The insurance sector is being defined by a number of market disruptors. Aspects that may once not have played a fundamental role in the value chain now define whether an insurer, broker or advisor is able to survive and thrive.
Smart technology is forcing the insurance sector to innovate and adapt. This is driving the need for leaner business models with the ability to integrate systems, processes and marketing approaches across channels. Insurers also need to be able to address consumer preferences, questions and concerns immediately, and to be “always on”. All of this is becoming increasingly critical in the new business-as-usual paradigm, with regulation continuing to evolve in the sector.
As each of these elements changes, the competitive landscape is only going to intensify. This will place substantial pressure on traditional insurance models to change and drive innovation. So, how can insurers adapt to the new business-as-usual in order to remain competitive in a cluttered market?
Digitalisation – bridging the divide
Today’s consumers are more connected than ever. Businesses, therefore, need to meet them at the technology touch points where they, the consumers, feel most comfortable. This will serve to enrich the consumer experience, ensure client satisfaction and secure brand relevance.
Industry players need to prioritise digitalisation in order to improve consumer engagement and demonstrate true value to consumers. A key way to do this is to: a) openly embrace technology and constantly test new solutions and b) use this insight to replace outdated legacy systems and invest in advanced technology-integrated solutions to improve operational efficiencies. Businesses that do this successfully will gain a competitive advantage over their counterparts by optimising the buying process online and facilitating different online processes for mobile and desktop engagements, depending on the consumer’s preference.
Adapting to consumer nuances – value for money
Products today need to evolve to include both simple and complex options. But most importantly, they need to be adaptable. Today’s consumer wants products that are tailored to their lifestyle, budget and needs. In addition, the products should be easy to understand and manage.
There are also other considerations. Answers to questions like, “How easy is it to pay my premiums?” or “Does my insurer offer flexible payment options?” are becoming key value adds for consumers and will play a fundamental role in retention strategies for insurers. Finding value in existing products and identifying what today’s consumers really want from their products is fundamental to business success.
Driving elevated customer experience
According to KPMG’s 2017 South African Insurance Survey, there are six factors that make up good customer experience: personalisation, integrity, resolution, empathy, meeting expectations, and time and effort. Today’s consumers want to know that the product they are paying for is unique to their needs, that it is backed by a reputable organisation and that their expectations from insurers are being met. They want to be treated fairly and, in this space, expect companies and advisors to show empathy. So, while robotics and back-end technology innovation are important components for meeting consumer demands, the personal nature of insurance remains an important aspect.
In a digital world where everything is automated and process driven, we, as insurers, have a big job ahead of us. It’s up to us to drive innovation in the way we engage consumers in this changing business landscape. Brokers and advisors that don’t adapt will be left behind.
However, we need to remember that the human touch still has a vital role to play in the insurance space. Sometimes people just want to be heard. As we drive towards higher levels of digital integration and innovation, we must not disregard the importance of direct customer contact. There is still intrinsic value in what can be said over the phone or in person that cannot be assimilated in the same way through digital channels. We should strive to enhance, rather than replace, this personal interaction by embracing digital rather than being afraid of it.