This blog is part of series exploring the nature of customer-centricity. Read the preceding blog.
Insurers are only at the beginning of the journey to delight and surprise their clients with new experiences as they become more customer-centric and digital. As usual, the team at Accenture has been hard at work creating tools to help insurers think about the concrete steps they will need to take. Our maturity models and capability models will be helpful in creating a transformation program that is structured and thus maximizes the chances of success.
But what I want to focus on is something much more fundamental: the company’s capacity for the kind of change that is needed.
Change is always hard—it seems like companies and most humans are innately conservative. Perhaps one could even argue that insurance is more conservative than most because if you’re in the business of mitigating risk it makes sense to stick with what’s tried and trusted. But, as I’ve shown, radical change of the business model will be needed to stay in business over the long term. A few cosmetic changes might be enough to keep things ticking over for the next few years but I believe that, like the dinosaurs, such companies will ultimately run out of things to eat! (Here we should stand a moment in silence to remember Nokia, which once defined the mobile handset market and then, through refusing to accept change, lost its position to upstarts from outside the segment like Apple, Samsung and HTC.)
One of the things that we recommend and that insurers are doing is to create the position of chief digital officer and, ultimately, a digital unit or center of excellence. In theory, both these initiatives could act as effective agents of change but their mere existence could lull the company into a false sense that the digital box had been ticked. This would be fatal: for this journey to be successful, the whole company must take part.
Because the insurance industry has been resistant to change over the past three centuries, building momentum for real change will not be easy. In fact, I believe some sort of industry-wide initiative will be needed really to get things going.
I think we shouldn’t forget that the change to customer-centricity is actually a return to the very roots of insurance, which sprang from mutual groups that benefited their members. Insurers need go get back to basics and find ways to convince consumers and existing customers that they (and not just management and investors) will benefit from their services.
Car manufacturers once owned their whole value chain and then ceded much of it to become assemblers—now they scrambling to find ways to reignite their connection with customers. Insurance does not have to follow that loop, which saw the demise of many great marques—but do we have the courage and will to take the tough decisions that will be needed?
This concludes my exploration of customer-centricity for the moment. Read the series starting with the first blog.