By Florence de Vries
It is no secret that, in a few years’ time, only today’s general insurance game-changers will be left standing. Research shows that today’s insurance customer is discerning, time-poor and largely, autonomous. So what do they want from their insurers and how should insurers adapt to give them what they want?
The always on, always connected revolution
When it comes to buying financial services products, the ‘always on, always connected’ revolution has augmented the notions of convenience and simplicity. The internet and social media platforms are the undisputed hallmarks of this revolution. “Insurance” is not a word that appeals to the millennial generation or generation x (the ostensible current and future consumers of insurance) because they generally have less assets to insure and order their food, clothes and taxis from apps on their phones.
Information about South African insurance consumption – including socio-economic disparities – is fed into a larger composite of data – big data – which is analysed to reveal certain trends about people’s preferences. It was widely assumed that general insurers would use this information to gain a more accurate understanding of their clients and, in so doing, shift from being product to client-centric. But in reality, it seems that the translation of customer insights into innovative ideas to make people’s lives easier has been relatively slow.
The shift to client-centricity is a journey
Where general insurance companies abroad have tried to keep abreast of technological advancements by creating products like on-demand insurance and launching insurance policies for driverless cars, South African insurers are still largely reactive and centred on selling products.
The South African insurance industry is a complex one, riddled with challenges such as price wars, a slow economy and increased regulation. A 2015 study about the local insurance sector and innovation by KPMG found that the impact of regulation is seen to be the greatest hindrance of creativity in businesses.
A 2015 report published by Deloitte entitled Insurance disrupted, states that “…traditional general insurers could be losing relevance for customers because their products and services are failing to keep pace with technological developments in the connected world.”
Local industry insiders have always argued that customers only deal with their insurer once a year, or never. Yet, even though consumers are time-poor, they genuinely seem to want to interact with their insurer, especially at the claims stage.
In line with the spirit of the Treating Customers Fairly regulations, consumers want to know that their company cares about them, their possessions and their claim. In this respect, many insurers have invested in social media platforms, online utilities and channels like the media to educate people about risk. However, this may not be enough.
Where to from here?
The 2015 South African Customer Satisfaction Index (SAcsi), an independent national benchmark of customer satisfaction, recently revealed that when it comes to general insurance, the link between expectations, perceived quality and perceived value is especially important in a difficult economy.
Insurance is not only about providing the right cover. It’s about recognising that your business’ future success is inextricably tied to customer understanding and innovation.
Local insurance companies are turning the technological tide albeit in a measured way. The 2015 KPMG study revealed that South African insurers respond to the challenge around innovation differently, with some looking inwards while others have started innovation incubators.
Game-changing insurers will meet challenges in its environment head-on while it creates products, processes and a transparent internal culture that supports a client from the awareness stage through to the claims stage. These businesses will also learn to anticipate future client needs and align operations toward creating solutions around that.
Florence de Vries is a communications manager in the financial services industry.