Value and service should be the main focus when buying insurance, but too often it is price. The Financial Market has driven consumers down the price comparison route. In reality we should be marketing the importance of value comparison and trustworthy service.
How has the insurance market changed?
The insurance industry has recognised that we are in a digital market place. The internet has changed how people research and shop for goods. The internet is convenient and quick.The Changing Client Journey, a recent survey from Chubb, found that 35% of respondents cited saving time as the top reason for buying insurance on-line. Furthermore, over half of the audience have shopped online for home insurance in the past 12 months. This trend is rising. 61% of insurance customers stated their intention to buy their home insurance on-line in the future.
But insurance products are not like shoes, handbags or washing machines. It is not as simple to compare like for like features and benefits, so price too often becomes the differentiating factor on-line. As an industry we need to work out how to simplify the complex and help consumers understand the all the nuances of the insurance product. They should be clear about the terms and conditions irrespective of the buying channel. Buying decisions should be based on need as well as budget.
Not all insurance customers are alike
This should be stating the obvious, but do we really know our customers before instigating change? Understanding what our customers want has to be the first step in any transformation process. Although ‘digital’ and ’24/7 buying’ are the buzz words in the industry, we must also understand that some customers still like working with brokers. In fact, in the same survey from Chubb, almost 70% of respondents said there were advantages to working with agents and brokers as part of the insurance shopping process.
So even if customers start the research on-line, many like to check with an expert before actually buying. Waking up to the digital needs of insurance customers must not result in forcing everyone to buy on-line. A customer should be able to start the buying journey on-line and complete the purchase on the ‘phone or face to face, without the need to repeat all their personal details multiple times. Moving from on-line to off-line channels has to be seamless, an insurance ‘click-check-and-collect’ service. Those customers who are happy to complete the whole process on-line have high expectations. Amazon has set the standard as a virtual retail shop and customers now expect the same service for insurance.
So how do we change the insurance focus to value and service?
Delivering the right service to insurance customers and prioritising value over price starts with the fundamentals. In our view, these are three key components to delivering the right insurance proposition to customers, every time!
- Cultural and operational. In a recent blog, Create the path for insurance innovation, we highlighted the need to get the organisational structure and culture right first. Service ethics have to be part of the company DNA. There also needs to be a real appetite from the top for innovation that will drive change from a customer perspective.
- The right people. Attracting and retaining the right people are essential if any business wants to embed the right company culture. In How to hire the right people, a Forbes article highlights the need to prioritise cultural fit over technical expertise. Indeed, according to research by UK recruiting firm Robert Half, almost nine in 10 leaders (87%) had found that in practice the most successful hires happened when they evaluated cultural fit as part of the recruitment process.
- Technology. In our article Insurance needs the right technology to survive, we explored how to chose the right solution. But that is only the first step. The important focus is then how to use insurance technology for the benefit of the customer. Any digital journey should help customers understand the value of insurance and fully understand the benefits and exclusions of the cover without the need to read pages of small print.
Once these three components are in place there is a real opportunity to change the insurance customer focus to value and service. A huge side benefit of this approach is that we will also improve trust in the insurance market.