Taking engagement seriously: the big opportunity

I’ve used the last two blogs to sketch out what Irish insurance customers want, and how well (or badly) Irish insurers are meeting those expectations. Right now, it’s clear there’s work to be done. And with disruption just round the corner, the clock is ticking.

It’s not all gloom and doom though. In fact, there are some incredible opportunities for incumbent insurers to disrupt the market themselves.

To show how they can get started, I’ll be drawing on some recent research by Accenture. Our FS Global Distribution & Marketing Survey canvassed almost 33,000 insurance customers in 18 markets. This generated some great insights into how customers want to interact with insurers across the insurance lifecycle – and where digital can add value to insurers’ propositions from now on.

Top line? Insurers urgently need to find a more positive way to engage with their customers. And they need to be engaging with them more frequently. That means transforming distribution models and physical networks. It means offering customers new products, advice and services. And it means delivering an experience that’s personalised and relevant, whoever the customer happens to be – and whatever stage they’ve reached in their insurance journey.

I know it sounds daunting. But it’s far from impossible. After all, startups like Lemonade are thriving by doing exactly this. So how should traditional insurers get started? The short answer: put the customer right at the centre of new product and service design, adopt a test and learn approach, and don’t be afraid to fail.

To remain relevant (particularly with the young, rapidly growing segment of next generation insurance customers), insurers have to change their business model. Instead of being product/process driven, the customer should be central, with data and analytics driving decision-making and experience design. The critical tools here? Advanced technologies and strategic management of information.

And the critical mindset? They need to shift from a product-driven approach to a service-driven one. From selling a commodity bought on price, to selling a value-adding service bought on quality.

From now on, insurers will have to balance investments between their core business and the ‘new’. To fund growth (in a low-growth marketplace) they’ll have to transform their core to drive up investment capacity. But at the same time, they’ll need to identify (and scale) the new opportunities that emerge alongside their traditional business. 

I’m not saying this will all be easy. It’s more than understandable that insurers will be reluctant to withdraw money from the core to fund the ‘new’. Anything that gets in the way of growth is viewed with hearty suspicion. That needs to be tempered. There’s also a deep-seated cultural issue to address: risk aversion. In most firms, innovation approaches up to now have been geared to incremental, low-risk opportunities.

From now on, higher-risk, disruptive opportunities will be the priority.  That’s why an agile test-and-learn approach will be essential. Winners will be the ones that can accelerate learning within the enterprise and rapidly refine new ideas in line with near real-time market feedback. 

There’s more, or course. But the principal message for Ireland’s insurers at this stage is take a measured approach, don’t attempt to be all things to all people, and tackle CX innovation in bite-size chunks. Focus on areas where positive impacts can be made, quickly. And keep trying.

We’ve used our research and experience with insurers to identify five new distribution models. By combining elements from each of them, insurers should be able to increase customer engagement and relevance. You can find out more here.

Thanks for reading. 

 

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