With regulatory restrictions, an ever-increasing competitive landscape, as well as a connected and moving client base, like all market sectors the distribution of insurance has to reinvent itself in the digital era. But, in light of the reduced number of customers buying insurance products in store, how can we meet customer expectations in terms of digitalisation, and at the same time keep a human and personalised customer experience?
Despite their need for autonomy, customers still need to be advised. How, then, can we put the human touch back into customer relationships, at the right time and on right distribution channel?
Though relatively spared from big changes compared with other markets, since 2012 the insurance industry has seen some important developments: changes in regulation to foster competition, high increase of insurance comparison sites positioned as the new agent, as well as the emergence of direct insurers. There are now so many new factors with a direct impact on traditional models of insurance distribution.
Though the digital revolution is clearly in full swing amongst established market players (online policies, mobile apps, smart devices, etc.), there are still several challenges which need to be overcome with regards to distribution. The well-established players on the market are taking the time to think about the role of each channel in the customer relationship, and are following through with bringing together different sales channels so as to satisfy cross-channeling in the client journey.
Within all these developments, one in particular relates to the difficulty of achieving customer loyalty when the customer is ever more clued up and, now, an expert at finding the best offers at the best price. Now less sensitive to brand image, the digital customer cross-checks and compares several sources of information before signing a policy. The act of searching for information is now done online and is one of the first stages in the customer journey.
Integrating the customer’s new digital ecosystem
Despite the fact that selling direct has become widely available, the insurance customer still needs (and always will need) human contact, particularly when signing up to complex and specific policies. In an attempt to stand out from insurers selling direct to consumer, established players still using intermediaries such as agents or brokers are facing a double-challenge; on the one hand, having to reduce their distribution costs by digitalising their admin processes, whilst on the other, being able to upgrade their physical distribution network in an aim to create a unique and far superior customer experience.
Aware of the risk of “uberisation”, the majority of players in the sector must, then, maintain their efforts to achieve digital transformation, particularly by digitalising their sales channels and putting into place paperless management processes. But beyond the implementation of a omni-channel approach or the pursuit of optimising distribution costs, above all they will need to be able to integrate the customer’s new digital ecosystem to match their new uses and needs as closely as possible, to then identify new drivers for growth.
Count on an integrated omni-channel strategy
As a hybrid model aiming to get the best of both worlds, the multi-access distribution model is based on an integrated omni-channel strategy, and is becoming an increasingly attractive option for those in the industry. In this case, it’s the customer who chooses his or her preferred contact method (on-line, via text or call centre, or going in store), and this is at every step in the customer journey. The goal is simple: to replace the agent at the heart of the customer relationship by giving them the opportunity to interact better with customers and, therefore, the ability to further detect new needs.
Upgrade the physical network
Within an insurance agency, staff play an important role in the omni-channel approach on several levels. They must be able to:
- Put the dazzle back into the in store customer experience, by putting “phygital” strategies into place. These aim to integrate the digital aspect into physical spaces, by making interactive information stations accessible, as well as tablets for customers so they can discover offers by themselves, for example.
- Rethink the role of the agent in the omni-channel approach by repositioning their role as advisor or specialist.
- Digitalise the agent’s job, by tweaking their level of training and their work environment to match that of the customer’s digital ecosystem (updated workstation, availability of touchscreen tablets, smartphones, etc.).
- Explore new payment possibilities for third-parties to the industry, so as to prevent them from taking over their channels, and to better integrate cross-channel journeys such as ROPO models (research online/purchase offline).
As well as improving their omni-channel strategy, established players in the industry will also have to think about new means of growth to broaden, diversify, and personalise their offers. They will also have to explore in more detail the opportunities brought about by digital technology such as Big Data and smart devices for predicting and anticipating risk, as close as possible to real customer usage.
Finally, faced with much more intense competition, they will also have to be able to partially reinvent their financial model, so much in terms of innovation in products and services as in the quest for new strategic partnerships and new distribution channels. While the digital route may still seem far off, it does give us a glimpse into the new potential for staff as well as customers.