Other parts of this series:
Carriers that deliver hyper-relevant products and experiences can quickly capitalize on lucrative new business opportunities.
Insurers that radically change their businesses and use digital technologies to become constantly relevant to their customers will substantially outperform most of their competitors. They’re likely to grow revenues and profits faster, withstand industry disruption better, and capitalize on new opportunities more successfully.
Our research shows that about 10 percent of insurers recognize the critical importance of being constantly relevant to their customers. These companies have already overhauled their businesses to ensure they can always meet the changing needs and wishes of their policyholders. They’ve transformed themselves into what we call “Living Businesses”.
Living Businesses use a mix of physical and digital channels to give customers access to services whenever and however they wish. The exceptional customer experience they provide is tailored to meet the lifestyles and preferences of their policyholders. Furthermore, Living Businesses constantly improve and expand their offerings to deepen relationships with customers and attract new business.
Close analysis of an elite group of 13 insurers that we’ve identified as Living Businesses found that these companies are already surpassing carriers that have yet to change their traditional business models. They’re excelling in three key areas of business.
- Targeting emerging opportunities – Insurers that are Living Businesses understand the changing needs of users of their digital services, they adapt their business strategies to capitalize on these changes, and they fund new growth by optimizing costs elsewhere in their organizations.
- Designing products and services around the needs of customers – Living Businesses draw on insights from analytics systems to innovate and develop compelling customer experiences and to ensure that all the products, services and experiences they provide are personalized and relevant.
- Rewiring business and organizational culture – Living Businesses cultivate a culture that constantly seeks to improve the quality and relevance of their products and services. They adjust their organizations to sharpen their customer-focus and they equip employees with the tools they need to strengthen relationships with policyholders.
By properly aligning their resources and business strategies with the needs of their customers, Living Businesses are far better positioned than their more traditional competitors to anticipate market shifts and the rise of new trends.
Our research into Living Businesses spanned not only the insurance sector. It surveyed about 1 000 companies from major industries across the world. More than 300 of these companies provide financial services.
It is clear from studying Living Businesses in a variety of different industries that companies that achieve high degrees of customer relevance are likely to outperform firms that retain well-established but increasingly outmoded business models. We calculate that Living Businesses are three times more likely than their peers to achieve above average revenue and profit growth. They’re also 50 percent more likely to be sufficiently well prepared to weather changes in their business cycles or disruption caused by the spread of digital technologies.
In my next blog post, I’ll describe the five essential pathways that insurers should follow to become Living Businesses. Until then, have a look at this link. I’m sure you’ll find it useful.