Could A Transformed Insurance Industry Reflect Customer Lifestyles?

This article summarises a recent white paper I wrote on the insurance industry. You can locate the full version of the white paper on the TTEC website here.

Modern insurance grew from coffee house conversations in London. The idea of using insurance to hedge against the risk of a property fire directly originated from the Great Fire of London in 1666 and Edward Lloyd's coffee house - opened in the 1680s - eventually became the insurance market Lloyd's of London.

Insurance can save, and improve, many lives by reducing intolerable risk, but what's wrong with the industry and insurance products today?

Many customers will often select a policy based on the lowest price, rather than undertaking a more nuanced evaluation of the product. Even when insurance is not mandatory (UK auto insurance for example) it is common to use price comparison websites to compare policies, so the customer is often directed to focus mainly on the price, rather than the quality of the insurance product.

The only other time that a customer will generally interact with their insurance company is when they need to claim. This can be a fraught interaction as it may involve the customer discussing a flooded home, the death of a family member, or describing a recent auto accident. The most significant engagement with the customer is often when the customer is stressed and facing whatever challenge they had insurance for in the first place.

The insurance industry needs a similar focus to the challenger banks. To be a lifestyle partner and how to be there throughout the entire life of a customer, so our focus needs to be adjusted from individual transactions - a purchase, a claim, a call to the customer service team - to a 40 or 50-year relationship where the customer feels supported at each stage in their life across a variety of products.

How can this be achieved?

Look at the full year financial results of Aviva PLC for some ideas about how major players are changing. When Group CEO, Amanda Blanc, presented the results on YouTube she naturally focused on investment and revenue, but I found her comments on transformation and business performance far more interesting.

She said that insurance customers value prices, a trusted brand, great service, ease of access to help, and sustainability - actually, customers really care about how big companies function today. Amanda also said that if Aviva is going to transform how insurance works in the future then they must focus on offering a simple and consistent service to customers from the cradle to the grave.

A look around at some of the other videos on the Aviva YouTube channel reveals some interesting efforts to insert the brand into several different areas that might not seem the traditional focus of an insurance company. Aviva has partnered with the World Wildlife Fund to build a sustainable strategy on climate change - the company has made a significant effort to improve how flood insurance can be paired with actions to reduce the risk of floods in the first place.

They have also built a community volunteer network across the UK in partnership with the Red Cross. This team of thousands of people receives training and support so that when a local community crisis does happen - such as a flood - there are local people who know what to do to mitigate the effect of the crisis.

Aviva is an example of how one company in the insurance industry sees their future as more of an ongoing partner to people and communities, rather than just a cheap policy found on a price comparison site. This is a cultural change from the transactional product-focus of the past.

This is not a simple transformation. It requires a focus on customer service processes, how to offer products and support across a lifetime, and how to play a sustainable role in communities. It's not easy, but the opportunity exists right now.

This article is extracted from a longer and more detailed white paper I recently published on the TTEC website here. Please follow this link to access the longer version.

CC Photo by Juliane Liebermann