As life insurers pursue profitable growth in an increasingly competitive marketplace, one of their key differentiators is their ability to provide expert advice. Now they need to package it right.
In my previous blogs, I have tried to paint something of the context in which life insurers must find strategies for profitable growth. I have argued that these strategies must combine enhancing operational excellence and finding new business. In both instances, they must secure their place in the value chain by building close relationships with an increasingly dominant and demanding customer base.
Complex issues, of course, and the strategies will likely vary from company to company depending on its reading of the future and its own vision. But it’s clear that insurers who want to retain and improve their relationships with customers—and so avoid becoming simple product factories for other firms—will have to focus on adding the right value.
One clear differentiator that life insurers have is their existing capability for giving expert advice. Life and health insurance are complex, and making the right decision about long-term investments, risk profiles and achieving financial/ retirement goals is not easy. The number of variables is high, both at a personal level (age, job prospects, salary, lifestyle, weight, general health, and so on) and at a macroeconomic level (tax and regulatory regimes, stock market performance, interest rates, geopolitics and so on). Tax and estate planning come into the equation.
Life insurers have both the trained staff (within their own companies or those of their partners) and the models to provide this kind of advice. This is a hugely valuable capability and, really, it’s not one that many competitors can match—or would want to. Banks are the obvious exception but they are in the same boat as insurers when it comes to achieving customer relevance.
The challenge then is making that advice-giving facility relevant to what customers want, and easily accessible. Studies like the Accenture Global Consumer Pulse Research 2013 and the Accenture 2013 Consumer-Driven Innovation Survey will help here on both counts. There’s no doubt that retraining and repositioning the existing advisory capability will be difficult and will require good change management.
How well they interpret what customers want, and angle their advisory functions, will be one of the key success factors for tomorrow’s life insurance leaders.
The Consumer-Driven Innovation Survey’s data can also now be customized using our new online data-visualization tool.