In my last few posts I’ve discussed the need for life insurers to change their approach if they are to compete effectively for consumers’ retirement investments. We’ve looked at simplicity, innovation and the changing role of advice. This week I’d like to talk about big data and big changes in the supply chain.
The availability of unprecedented volumes of data is making it possible, for the first time, for insurers to move beyond crude demographic segmentation. Today, with sophisticated analytics, they can work out when and what to sell to whom, pricing their products more accurately. They can measure their effectiveness and continually refine their tactics in the light of their success.
Of course, if they can use analytics, so can their competitors. This includes not only other life insurers, but also providers from other sectors who can buy consumer data and use their expertise in sales analytics to offer their existing customers relevant retirement products—the manufacture of which they outsource to willing carriers.
The trend is likely to continue. Insurers are being forced to review their ability to compete as full-service carriers. Those that lack a competitive edge across the spectrum of essential capabilities may be forced to specialize in either manufacturing or distribution.
A related trend is the advent of ecosystems that offer consumers a wide array of related products and services, for example, everything the pensioner needs, from health care and financial advice to retirement homes and garden services. The carrier that creates such an ecosystem can ensure a strong role within it, retaining ownership of the customer while focusing on the services it’s best equipped to offer.
Next week I’ll examine one of the most important changes insurers need to make to remain relevant to their customers: the shift from an enterprise-centric to a human-centric approach. In the meantime, if you’d like to read the earlier posts in this series, you can find them here.