For success in the changing insurance market, I believe, everything hinges on the customer. Insurers that are able to understand their customers at an extremely granular level, and translate that customer-centricity into tailored, personalised customer experiences, will build loyal customer bases and be able to see off the new competitors—Google, Amazon and similar non-insurance digital players—much more sustainably.
Make no mistake, the benchmark against which traditional insurance companies will be measured will be set by these non-industry innovators. Customers and customer experiences are at the heart of their strategies and how their operating models are structured, and customer service is their passion.
Insurers will have to become much more engaged with their customers, creating new ways of integrating themselves into their customers’ lives, rather than just selling them products intermittently.
At a practical level, one of the key weapons in the insurer’s armoury is data and the analytics to turn that data into insight. It’s vital that this key initiative is owned not by the IT department but by the business, and every programme must flow from a business need and have a business outcome. The days of constructing a data warehouse because it would provide a source of unspecified insight are over. Data-driven insights will do more than provide customer information; they will also enable the business to improve its own performance while dramatically reducing costs.
In short, then, data analytics must be given a sharp business focus, and not simply be implemented because it could be useful. To give you one personal example: by following this business-focused approach with a client recently, we were able to identify and prove six or seven high-potential opportunities that will generate tens of millions of pounds in value straight to the bottom line.
Insurers have to put the customer at the heart of everything they do, and what they offer must be tailored to what customers want. Systems and processes that hold them back from reaching this goal have to be scrapped in favour of ones that are much more agile and flexible.
Read the full report on the 2013 Accenture Digital Insurance Survey, whose results got me thinking in the first place.
For more on analytics and its role in insurance, read Achieving payback in insurance analytics.