Other parts of this series:
In the previous post, we went over how partnerships and new players are disrupting insurance distribution. With powerful analytics, low-cost digital channels, and synergistic alliances, these insurers are driving to realize their goal of owning the insurance customer experience by delivering a better one.
Partnerships like the one between Allianz and BMW, which offers auto insurance to new car owners, create a strong imperative for other insurers to find similar alliances. These relationships deliver results—the Allianz-BMW one has tripled its insurance business since 2009. But the number of smart partnerships is inherently finite. A non-insurer is not likely to partner with multiple insurers, especially if those insurers offer similar services. Established insurers need to act now if they wish to avoid being frozen out.
The industry is aware of this. Accenture research shows that 72 percent of insurance carriers are planning to form new distribution partnerships in the near future—or have already done so.
But that research also suggests that the industry is hesitating to take the bolder steps needed to get in front of this disruption. For example, fewer than half of carriers are planning or have completed acquisition of start-ups or innovative competitors.
That same research also looked at the experience of industry leaders for insights into how insurers can create customer experiences that equal or even surpass what’s offered by cutting-edge partnerships and start-ups. The analysis suggests that insurers need to achieve three things to do this:
- Develop more customer-centric business and operating models.
- Execute multiple models at the same time for both core and digital businesses.
- Apply lessons learned from new partners on customer focus across the enterprise.
These objectives will help you maximize your chances of becoming a leader in the new, collaborative insurance distribution ecosystem. Here are a few considerations to help achieve them:
- Define a win-win partnership model. Determine the role you want to play in the ecosystem. Pursue that role with partnerships supported by clearly articulated success metrics and a unified brand promise.
- Pick your partnerships wisely. They should align with your broader market approach. Use your overall strategy to define which customer segments are most attractive to you, then develop tailored value propositions targeting those segments. Create new products or services around those propositions, then evaluate which non-traditional partners or business models complement them. For instance, if you are targeting high net-worth customers, you might partner with a luxury goods retailer
- Make personalization fundamental to product design. Modern customers expect a tailored experience. Develop capabilities to quickly design and deploy products built around specific partner value propositions, supported by granular analytics.
- Develop the right digital support strategy. It should align with customer expectations, business vision, and IT platforms to fulfill the four fundamental objectives of customer experience:
- Execution of fully-informed and real-time interactions.
- Expansion of awareness and extension of reach.
- Delivery of highly personalized experiences.
- Creation and distribution of rich, interactive content.
- Build cost-effective, flexible operations in the back- and middle-office. Support them with flexible technology infrastructure to make the economics work.
Insurance distribution is a dynamic field right now. New industry entrants are forcing established insurers act now or lose out. But by re-shaping their products and services, expanding distribution channels, and re-imagining the way the engage with the customer, legacy players can match or surpass the new competition.