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
Overhauling their distribution channels will help insurers retain digitally savvy customers – but new products and great experiences are essential.
The rise of the digital economy has given consumers unprecedented power over product and service providers. They can search for new offerings, compare prices and switch to alternative suppliers with increasing ease.
To successfully respond to this power shift, insurers need to move quickly to differentiate themselves from competitors and strengthen ties with customers. If they don’t they’ll soon start losing business.
Overhauling distribution channels, as I described in my previous blog post, will certainly help carriers better serve and retain policyholders. However, further changes are needed. Insurers have to provide customers with innovative new products and services. And they should deliver these new offerings through exceptional experiences that are highly personalized and consistently relevant, no matter when or where the customer wants them. In short, carriers need to become their customers’ “everyday insurer”.
Our Global Distribution & Marketing Consumer Survey shows that insurance customers are starting to crave personalized, on-demand, services. What’s more, they often want their insurers to give them more than just insurance. Around 80 percent of the consumers we surveyed would like their life insurers to notify them of the location of the nearest hospital in the event of an emergency. Sixty-four percent of auto insurance customers expressed interest in receiving hazard warnings when they’re driving. Furthermore, 68 percent of household policyholders would consider signing up for real-time alerts that would improve the safety of their homes.
Consumer demand for personalized, online risk-management services is growing throughout the world. Our survey canvassed more than 32,000 insurance customers in 18 markets. Around 57 percent of them were willing to share more information with their insurers in return for further benefits. The prospect of more personalized advice, in return for sharing this information, was a big incentive for 64 percent of this group of customers.
To become an everyday insurer, and deliver highly tailored, location-based risk services, carriers need to make some big changes to how they run their businesses. Key adjustments include:
- Focus on customers not products: Carriers should change their business models to concentrate on the needs of their customers rather than promoting specific products or leveraging key business processes. New digital technologies such as data analytics will provide management information that is vital for this shift.
- Balance investment between core and new businesses: Insurers need to manage carefully the funding required for the growth and transformation of their established, often lucrative business operations, with the spending needed to develop new opportunities that promise good revenue flows in the long term.
Neither of these adjustments is easy. Management mindsets, organizational structures and business strategies all need to change, and change quickly, if insurers are to capitalize on the opportunities emerging from major shifts in consumer behavior.
In my next blog post, I’ll discuss some of the new distribution models that carriers can adopt to become an everyday insurer. Until then, have a look at this link. I think you’ll find it useful.