In-depth: Why the omni-channel agency model is both digital and human at its core
At a glance:
- The omni-channel agency model is highly relevant as digital consumers increasingly expect on-demand services with a human touch, and China is already pressing ahead in this area
- Even for actions generated by AI, the advisor becomes the personal hub of all communication between the consumer and insurer
- In China, companies including the social media video platform TikTok, are already looking at how they can harness the power of their AI matching engines to power financial planning services
- The move towards an omni-operational model is, however, not a trivial matter for legacy insurers
Jump to section
- The omni model is human at its core
- Strength in numbers: WeSure, TikTok, Good Doctor
- Further reading
A plan for all seasons
The omni-channel approach that encompasses all possible touchpoints – digital, remote and human – has become the objective of a number of insurers over the past couple of years. One of the main challenges – aside from tech infrastructure – has been the attitude of consumers. There have been fears that insurers will take a leap of faith, build the technology and consumers simply won’t turn up. However, as the digital marketplace develops and establishes itself, so consumers have found the omni-channel approach more appealing, leading to strong demand.
The market is warming to an omni approach
The study identified four consumer personas – pioneers, pragmatists, sceptics and traditionalists. Unsurprisingly, the sceptics and traditionalists had a relatively low appetite for omni-channel banking insurance – 53% and 33% respectively, compared to pioneers (80%) and pragmatists (72%). These latter groups trusted financial entities to look after their long-term interests more, both scoring over 80% against 62% to 63%, but there were promising signs even among those who were sceptical of the new approach (see Accenture graphic below).
The traditionalists have little interest in integrated products (19%) and find branch visits to be a positive experience (54%). But this is not shared by the sceptics, whose satisfaction with branches is only 31%. More telling is their willingness to share data, which is at 80%, only 5% behind the pragmatists.
Though the sceptics are the largest group at one third (33%), this suggests it is in the hands of banks and insurers to demonstrate the benefits to this group in order to convert them. Traditionalists who demand a branch-based experience will continue to be serviced by omni-channel, but they are a dying breed, making up just over a fifth (21%) of the consumers surveyed.
Omni may be a difficult cultural shift for incumbents, but they’re pushing against an open door. This data is corroborated by Investec’s private banking research (see image below). It shows good levels of engagement across each client group, with a bias towards purely digital and light interaction.
The omni model is human at its core
Even before the COVID-19 pandemic, insurers could see that the traditional advisor structure was under pressure and needed to be reimagined. There is more on this process in Hugh Terry’s article that accompanies this one here.
To be successful in a digital business, omni must not simply replicate the different channels in digitally connected silos. The agent is not simply an important component of the consumer experience but must become the hub for the whole omni-channel.
In this model, omni places the agent or advisor before the client as the conduit for all knowledge and interaction.
Even if a consumer uses digital first all the time, the service is underpinned – or even curated – by real flesh and blood individuals. All interactions: sales, marketing, renewals, feedback, are intermediated by the omni-channel agent, putting a human face even on digital interactions.
When accessing digital services, consumers will not find a faceless entity, but a real person on a landing page that encompasses information, marketing and the offer of assistance. The narrative of being there to help is owned by the agent (see Manulife and Generali images demonstrating agent landing pages below).
The advisor becomes the hub of all communication between consumer and insurer, even actions generated by artificial intelligence (AI) and machine learning (ML).
Simple data like birthdays and other important events generate contact that offers opportunities to draw individuals into engagement. This is done through presentation of information, needs based content and feedback requests. This takes old school banking relationships and makes them the model for the 21st century digital insurance experience.
This new relationship between omni advisor and consumer requires seamless integration of sales and advice. Advice tech will be crucial in supporting the advisor’s new role in order to increase their productivity, to generate new data, mitigate business risk and to improve the customer experience and in turn the perception got the industry.
The Chinese experience
Chinese insurers are investing heavily in bringing their channels together, in the knowledge that a well-capitalised integrated platform introduced by a big tech player could well disrupt their own business model.
However, The fact is that working as a life insurance agent in China is no longer an attractive career option, especially in the big cities. Economic growth has spawned a range of better-paid jobs and average agent income is now 70% of what it was in 2007, while wages in other gig economy sectors have increased 12%-15% per year.
