Microinsurers teach us that it’s all about being customer-centric. Today’s customers are notoriously less loyal than ever before and they expect personalized service and offerings from their service providers. These expectations are essentially products of the Internet Age.
One important point: customers increasingly don’t see service providers in industry boxes, and expect the type of service they get from a provider in one industry to be matched by service providers in other industries. Increasingly, I suspect, they won’t expect (or want) to go to specialized providers for each kind of service.
Read Accenture’s recently published Accenture Customer-Driven Innovation Survey for an in-depth look at today’s insurance customers and the kind of experience they want.
With all this in mind, insurers need to think very laterally about the value proposition they provide to customers, current and future. This may mean taking customer-centricity to new heights. Let’s face it, insurance is a grudge purchase, by and large, and so better and better insurance products aren’t necessarily the way to build customer loyalty and engagement. Rather, I increasingly think, insurers need to think of new ways to provide a range of services around insurance that people actually want to buy—and that, crucially, give the insurer the kind of ongoing contact that builds loyalty.
Here’s an obvious example. When customers make an auto claim, all too often the insurance company simply pays out. Why not offer the replacement service? Companies that fit new windscreens, for example, often advertise that they deal with the insurance company “on your behalf,” a service customers really value. The insurance company should be making itself the “service portal” for such repairs, right up to handling payment.
The growing use of telematics provides a perfect opportunity for this type of approach. Looking beyond the obvious (reducing premiums based on driving habits and help in submitting accident claims), telematics enables a carrier to offer restaurant and accommodation information, weather alerts and even car servicing at the right time.
The same logic could apply when replacing a mobile phone that is insured, or indeed many other goods.
Many insurers do offer this type of service for claims, but what about expanding it to position the insurer as a service hub? It’s not such a stretch because insurers can convincingly claim that they really do understand who the good suppliers are, and possess the weight to negotiate really good deals. It’s a fairly bold extension of the traditional insurance business, to be sure, but it’s a way to build a lasting relationship with customers that can be turned into insurance business.
After all, original equipment manufacturers tend to find that servicing warranties is more profitable than the original sale—this could be a chance for insurers to obtain some of this high-margin, repeat business to boost their own bottom lines.
Next time, I’ll conclude with some other examples for the life industry and some thoughts on the type of business model that’s implied if we take customer-centricity to its logical conclusion.