Other parts of this series:
- Insurers need to respond quickly to win and retain customers in a market hugely disrupted by Google and Co.
- Insurers are equipped to meet rising consumer demands, but their advantage could be eroded
- Insurers can learn from Google and Co how to disrupt and dominate a target market
- Insurers must become constantly relevant to their customers or they will lose revenue opportunities
- Digital enablers help insurers nurture innovation and develop products to fuel revenue growth
- Insurers should align their market roles with key digital enablers to drive up revenues and curb costs
Insurers need to become constantly relevant to their customers and offer them a stream of personalized products and services that are always appealing and available. If they don’t, many of their customers will migrate to other providers. They’ll also miss a lot of new digital business opportunities.
One of the biggest challenges facing insurers in the new consumer-to-business (C2B) era, where consumers dictate how suppliers should serve them, is to become constantly relevant to customers.
Google, Apple, Facebook, Amazon and Alibaba (GAFAA) have set the standard. They provide their customers with highly tailored, contextual digital services that are always available. Such high levels of service are critical in the C2B era. Our research shows that 57 percent of US consumers, for example, are likely to abandon an online purchase if they don’t get an immediate response to a request. Consumer expectations are going to get higher.
If insurers don’t become constantly relevant to their customers, and offer them a stream of personalized products and services that are always appealing and available, they’re likely to lose business. And they’ll be shut out of many of the new digital opportunities that are fast emerging.
In my previous blog I identified some of the roles insurers could adopt to succeed in the C2B era. They include “relationship player”, “platform provider” and “innovation playmaker”. Whichever roles insurers choose, they’re going to sit with a big problem. How do they make the transition from their current business model to a new digital model designed for the C2B environment? More specifically, how do they balance investment in digital technology intended to modernize and improve their existing systems and processes with the funding needed to capitalize on new digital opportunities. This dilemma is the intersection between “Go Digital” and “Be Digital”. The first is about getting the right focus in the current business. The second addresses the need for digital enablement that will create new revenue streams in the future.
In juggling the demands of both agendas, insurers must not only decide how best to allocate funds. They must also select partnerships and alliances that will support one or other of these alternatives. This is not easy.
We’ve identified three key approaches that will enable insurers to accelerate their “Go Digital” initiatives and increase their relevance to their customers:
Deliver digital platforms: These platforms allow consumers to choose how they engage with insurers. They foster close relations between insurers and their customers. Carriers can use these platforms to deliver specialized services to key groups of customers; wealth management advice to affluent customers; and tailored insurance products to small businesses, for example.
Tap experiential living services: By teaming up with fintech firms and network operators, insurers can provide customers with living services that adapt in real-time to their changing needs. Such services increase carriers’ interactions with customers, encourage greater intimacy with them, and provide valuable consumer data.
Develop new businesses: By expanding their products and services, insurers can increase their interactions with customers and generate additional revenue. Potential avenues include “digital attacks” on new markets, sectors or territories; data monetization; niche digital services; blockchain applications; and venture funds.
By launching some or all of these business portfolios, insurers will be able to compete more effectively in the C2B environment, build closer ties with their customers and maximise their current technology infrastructure.
In my next blog post, I’ll discuss how insurers can create an enabling environment that encourages and supports Be Digital innovation.
Until then, take some time to read some of these links. I think you’ll find them interesting.