Other parts of this series:
High performers in insurance are developing the capabilities to remain relevant to customers and keep up with their needs in an ever-evolving digital landscape.
In the first post of this series, we reviewed the importance for insurers of creating sustainable growth, and touched on the five capability sets they need to develop in order to stay relevant to their customer-base:
- Targeting new opportunities
- Designing for customers
- Building engagement
- Scaling with partners
- Rewiring culture
These capability sets are what Living Businesses have established in order to keep up with continually changing customer needs in a digital landscape that continues to develop at light speed. Accenture’s recent research findings show that service providers that can adapt quickly are staying relevant to customers—and not just relevant, but hyper-relevant.
Accenture’s research into Living Businesses has shaped the definition of relevance as “a commitment to provide products, services and experiences that ‘wrap around’ individual customers, constantly learning more about their needs, intents and preferences.” And a key enabler of hyper-relevance is the flexibility for an insurer to adapt as the winds change, all the while staying engaging and useful.
The following statistics break down the needed capabilities and why Living Businesses—the high performers—are excelling beyond their peers with an unwaveringly customer-centric approach.
In 2017, P&C insurers lost $168 billion in revenue to competitors.
If there is any one reason for insurers to get on board with sustainable growth, this statistic is it. $168 billion in lost revenue dramatically highlights how quickly customers’ needs have changed. As explained in our previous post, one consequence of this is that their loyalty can no longer simply be earned but must be kept. They are in charge, and if an insurer’s offering is no longer sufficiently relevant to them, they will find one that is.
Looking at the responses by the 24,000 consumers who participated in Accenture’s 2018 Global Pulse Survey, these additional statistics stand out:
- 62% of the instances of customers switching from one insurer to another are due to a lack of relevance.
- An insurer perceived as relevant is 63% more likely to be recommended by customers to friends and family.
- 78% of consumers are willing to engage with digital natives for their financial needs.
83% of FS high performers are excelling beyond their peers when it comes to “funding new growth initiatives by optimizing costs elsewhere.”
As targeting would suggest, insurers need to be looking ahead to identify and select new value and business models with care. In order to do so, they must:
- Understand customers’ changing digital needs and preferences;
- Pivot growth strategies to profitable areas beyond the core;
- Fund new growth by optimizing costs elsewhere.
The majority of FS high performers report strong success at designing for customers.
In comparison to 71% of other providers, 88% of high performers in the insurance sector report strong success at innovating customer experiences that make them relevant in whatever the current landscape looks like. These high performers are:
- Acting on insights derived from advanced customer analytics;
- Developing compelling new experiences;
- Maximizing personalization and contextual sensitivity of products, services and experiences.
Building engagement has created business success for 87% of high performers.
Companies that are very focused on building customer engagement have seen the results of using every engagement channel to the greatest advantage for both the customer and the company. These three capabilities are vital:
- Using agile technology platforms and prototyping to develop and improve experiences;
- Rapidly scaling execution of new growth initiatives;
- Optimizing operations for dynamic execution across channels.
Almost a third of high performers engaged with a new type of alliance partner in the past year.
Collaborative relationships are one of the keys to achieving the best market potential. Scaling with a forward-thinking partner (or partners) creates the opportunity to efficiently and purposefully select and share data. Collaboration is one of the keys to customer relevance, and can achieve an impressive multiplier effect. In order to scale, companies must:
- Collaborate with partners beyond traditional boundaries;
- Connect employees / partners with data via cloud platforms;
- Ensure that customer data moves fast, seamlessly, and accurately.
Rewiring culture has been a key differentiator for high performers across 9 out of 10 industries surveyed.
As one of insurance high performers’ top three capabilities, rewiring culture is also the key differentiator for eight other industries. Everyone in the company needs to be on board—and that starts with leadership. In order to rewire their culture, leaders must focus on:
- Fostering a culture that continually seeks to better customer relevance;
- Re-orienting organization structures around customer focus;
- Augmenting the workforce with flexible tools to enhance relationships.
And if none of the above has convinced you…
52% of the companies that were included in the Fortune 500 in 2000 no longer exist.
If most of the companies on the Fortune 500 list at the turn of the century have disappeared, those that are still around know there’s no time to waste. More than 3 out of 4 consumers would be willing to engage with a digital native for their banking or insurance needs. The newer pure-play organizations and digital giants are already hardwired to flourish in the fast-paced world of being able to change one’s mind with a swipe or tap on a smartphone.
This is why traditional service providers must choose sustainable growth and strive to become Living Businesses. Focusing on creating new advantages before their current strengths fade will allow them to thrive in an environment where consumers are choosing relevance.
These statistics provide an eye-opening reminder of the importance of remaining relevant at a time of constant disruption. The full report on Living Businesses can be downloaded here.