Jane Tweddle, Industry Principal, Financial Services at SAP
Insurance is no longer a simple linear process. The industry has reached an inflection point, with the explosion of internet access via mobile devices changing the way consumers expect to be able to use everyday services. Many customers are now digitally savvy and more connected than ever before; they will actively search for information that they need, ask for advice and opinions online and through social networks, and fluently use a wide range of different channels interchangeably to get the job done. Insurers have an opportunity to attract these customers, yet, for many institutions, this will involve a fundamental rethink of strategy, as well as the infrastructure which supports it.
Changing consumer expectations
Consumers now expect a more personal level of service than ever before, whether over the phone, online, through mobile, or on social channels. This sentiment goes hand-in-hand with how other industries – such as retail – are able to deliver highly personalised and relevant products and services to customers, quickly and easily. This growing expectation is especially significant when considering the different channels that are now available for customers, in fact, a 2013 study from SAP found that 73% of financial institutions are currently unable to provide a consistent experience across products and channels.
Avoiding insurance poverty
However, these expectations for a personalised service could present a dilemma for insurers.
The concept of insurance has always been about a form of ‘crowd funding’ in that a group of people are charged an amount for insurance and those who make more claims benefit at the cost of those that don’t. With big data exploding – on average doubling every year – using this information to provide more and more individualised insurance offerings could potentially flip the balance. Meaning that the industry creates a situation where a number of people are priced out of taking any insurance – a key problem that not only the industry is grappling with, but regulators and government too. Insurers will need to consider what insights they can gain from their data that enable the best bundling of products and prices for individuals to ensure a win-win with their customers, by considering the wider socio-economic issues.
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A single view of the customer
In order to differentiate and establish relevance to their customers it’s important that insurers look to provide a consistently high level of service, whilst also ensuring that customer context continues across the transaction journey. Analytics and database technologies are critical to providing a single view of the customer across all channels, and allow businesses to provide relevant, customer-centric offers and services based on real-time data. Insurers can then more accurately anticipate and react to customer needs and provide improved service.
Additionally, to compete effectively now and into the future, insurers need a lot more agility around products, and need to be able to develop, bundle and launch new products in a short space of time in order to react to customer needs, market trends, competitors and changes to legislation. This will require better IT infrastructure and platforms that provide greater agility to allow them to react or change quickly. Different approaches such cloud solutions or hybrid deployments can significantly support this need for greater agility.
The key to success then is around simplicity and greater control for the insurer in meeting its customers’ needs, through richer customer information and innovation in real-time. It’s not enough to be seen to implement newer technologies and platforms if they’re not joined up. Insurance companies need to be truly omni channel, which means providing a seamless front end to the customer, supported by a resilient, consolidated infrastructure interfacing with the back end systems of record.
The changes being driven by consumers today have undoubtedly resulted in the insurance industry having to respond with the use of new technologies and become more agile. Furthermore, as mobile technology continues to develop and innovate, increased expectations becoming entrenched in every generation, from teens to silver surfers. This makes it even more imperative for insurers to take action now as moving to a true omni channel model is a journey, and won’t be achieved overnight.
For many organisations the challenge will be around consolidating legacy infrastructure, using platform technology, and moving away from siloed channels to bring everything into one simplified, stronger system. It’s clear that those who are already considering alternative ways in which to manage investment into infrastructure will have the competitive advantage when it comes to delivering a customer-centric service.