However, Ping An and Taikang, are two notable exceptions that have bucked the trend. Though not immune to the general decline in agent activity, both have consistently achieved much higher premium per agent than most state-owned competitors.
Ping An’s agents are, on average, twice as productive as the rest of the industry. There’s no easy answer to explain how they have achieved this, but there are two major differences that can be highlighted.
First, Ping An identified a decline in agent productivity as the industry undertook mass recruitment of agents in the early 2000s. It then downsized its agency to about 200,000 individuals, while the rest of the industry continued to take on as many agents as possible. This focus on quality over quantity set Ping An up well for the next two decades.
Secondly, Ping An is unique in its ability to cross-sell products and services from its other business units. For example, 51% of Ping An’s personal auto insurance was sold through cross selling, mainly by life agents and telemarketing (for renewal) in 2011. This more varied source of income has been an effective proposition for Ping An to attract and keep agents. Finally, Ping An has infused its agency channel with apps, WeChat accounts, and digital portals, that deliver everything from recruitment and training to benchmarking of agents (see image above).
Strength in numbers: WeSure, TikTok, Good Doctor
Ping An is not alone in developing an omni advisor approach. WeSure now assigns each of its customers a dedicated agent who provides them with a range of financial planning services.
Some of the other unique features of WeSure include:
– The ability to send child medical insurance policies as a gift through WeChat;
– Premium discounts for users who score highly on WeSure’s pedometer; and
– A term life product design for young adults that specifically covers aviation accidents.
This takes the relationship beyond a mere product push to a more partnership-based model.
TikTok, China’s ubiquitous video sharing app, has amassed an army of agents that use the platform to engage a younger generation. TikTok has its own financial division, with a national broker’s licence and an in-house InsurTech. This is laying the foundations for TikTok to replicate, and it hopes, to surpass, the cross-selling prowess of Zhong An. TikTok uses live streaming of financial planning to reach its audience and embeds short-term critical illness and travel insurance products for its users that have viewed related content.
TikTok is also collaborating with brokers and InsurTechs to integrate interactive features into its financial planning content. Though these efforts are in their early stages of development, TikTok’s journey to apply the AI-based content matching algorithms that fuelled its success in social media, to more complex offerings from life and health insurers, will be fascinating.
And in healthcare, Good Doctor has moved into omni by deploying offline pods (see image below) that offer diagnostics and drug dispensing, reinforced by Ping An’s brand of insurance and healthcare.
The bottom line
The omni advisor model offers exactly what insurers have been seeking from their digital transformation – integration of siloed functions, simplified operations and data capabilities augmented and ultimately driven by AI and ML, to create a sustainable, more profitable business.
The move towards an omni-operational model is, however, not a trivial matter. Transition to omni requires a considerable commitment in terms of capital, resource, and culture. There can be no half-hearted attempts – it really is all or nothing.
Insurers that are struggling to manage their legacy liabilities must consider, carefully, how they might deploy omni strategically, rather than tactically.
Yet, the omni advisor model has the potential to transform the productivity of insurers – particularly life insurers – and may solve the perennial problem of raising agent productivity. How far this will go remains to be seen, but it is likely the number of agents will reduce, while the prospects for those remaining in the industry will greatly improve. This has the dual benefit of attracting new blood to become insurance agents, and higher calibre candidates who can see the potential in a career as an agent.
Finally, it ticks all the boxes for consumers, by meeting the needs of all consumers, whether they are digital only pioneers, or stick in the mud traditionalists. What’s more, this isn’t the model of the future: it has already arrived. Research from McKinsey (see further reading below) shows that the pandemic has been the catalyst for business consumers – traditionally serviced by reps – to embrace the omni-channel and accelerate its adoption more widely.
TDI POV: The future of the advisor in a digital world – Alarm bells are ringing
TDI webinar: Omni Advisor – The Future of Agency
Accenture report: Human touch in a digital world, consumer trends
McKinsey report: Omnichannel in B2B sales
McKinsey report: Winning in digital ecosystems
McKinsey report: The future of car buying, omnichannel