Other parts of this series:
- Shifts in consumer behavior offer big opportunities for insurers
- The new “everyday insurer” will win customers by delivering innovative products and exceptional experiences
- These new distribution models will help insurers deliver the personalized services consumers crave
- Successful digital distribution depends on a key market: Nomads
- Personalization is the key to luring lucrative insurance Nomads
- Don’t forget traditional insurance buyers in the rush to please digitally-active Nomads
To connect with increasingly influential digitally-active consumers, Nomads, insurers need flexible distribution channels that meet the unique needs of each customer.
Tech savvy, digitally-active consumers are fast becoming a critical market for insurers throughout the world. Carriers that fail to connect with this increasingly influential sector will miss a host of new business opportunities and are likely to lose large numbers of customers to their rivals.
This new generation of consumers, we’ve termed them Nomads, is demanding constant, personalized digital experiences from all their service providers. To satisfy this craving, and capitalize on the huge potential of this market, insurers need to transform their traditional distribution and service channels. Even carriers that have already embarked on digital strategies should re-examine their operating models and the customer experience they provide to ensure that they meet the needs of this important group of consumers.
Nomads, who comprised around 40% of our recent global survey of 32,000 consumers, are eager to use digital channels to access insurance products. Around 58 percent of the digitally-active consumers we canvassed would prefer to buy insurance online. Moreover, 42 percent were very willing to receive computer-generated advice when buying insurance.
To reach Nomads, and build lasting relationships with them, insurers need digital and multi-channel distribution models that are highly flexible and meet the unique needs and preferences of each customer. Insurance providers must constantly demonstrate that they know and care about each individual who buys their products and services. They must also show that they can be trusted with their customers’ personal information.
Key factors to consider when designing distribution channels for Nomads include:
Emphasize personalization: Customer-centricity and flexibility are essential. Nearly half the Nomads we surveyed were interested in buying pay-per-use auto insurance online or securing temporary cover for specific needs using mobile devices. Carriers should demonstrate to their customers how their behavior can improve their insurance benefits.
Embrace mobile and social: The widespread practice of researching online and purchasing off-line (ROPO) is giving way to end-to-end digital experiences where products and services are sought and bought online. Nomads are at the forefront of this shift. Nearly a quarter of those we surveyed have already used a mobile app, instant messaging service or social media platform to make a claim. Insurers will increasingly need to deploy chatbots to enhance the customer experience they deliver. Insurtech firm Lemonade has already demonstrated the effectiveness of such technology with its Maya automated assistant. So has multinational carrier Europ Assistance with its Roadside Assist service.
Move beyond indemnification: Nomads want insurers to enhance the quality of their lives by helping them and their families become healthier and safer. Sixty-three percent of the Nomads we canvassed were willing to share personal information with their insurers in return for such benefits. Insurers should expand their product offering to include personalized risk management services and other proactive services.
Find partners beyond insurance: A growing number of companies, including big digital service providers, retailers and insurtech start-ups, are muscling into the insurance industry. Most Nomads have few qualms about buying cover from these, often tech savvy, newcomers. Carriers need to identify opportunities for partnerships, co-operation and ecosystem alliances that would extend the reach of their distribution networks.
In my next blog post I’ll discuss two other types of consumers: Hunters and Quality Seekers. Understanding the characteristics of these consumers will help insurers build distribution channels that increase customer loyalty and connect with new purchasers. Meanwhile, have a look at the previous posts in this series or the report below. I think you’ll find them useful.