Disruptive Behavior: Power to the People – 1insurer

Article Synopsis :

Buyers have a negative view of the insurance profession – seeing it as a ‘necessary evil’ or a grudge purchase. That the relationship between policyholder and insurer requires a restart lies at the heart of the white paper, “Disruptive Behavior: Power to the People” by 1Insurer.

Consumer technology shifts power from insurance carriers to insurance customers . . .

While many insurers still ‘sell’ in terms of Customer Relationship Management (CRM) the world – especially GenY – ‘buys’ based on Customer Experience (CX). At present, agent-based services still rank as the most important component of CX, especially in North America and the Asia Pacific region where, respectively, 47% and 49% of respondents rank face-to-face communication as ‘very important’. However, within three years, online assistance is expected to exceed face-to-face in European markets and attain near equivalence in North America and Asia Pacific on the same measure.

Per the authors, Why it matters:

• Consumers are shaping a ‘digital future’ – and the new channels they’re using tend to be typified by poorer CX
• The challenge for insurers is to make sure they maintain strong customer service as customers look to access products and services on demand and with devices that are ‘always on’
• To complicate things even further, customers already expect a ‘joined up’ approach. A policy bought on a mobile device may have a claim managed through a combination of phone calls, tweets, emails, picture messages and mobile app inputs
• Insurer systems need to be able to provide this seamlessly

The key question then becomes: How are insurers responding to these new realities? According to the report:

• 63% of Financial Services companies in the UK increased their digital marketing budgets this year, with the average increase running at 21%. A third of respondents say CX is their major focus
• 48% of companies in Europe and 45% in North America are increasing CX budgets by more than 10% with a sizeable proportion of these (35% and 24% respectively) increasing by 25% or more
• The equivalent figures in Asia Pacific are 50% and 40% reflecting the ‘mobile first’ nature of the many emerging markets in that region

Key challenges include:

• Technologies are rapidly evolving alongside more demanding customers who bring opinions on what good CX looks like from their experiences in other areas
• The industry is dealing with a significant number of legacy platforms that are poorly placed to deliver on these measures. Whilst many carriers have embarked (or are planning to embark) on projects to deal with this, key decisions on systems, tools and processes will shape the investment experience and determine success for years to come
• The industry is at a cross-roads in terms of where it goes next – will an insurer be ‘responsive’ or ‘reclusive’ on these challenges?

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