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Common Strategies for Achieving Insurance Customer Centricity

Eventually, insurers will need to position themselves to respond quickly to changing customer expectations in an increasingly digital and connected life.

Over the past three years, insurers of all sizes have embraced the concept of "customer centricity" driven by the need for more profitable growth. For those that have started down the path, the debate over who is actually the customer has largely been settled. For them, it is the end customer, rather than the agent or distributor, for example. Even for those companies still contemplating what customer centricity means to them, we've seen a shift of investments in people, tools, and technology to help them understand the end customer and create an organization that can successfully sell, serve, and support them.

To achieve this goal, many insurers started with customer data -- with a single view of the customer projects that were multi-year efforts to create a unified view of each customer. Some have gone beyond the basic website redesign and data projects that often signal the beginning of the "new customer journey" design, to creating innovative services for improved customer attraction, reach, and retention. Currently we're seeing an increased investment in mobile technology, from self-service apps to instant policy renewals via SMS to real-time selling tools for intermediaries via mobile devices. There have also been investments in new types of agency spaces to reach customer segments like millenials. We have seen what seem at first glance to be unconventional partnerships in Silicon Valley, innovation labs, retail partnerships, and other highly visible incubator projects in search of the next great thing that will differentiate one insurance company from its competition in the eyes of the end customer. And we are just at the tip of the iceberg with the Internet of Things and the opportunities, challenges, and threats that come with more connected devices.

The pace of consumer adoption of new gadgets, their willingness to share personal information in exchange for something of value, and the ubiquitous connectivity that fuels consumers' appetite for "right here, right now" are also driving the push toward customer centricity. The "right here, right now" needs of the customer require a speed of change that makes it challenging for the insurance industry to adapt.

Other industries are positioning themselves well for the increasing need for "right here, right now." A quick scan of the retail industry shows how quickly it can anticipate and feed that appetite for "right here, right now" expectations. For example, Amazon, already known for exceptional customer service, has introduced two initiatives, Amazon Prime Air and AmazonFresh, to provide same-day delivery for its customers. To put it simply, these offerings anticipate a change in consumer expectations in the near future, and they keep the company ready to respond when new markets become viable.

Some insurers worldwide are currently examining how they can respond to customer expectations. They are experimenting with small projects so they can be first to market. Others are content with being fast followers once the profitability of the new market has been confirmed. Lastly, there are those that are content with doing business as usual. Eventually, insurers will need to position themselves to respond quickly to changing customer expectations in an increasingly digital and connected life.

[Previously from Hutson: Fight Insurance Price Sensitivity With Social Interactions]

The insurers that have aligned their organization around the end customer and enabled their organization to meet the "right here, right now" expectations have adopted some common strategies.

  • They develop strategies to increase customer engagement across digital channels.
  • They embrace the omni-channel customer experience and continue to mature their analytics capabilities.
  • They innovate around digital products and services created through the Internet of Things, mobile, and social platforms.
  • They digitize back-office processes for more agile and flexible operation.
  • They digitally enable their employees.

By incorporating these ideas into your insurance enterprise, you can be a leader in customer centricity, as well.

Kathy Hutson is Global Insurance Front Office Segment Leader for IBM Global Insurance, specializing in technology solutions that help insurers develop compelling customer experiences and winning distribution strategies. She has more than 14 years of experience in the ... View Full Bio

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Caroline@igate
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Caroline@igate,
User Rank: Apprentice
12/8/2014 | 11:19:05 AM
Re: Staying ahead of the game
Kathy-ann - You are on point.

Many companies are realizing that and finding creative ways to stay ahead. As CX consultants, we are seeing this more and more.

Thanks for such an insightful post.

Caroline.
Kelly22
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Kelly22,
User Rank: Author
12/5/2014 | 4:19:14 PM
Staying ahead of the game
You're right that the retail industry is a strong model for insurers looking to improve their customer experience. Insurers that are currently taking steps to reshape their strategies and be first to market will undoubtedly win in the long run. I think those that are currently content with doing business as usual will soon find themselves falling behind their competitors.
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