Direct Line And Aviva Both Demonstrate How Modern Insurance Requires Transformation

In my work advising on customer experience (CX), I’ve often talked to insurance executives that struggle to connect to their customers. It’s a problem that is fairly unique to insurance, because this is a product nobody really wants to ever need to use. Nobody wants to “enjoy” the process of making a claim. Often the customer doesn’t even want to buy insurance, but it’s mandatory - like auto insurance for anyone driving a car.

So how do insurance companies connect to their customers when the most common interactions are the purchase or a claim? Either the insurance company is taking your cash or you are facing some kind of crisis and need help quickly. Neither situation is ideal for planning a fantastic experience - this certainly isn’t retail therapy.

I think a robust and realistic approach to innovation is the answer. Modern insurance companies need to stand above the comparison engines and find new ways to engage with their customers so they start building a supportive relationship. The insurer needs to be seen as useful and helpful, not just an essential purchase that would be avoided if it were at all possible.

Direct Line has been exploring this approach. They just hired Ash Jokhoo to be their new CIO - he will be in post from next month. Hiring a new technology leader is clearly a good time to start launching digital transformation initiatives, but the really powerful measure they have taken is to now make the CIO role a part of the executive committee.

Mr Jokhoo was previously the Chief Data and Information Officer at Virgin Atlantic, a company with a reputation for innovation in their industry and he has spoken recently about the innovative approach Virgin took when reacting to the Covid pandemic. This focus on transformation, innovation, and the appointment to the board should create a strong focus on a technology-enabled future for Direct Line.

Aviva has a similarly strong approach. Since 2016 they have been supporting the Founders Factory, a business accelerator founded by Brent Hoberman and Henry Lane Fox in 2015. Over 200 businesses have now been created by the Founders Factory and they have together raised over £400 million in funding.

In their most recent move, Aviva has extended their support for another five years and pumped an additional £10 million in funding into the accelerator. The partnership is investing in start-ups that focus on emerging trends and CX in the financial services sector. Themes and areas of focus include wellbeing and mobility and the opportunities created by artificial intelligence and machine learning.

Over the past five years the Aviva and Founders Factory partnership has resulted in a number of successful businesses being created and accelerated including Acre, Shepper and Tembo.

This is a really smart approach. The amounts that Aviva is investing are relatively small compared to building similar capabilities in-house, but the start-ups can focus on innovation in the areas that are of interest to Aviva. The funding helps to create successful new companies that, at the same time, strengthen the ability of Aviva to innovate and transform their own business.

Insurance companies like Direct Line and Aviva can clearly see that insurance must evolve so it becomes an important part of a customer’s lifestyle - it should be a choice, not just a necessity. They can only change their industry through exploring new possibilities and ideas.

Let me know how you think modern insurance companies can evolve to engage more meaningfully with their customers. Leave a comment here or get in touch via my LinkedIn.

CC Photo by Tierra Mallorca