Article Synopsis :
This whitepaper from Capgemini discusses the factors driving the change in channel usage by consumers, the challenges faced by advisors, (agents and brokers) and innovation strategies to increase the relevance of advisors in an evolving insurance distribution landscape.
The key factors driving change in the insurance distribution landscape are as follows:
- Advent of Digital Channels: Increasingly, consumers are buying policies online as websites and mobile apps make shopping and buying easier and more transparent
- Evolving GenY Preferences: GenY customers—for the most part tech savvy—have a strong preference for greater convenience, personalization and transparency. Bundled offerings turn them off, as they don’t like paying for things they don’t feel they need
- Growing Preference for Hi-Tech Channels: Other traditional industries such as banking and retail are rolling out excellent digital customer experiences and customers expect the same from insurers
- Direct Aggregators: Through new players such as PolicyGenius and PolicyBazaar customers can research, analyse, compare and purchase policies online. Aggregator apps such as Finance Fox and Brolly provide customers a one-stop platform to view and manage all policies
- Value-adding Aggregators: EverQuote and Stride Health provide customers the most suitable policy options based on their profile and preferences, in addition to price
Key challenges faced by advisors include:
- Product Commoditization: As insurers push mainly personal lines products through online channels they tend to simplify them, lending to commoditization
- New Client Acquisition: Targeting new client segments—such as Gen Y—requires technology capabilities incumbents may not possess
- Meeting Client Needs: As insurers try to reach an ever-larger pool of customers they release ever-more new products, with which advisors must keep up
- New Technologies: AI and RPA are already supplanting/augmenting advisors in other fields of financial services and it’s only a matter of time before they enter the mainstream in insurance
The report contains several good infographics on the conversion of challenges into opportunities, the utilization of social media and other technologies, and the strategic value of analytics. Bottom line, the report issues the following recommendations:
Demographic Shifts and Targeted Marketing:
- Advisors need to capitalize on opportunities presented by shifting demographics and focus on their specific needs
- Advisors should look at delivering services to target customers in a manner their customers prefer
- As customers find insurance complex and increasingly demand more information, transparency, and new investment ideas, advisors with their expertise can leverage digital tools that enable financial education and planning
- Advisors should adopt social media to improve customer engagement at all stages to retain current customers and remain abreast of changing customer needs
- Social media also provides a platform to disseminate information, provide personalized service, and gain the trust of clients
Link to Full Article:: click here
Digital Insurer's CommentsThe insurance distribution environment is changing rapidly, with InsurTechs targeting the space and insurance buyers from Gen Y to Boomers becoming increasingly comfortable researching and buying sophisticated financial products online.
We believe advisors, to cope with the changing environment, must develop holistic strategies to target new customer segments, embrace digital tools, and leverage social media to boost customer engagement.
Link to Source:: click here