Thus far, I’ve argued that insurers should be looking for new and innovative ways to become truly customer-centric—to think outside the insurance box, if you’ll pardon the cliché. To do this will require a great deal of flexibility and agility in terms of business process and operations, hence the pressure to become fully digital will grow.
More importantly, though, insurers will need to open their minds to new possibilities. This is why Accenture argues that digital insurance is not just a matter of digitizing processes but rethinking business models to take advantage of what digital technologies can enable.
One example that constantly engages me is the convergence between health and life insurance. I think it’s clear that the health insurers are, in the main, doing a good job of integrating their offerings into their customers’ lives, specifically in the areas of prevention and responding to life events. The traditionally more conservative life insurers need to follow suit, or they risk finding their core business being threatened by their health peers, not to mention other competitors.
Let me give you an idea of the kind of thing I mean. It’s well known that life insurers are big investors into the property market. Perhaps they now ought to see these investments in a more nuanced way, for example by tapping into the retirement market. The huge and growing demand for retirement accommodation and associated services is the direct result of the large populations of aging, affluent consumers in developed markets, including Japan. I have recently noticed that a well-known hotel chain is launching properties with this focus, combining accommodation and treatments related to combating aging. It’s a logical, if bold, extension of its core business of letting rooms; investing in a similar type of institution would be a similarly bold but logical step for an insurance company with a large property portfolio.
I would argue that such a move would be logical because, of course, the life carrier’s own customers would be beneficiaries of such projects, and indeed preferential access to the services could become a value-added service for policyholders. Buying a retirement unit in a development in an agreeable location (the Algarve, Florida or Greece) made possible by one’s life contributions would make sense to many people, and would presumably come with some sort of discount.
Such an approach would help to move the life insurer up the value chain in the eyes of its customers—and open up a whole new range of possibilities in terms of, for example, the drafting of wills and general financial services, and access to other services required by retirees, among them (to name just a random few) chauffeur services, package holidays, cultural excursions and the like.
Once an insurer starts going down this road, its most important benefit is the enhanced customer view it obtains—and with detailed knowledge of this kind, it becomes very easy to keep on developing new ways to become indispensable.
Next time, I’ll begin a new series of blogs exploring the notion of customer-centricity in more depth, using Accenture’s recently published Consumer-Driven Innovation Survey as a launching pad.