Another set of trends that’s worth reading is the Trends impacting service design in 2014, compiled by Fjord, a subsidiary of Accenture Interactive. Two of them are of particular interest for insurers because they point to areas of disruption in which insurers could easily leverage their existing expertise to take the lead.
The first of these Fjord calls “Underwriting digital” and it talks to the way in which insurance can turn itself from an intermittent grudge purchase into a provider of valued services. Smart mobile devices are the key enabler here, for they generate a flood of data that insurers could use to add value to customers by helping them to manage rather than insure against risk.
Expanding from risk insurance to risk management is indeed something that consumers want. The Accenture 2013 Consumer-Driven Innovation Survey makes this very clear, with 92 percent of respondents saying that it is critical (44 percent) or good (48 percent) for an insurer to play this expanded role. It’s a trend that is even more pronounced in the younger age brackets.
Fjord and Accenture Interactive go on to identify telematics, the connected house and wearable technologies as areas in which insurers could develop services. These are all aspects of what one might call the smart environment, and I’d like to look at them in greater detail in subsequent blogs.
Meanwhile, I just want to mention a second trend identified by Fjord which I think is something insurers should have top of mind: “Every product is a service waiting to happen.”
This relates to a shift in approach that we have been talking about to clients for a while now. It’s the move from selling products to providing a customer experience—of which risk management is a part. Data from our Consumer-Driven Innovation Survey makes a compelling case for the need for insurers to reframe what they do in terms of offering a relevant customer experience rather than a set of products, no matter how good those products are. Fjord predicts that “2014 is the year that digital insurers with an appetite for innovation will begin to court genuine consumer loyalty.” They will do so not by being more efficient or offering better products, but by solving problems for their customers.
In fact, I would go further and argue that insurers wanting to generate sustainable value in the markets of the future will need to start learning how to deliver customer experiences that are enjoyable in themselves, and that go beyond insurance to position them as true “lifestyle partners.”
One thing’s for sure, the new market entrants everybody anticipates will be doing just that! Next time, let’s explore the wonderful world of telematics and the disruptor opportunities it offers.