What can insurers do to effectively compete in today’s complex and rapid marketplace? Based on my conversations with existing and prospective insurer customers, as well as leading industry analysts, I recommend the following six strategies.
1. Digitalize ‒ peer-to-peer insurer Lemonade recently garnered headlines and one of its main selling points is the fast and digital experience it claims to provide. “From signing up to submitting a claim, the entire experience is mobile, simple, and remarkably fast,” said Lemonade president and cofounder Shai Wininger, according to Paul Sawers of Venture Beat. “What used to take weeks or months now happens in minutes or seconds. It’s what you get when you replace brokers and paperwork with bots and machine learning.”
Customers are used to omni-channel service in almost all other areas of their lives, but insurance has unfortunately lagged behind. Effectively competing in today’s market will not be possible without a full digital insurance suite that offers an omni-channel experience.
2. Appeal to Generation Y (Millennials) ‒ Generation Y is clearly an important segment for insurance carriers of all types, especially in terms of the future. This demographic will represent 75% of the global workforce by 2025 and has an expected inheritance of more than $17.8 trillion.
And yet far too many members of Generation Y have traditionally been uninsured and less satisfied with their insurance than other generational groups. Sapiens’ eBook, Winning Over ‘Y’, offers our recommendations and insights for helping transform this demographic into loyal and long term insurance customers.
3. Increase Customer Engagement ‒ insurance is a “low-touch” industry, with insurers infrequently contacting their customers. As a result, insurers miss opportunities to incentivize loyalty and cross- or up-sell to their existing customers.
This lack of contact creates a vacuum that an exciting new competitor can easily step into. Steps 1 and 2 above, along with a modern policy administration system, will help insurers increase customer engagement.
4. Leverage Existing Ecosystems ‒ traditional insurers possess substantial customer bases and perhaps equally important, industry relationships and ecosystems. For instance, the connected home offers tremendous long-term potential to insurers, many of whom have already formed innovative partnerships and ecosystems to capitalize. One example is the partnership between Nest Protect (smoke and carbon monoxide alarm) and Liberty Mutual.
5. Offer a One-Stop-Shop ‒ insurers with packaged deals that include both life and annuity and property and casualty products can offer a one-stop-shop customer experience based on maximum convenience.
6. Partner with a Pro ‒ in addition to innovative software suites and vital services, an experienced and proven vendor can act as a trusted advisor to insurers, bringing best practices that have saved scores of other leading insurers time and money.
Many of the tips here include approaches that Sapiens has long been advising our customers to adopt. Hopefully these six strategies will help you stay head of your competition.