Accenture’s recent survey of more than 400 senior insurance executives found that carriers are increasingly moving from a product-focused sales process to one that is intimately grounded in the needs of the customer. Almost two-thirds (63 percent) of survey respondents said moving to needs-based selling is a high priority for them.
To accomplish this shift to customer intimacy, insurers are recognizing the need for customer-centric capabilities within their organizations. Fifty-nine percent of respondents are prioritizing the move to a more customer-centric model and 48 percent already have or are planning to build a customer-centric hub.
This is a significant shift from the single interaction channel of old, when the customer experience was often outsourced to the agent or broker. And it’s something we think needs to be a cornerstone of insurers’ distribution strategies.
Mastering customer data is the key to providing relevant and personalized experiences. Recognizing this, many survey respondents rank the improvement of their data and analytics capability as their top priority for distribution technology investments. Following on from that, a large percentage of insurance companies are developing customer segmentation models to move beyond their traditional product strategies toward a more customer-centric strategy.
Mastery of data and analytics is also critical to understanding the potential value of individual customers, the right channels to reach them, the right time to engage, and the right offers and messages to use. These insights enable both marketers and agents to make better use of their time and resources.
In a marketplace where product features and benefits are easily copied and price is often the primary selection criterion, an investment in customer-centric innovation is the best defense against commoditization and a solid bulwark against price competition.
However, the ability to demonstrate a high degree of customer-centricity and advanced digitization will not only increase insurers’ chances of participating in the more powerful ecosystems—an ambition of many insurers—it will also gain them a more prominent and influential role within those ecosystems. Such collaborations, with established players in other markets as well as with start-ups and other innovators outside the sector, can help insurers meet customer expectations and provide them with end-to-end buying experiences.
For insurers who want to become a disruptor themselves, rather than a casualty of disruption, we recommend concentrating on six key areas:
- Make innovation and customer-centricity the cornerstones of your distribution strategies.
- Proactively define your position in new ecosystems, cooperation models and partnerships.
- Commit to your chosen business and distribution models, moving beyond a succession of pilots.
- Move from indemnification to real-time protection.
- Strive for simplicity of access, transactions and offerings.
- Focus agents on advice, value-add and deeper customer relationships.
Insurers need to move swiftly and assertively, adopting a clear position in each of these areas if they are to become digital insurers of the future.
To learn more, register to download the Reimaging Insurance Distribution report.