global carriers and consumer brands to build and launch digital insurance programs, these results are not surprising. The plumbing and pricing of the insurance industry is a mess and a big part of it is the incumbent RSOs who haven’t kept pace with the transition to fully digital insurance,” said Wayne Slavin, co-founder and CEO of Sure. “Carriers are spending up to $10 million a year on their RSO’s services to build and maintain their insurance programs, and yet the data shows that the pain points are everywhere and satisfaction is shockingly low. One would assume that with so much investment of time, effort, and money, satisfaction would be guaranteed, but it’s not. The industry needs a new way forward to provide modern solutions for carriers and, ultimately, for consumers who are seeking insurance options.”
Sure’s new survey underscores the difficulties that organizations face as they develop new insurance programs in a market that has long been dominated by a handful of incumbent RSOs. As one respondent said, “We have not yet identified an RSO that provides the cost, value, and flexibility we are seeking.” To truly reach customers with insurance products in their moment of need through digital experiences, a new solution must be enabled with a technology platform, manage necessary integrations out of the box, and prioritize seamless digital customer experiences. Sure’s State of Digital Insurance Report demonstrates that the current solutions simply cannot deliver on those basic needs.
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