Recent research undertaken by Target Group shows that consumers have not been well engaged by insurance companies to date; 85% of our respondents confirmed that they prefer to use the web when it comes to researching, buying or checking policies but that more than one in three find the experience “very confusing”.
New breeds of company – Uber, Amazon, Facebook, Whatsapp etc. understand how to engage, personalise, suggest and fulfil the needs of the consumer yet they largely don’t manufacture or create their own content, or own their own inventory.
This got us thinking about the similarity with personal lines intermediaries.
In our survey, consumers confirmed that while price (80%) and product (60%) remained their key drivers, brand (42%) was also a key consideration when meeting their insurance needs.
50% of consumers advised that on-line marketplaces were the easiest to do business with on the web, suggesting that clever insurers would do well to understand how they can leverage the power of these brands in distributing their products.
Preparing to embrace the distribution opportunity in an effective way, rather than viewing these brands with their millions of members or followers as a threat, would appear to be a sensible tactic for any insurer looking for new markets of scale.
In treating these brands in the same way as personal lines intermediaries, there would appear to be a sizeable opportunity for those insurers that can provide comparable on-line experiences; focusing on business relationships and symbiotic partnerships as the key.
Some good examples of this are Google’s Nest Labs, which provide automated devices for the home, and their partnership with Liberty Mutual, also Direct Money, who have created a unique channel partnership model with major consumer focused brands in South East Asia.
For those able to participate in these newly formed alliances, and as a result remain relevant and adaptive, the benefits are huge. This benefit extends to all insurer models regardless of whether the model is based on affinity partnerships, brokers, direct or new data driven relationships.
The challenge for insurers is to start now with incremental and iterative steps. Costly legacy policy administration platform replacement or upgrades are not a pre-requisite; neither is spending many years building your own digital platform. Careful selection of packaged distribution solutions could be vital to keep pace with the rate of change within the market.
By leveraging these new businesses, insurers can potentially concentrate on what they do best while having true opportunities of scale through the brands themselves.
We provide software solutions, such as IF Channel that are a distribution enabler across web, call centre, mobile & tablet. Focusing on the relationship between product and channel allows unparalleled flexibility and scalability