In my earlier posts in this series I talked about the challenges facing life insurers—challenges that are forcing insurers to re-think their approach to the market—and the three key areas they need to focus on to return to profitable growth.
When it comes to customers, the dual forces of the economic downturn and the technology boom have created consumers who are price conscious yet sophisticated and knowledgeable. They expect more for less, and particularly convenient, customized, holistic solutions.
To meet these expectations, insurers will need to:
- Increase their use of advanced analytics, mining customer data to identify underpenetrated or untapped profitable customer segments.
- Tailor communications and offerings to customers appropriately.
- Ensure that the customer experience across channels (web, advisor, call center) is integrated and consistent.
- Strengthen their web, mobile and social capabilities to become more engaging and relevant through the entire sales process.
Insurers should also consider using advice-led distribution models that can match customers with appropriate levels of advice for their needs and ability to pay. For insurers, this means making a fundamental shift from selling products to providing solutions for consumers’ problems.
Digital technology is another strategy insurers can use to expand and personalize relationships with customers, distributors and business partners at scale. Software-as-a-service models are being implemented—from front-end CRM, to underwriting, to back-end policy administration—to increase agility and reduce costs.
There’s no question that the journey to sustained growth will be a challenging one, but by taking the necessary strategic steps—focusing on the key areas of reducing general expenses, optimizing commissions and growing top-line premiums—insurers can position themselves competitively in the changing landscape and expect an increased return on investment heading toward 2020.
To learn more, download: Getting to 2020: Strategies for Profitable Growth.