It has often been pointed out that consumer expectations are driven onwards and upwards by the way the most innovative, customer-centric (usually Internet-based) firms continually redefine service. Life insurers, constrained as they are by conservative cultures and inflexible platforms, are seldom among the front-runners. But they are judged by the same standards.
To put it simply, consumers demand more while exerting relentless downward pressure on premiums. And if they don’t get what they want from their current life insurance provider, loyalty is not going to make them stay—Accenture’s latest Global Consumer Pulse survey found that one in four life insurance customers feel no loyalty at all to their providers. What is more, they are better equipped than ever to search the market for a competitor that promises to make them happy.
Personalization in a digital age
In a world where Amazon not only addresses its customers by name, but seems to know what they want, and when, insurers are going to have to get a lot better at personalization. Data analytics and predictive modeling will go a long way to improving the understanding of customers, and developing granular market segments that can be addressed in unique ways.
A customer experience engine will make it possible not only to plan and execute differentiated interventions for each segment, but to measure the impact of each action. These metrics, fed back into the engine, complete the “test and learn” cycle and enable the insurer to continuously enhance the effectiveness of its marketing, sales and service functions.
To an increasing degree, consumers are being wooed by vendors outside of the life insurance industry. These newcomers are offering them innovative ways of safeguarding their financial future, with features and services that traditional insurers are hard pressed to match. To remain relevant in the years ahead they will have to invest in their ability to keep track of the moving target that is their customer.
In my next blog I’ll discuss how changing customer preferences are affecting the products insurers need to offer. If you would like to read the earlier posts in this series, click here.