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
Digitally-active consumers, Nomads, don’t have strong ties with traditional banks and insurers and they’re hungry for innovation and online services. They’re a vital market for insurers looking to expand their digital distribution.
The rising popularity of digital services offers insurers a huge opportunity to grow their businesses, beef up revenues and strengthen ties with customers.
Our research shows that consumers throughout the world are hankering for highly-personalized, on-demand, digital insurance products and services. And they’re not just looking for more convenient and less expensive cover. Many of them want to buy advanced risk-management services that help them to improve their safety and health as well as the wellbeing of their families. Seventy-six percent of the more than 32 000 consumers we canvassed, for example, were interested in personalized digital health monitoring services. What’s more, 56 percent said it was important for insurers to provide personalized advice that could help them reduce the risk of loss or injury.
We’ve identified one group of consumers that is particularly hungry for digital products and services. By focusing on this well-defined set of consumers, insurers will be able to improve substantially the effectiveness of their digital distribution channels. We’ve termed this group of digitally-active consumers: Nomads. The characteristics of this new consumer group are shown in the illustration below.
Nomads don’t have strong ties to traditional financial service providers. They’re willing to buy insurance from a wide range of organizations, including digital service providers such as Amazon or Google. Nomads especially value digital innovation. They’re eager to use new digital channels to access insurance products and services. What’s more, 86 percent of them are willing to use automated support services to resolve insurance queries, while 82 percent are interested in auto insurance that’s priced according to vehicle usage.
Such hunger for digital insurance services among Nomads points to big opportunities in this consumer segment for major carriers, although revenue growth is unlikely to match the levels of enthusiasm shown by the survey respondents. Nomads comprised 40 percent of the respondents to our global survey. They included not just young consumers but also people in their fifties and sixties. What they tend to have in common is an eagerness to use digital services, an urban life style and above average income and education
Insurers can’t afford to ignore Nomads. It’s vital that they connect with these consumers and provide them with the customer experience they crave.
Some big insurers, as well as a fast-growing list of insurtech firms, are already targeting digitally-active consumers. They’re launching new digital insurance offerings, often in partnership with tech-savvy allies.
- AXA has teamed up with Trov in the UK to offer a customer-centric mobile, on-demand insurance solution for young consumers who want to safeguard their most precious belongings.
- Achmea firm InShared, in the Netherlands, offers a fully digital auto insurance service that enables policyholders to use their mobile devices to lodge and track claims and organize vehicle repairs.
- Allstate subsidiary Esurance in the US operates a comprehensive digital auto insurance service that allows its customers to use their mobile devices to compare products, buy cover, manage contacts, make claims, receive fuel price predictions and contact support staff.
- Kingsbridge in the UK is using a digital platform to deliver insurance products specifically tailored for freelancers and contractors.
- Ant Financial Services, an affiliate of the giant Chinese digital retailer Alibaba, has teamed up with several international partners, notably AXA in France, to sell insurance products across Alibaba’s Taobao ecommerce platform to digitally-active customers.
In my next blog post I’ll discuss how insurers can adapt their digital distribution channels to suit the needs of the increasingly-influential Nomads. Until then, have a look at the previous posts in this series or the report below. I think you’ll find them very helpful.