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Want to engage insurers on their own terms
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Industry rethinking business models
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Customers seeking more convenience
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On-demand policies emerging
Cynthia Ezekwe
The insurance industry is on the brink of a customer-centric revolution driven by the rapid growth of digital channels and changing customer expectations. Customers now expect easy, fast, and seamless interactions with their insurance providers. They want to engage with insurance companies on their terms, through the channels and devices of their choice. This shift is forcing insurance companies to rethink their business models and adapt to meet the evolving needs of customers.
Personalisation has been a buzzword in the insurance industry for years. But it’s now more important than ever, as customers increasingly demand tailored products and services that cater to their specific needs. With access to vast amounts of data, insurers can now leverage advanced analytics to gain a deeper understanding of their customers and provide tailored products and services.
The growth of mobile and digital channels has revolutionised the way customers interact with insurance companies. Customers now expect the same level of convenience and efficiency from their insurance providers as they do from other industries, such as retail and banking. This has led to a shift towards omnichannel experiences, where customers can access and manage their policies across multiple devices and channels, at any time and from anywhere. Omnichannel experiences allow insurers to create a seamless and consistent customer journey, which has become a key competitive advantage.
These changes are also giving rise to a new type of insurance product – on-demand policies. These policies can be purchased and activated on a short-term basis, providing protection for specific events or activities. They offer flexibility and affordability for customers, while also opening up new revenue streams for insurers.
Studies have shown that the trend towards convenience is being driven by the rise of e-commerce and mobile apps. E-commerce has transformed the way consumers shop for goods and services, with many customers now expecting to be able to make purchases with just a few taps on their smartphone. This expectation of convenience is now spilling over into the insurance industry, with customers expecting to be able to purchase policies online and manage their policies from their mobile devices.
As explained by Sam White, chief executive officer of Stella Insurance, the insurance sector has been slow to adapt to the changing needs of its customers. For example, while many industries, such as retail and banking, have embraced digital transformation, the insurance industry has been slow to offer the same level of convenience and accessibility. For example, most insurance policies are still purchased through traditional channels, such as brokers or agents, rather than online.
“I think, fundamentally as a society we’ve probably got lazier and lazier, and our expectations have got higher and higher. Businesses now have to keep pace with that. This is a world where customers are almost expecting businesses to read their mind and know exactly what they want, at any time. On top of this they want to require almost zero interaction,” she said.
According to White, insurance companies are still lagging behind in terms of understanding and meeting the expectations of their customers. She acknowledged that many insurers still rely on traditional methods of product delivery and customer engagement, which can be inconvenient for customers who are used to the convenience and speed of digital experiences.
The emphasis on customer experience, according to White, is not just about providing additional services, but about creating a deeper and more personal relationship with customers. She argued that insurers should aim to create a “human-centred” experience that makes customers feel valued and understood.
White warned that insurers who fail to adapt to the changing needs of their customers may find themselves losing out to competitors who are more customer-focused. This could mean losing customers to new digital-first insurers, or even to non-traditional competitors like big tech companies, who are gradually entering the insurance industry, providing services which allow users to compare insurance products from multiple providers.
