There are more web-connected devices in the world than people – over fifty percent of the world are online every day. Let’s find out how the insurance industry can grow with the digital revolution.
- 79% of insurers say they are still learning about digital.
- 57% have operating models that do not facilitate digital.
- 89% don’t consider past interactions when recommending.
Be Digital or Fall Behind
- Many insurers rely on new products and services for business growth.
- Outperforming organisations use data more extensively than underperforming organisations throughout the entire customer life cycle.
- Embracing digital to drive business model innovation has a 5 times greater impact on growth.
- They subsequently experience a 54% higher level of interest and desire for their products and services.
Catch Up with Your Customers
Customers want to interact with you how, when and where they choose across multiple digital channels.
This lead to:
- Customer retention
- More cross-selling
- Business growth
- Better brand reputation
Which is good news because 78% of customers trust peer recommendations.
Challenges Facing the Insurance Industry
In a recent survey carried out by EY, insurers were asked about their views on the role of digital in insurance. The key findings were:
1. Insurers acknowledge their current low levels of digital maturity and the need to take action.
- Almost 80% of respondents do not see themselves as digital leaders.
- They are aware they are behind other industries in customer engagement, analytics and adoption of mobile and social media.
- The majority believe they are still learning to use digital capabilities for a competitive advantage.
2. Companies have high digital ambitions – but are they grounded in reality?
- While insurers aspire to future digital leadership, they are still too slow to realise their ambitions.
- More than two thirds of insurers have delivered some quick wins.
- But only 10% cite transformation changes to digital capabilities.
3. Insurers are holding themselves back.
- Internal factors including: legacy technology, slow pace of delivery and cultural constraints, are hindering digital progress.
- Focusing on key enablers like culture and innovation will release significant future value.
- It will also enable companies to better grasp digital business opportunities as they arise.
4. Improved retention through higher quality customer experience
- The two biggest drivers of digital strategies are: enriching the customer experience and regaining more direct control of the customer relationship.
- Retaining existing customer is an increasing necessity.
- It should be a critical and measurable benefit of any improvement in the customer experience.
5. Distributors are also digital customers
- One of the top three inhibitors in implementing a digital strategy are intermediary and agent channel strength (or resistance).
- Sharing the benefits of investment in digital and communicating a clear mutual value proposition to deliver a better customer experience will help to minimise channel conflict.
6. Analytics are crucial for digital success
- Segmentation, customer data analytics and predictive modelling emerged as the digital skill set most in demand.
- These are closely followed by technology and marketing capabilities.
- Analytics capabilities are a prerequisite for extracting maximum value from digital investment.
7. Insurers need to embrace the mobile and social media wave
- Neglecting the growth of mobile will tarnish your companies’ future.
- Insurers should recognise social media’s value as an inexpensive marketing tool.
- Also as a means to engage with and influence sceptical, digitally-savvy younger consumers.
- Mobile is the catalyst for rising customer expectations.
- Insurers will increasingly leverage the Internet of Things (IoT).
- The role of traditional advisors / agencies is becoming irrelevant.
- Non-insurance players are posing a threat to insurers.
- Development of sensors could lessen insurance claims.
How insurers should respond?
- Create moments of engagement
- Standardise the use of technology
- Build analytics infrastructure
- Be obsessed with your customer
- Frame the investment argument for digital
- Embed a culture of innovation into the organisation
Create a robust digital strategy which begins with: A plan and a good understanding of the practical realities of implementation. Each of these elements will shape each other as digital capabilities develop:
- Corporate strategies
- Customer expectations
- Target operating models
- Enabling frameworks
- Source from Top Quote