The journey toward greater customer centricity
Advances in technology and the accompanying explosive growth in data are empowering global consumers like never before. To compete in this new era, insurers must understand how consumers make purchasing decisions and what factors influence their choices.
Our Global Consumer Insurance Survey 2012 report “Voice of the Customer” highlighted the importance of customer centricity for insurers. Unfortunately, many insurers are not keeping pace with changing market dynamics and are far behind other industries in meeting customer expectations.
Insurers that are responsive, transparent, highly communicative and technologically savvy—customer-centric, in short—will be the most likely to grow and profit. Through better customer engagement, insurers can influence persistency, retention and reputation.
Customer centricity not easy
Advances in technology and communication are changing customer behavior, but that doesn’t mean insurers should abandon certain venerable core principles:
- Protect the business
- Redefine customer relationships
- Increase productivity
- Diversify revenue sources
- Develop new capabilities and partnerships
New technology and explosive data growth have empowered global consumers in new ways, however, and insurers must understand the new factors underlying purchasing decisions.
There are more than 50 billion connected devices globally, and mobile devices are now the primary communications node for most consumers. This is dramatically changing operating models, forcing insurers to focus on where their sales channels add value.
Where insurers fall short
Our Voice of the Customer survey indicates four areas where insurers are failing to meet customer expectations: service quality, rewarding loyalty, communication and product transparency.
Customers see insurance value as a balance of price, product features and services. They are willing to build long-term relationships and purchase multiple products—with customer-centric providers. In general, insurers must improve communication, as well as recognize and reward their relationships with consumers.
Driven by a transformed regulatory landscape, customers are also demanding clarity and transparency. Insurers that align to a customer-centric model will find the transition to the new regulatory environment less painful.
Becoming more customer-focused
Insurers will need to develop new capabilities to transition from existing product and distribution models to customer-focused ones. These capabilities include customer-centric operating and maturity models, as well as advanced segmentation and data analytics.
Improving customer engagement via lower-cost digital techniques will also be crucial. Call centers will play a critical role, and they must embrace new market trends to drive value.
In the illustration above (click the magnifying glass), we compare how four major global insurers are currently positioned in the five stages of development toward customer centricity.
To surpass the competition and generate significant growth, insurers must change their focus. Innovation demands a shift from short-term/tactical to long-term/strategic decision-making.
Tapping into external discovery centers, labs and industry “observatories” are effective ways to encourage and embed innovation. It’s always valuable to gain insights free from the existing mindset of the organization.
Customer centricity maturity assessment of four global insurers