Customer Centric Insurance: Fixing Broken Trust
Customer centricity is today’s burning priority – and this changes the way insurance is explored, evaluated, and sold. But what does customer centricity mean and how can firms get good at it?
Everything we know about insurance today – business model, products, payments, distribution, underwriting, and operations – will look very different in the next five to ten years, experts say. A Forrester Research report quoted in a previous FintechOS article was ringing a bell amid last year’s COVID-19-induced crisis: the number one priority for insurance companies before the pandemic was growing revenue, but nowadays insurers’ burning priority is customer experience.
The question is: why? And what could insurers do in light of this trend?
To understand what customer centricity really means, and how to use customer-centric products and services to win, we interviewed several industry experts for this year’s Amsterdam Fintech Week event (4th-11th June), where FintechOS will host a live session looking at the opportunities in the insurance market.
You can read below a selection of best quotes for this blog article:
“A big issue”
“I think customer centricity in insurance is a big issue. Not on the level of all those people working hard for their customers, but there are a couple of circumstances that make this such a challenge. One of the key issues is not the insurer, but it’s us – human beings. We all know how important it is to manage risks, and insurance is an important solution, sometimes mandatory. But we really don’t like to get busy on the topic. We’d rather not think about it all. Or we only want to think about it as brief as possible. So, while we may be challenging insurers to offer Amazon-like performance, the current frequency of touchpoints is low: the topic is important but terribly unsexy. So, if there is a way to avoid having to deal with this, we’ll take it.
In my view, a lot of the typical aspects about customer centricity in insurance (company culture, conservative mindset, silo organization, crude data approaches) to some extent are the result of “us customers” allowing it to happen, not prepared to invest more in this ourselves. Hence the rise of initiatives finding new smart ways to engage with customers promoting smarter, more healthy lifestyles – we know our limitations, we need to be protected, also from ourselves!”
“If it ain’t broke don’t fix it” rings true
“Traditional insurance does struggle with customer centricity. The adage, ’If it ain’t broke don’t fix it’ rings true. Over the years, many traditional insurance providers have managed to ink out profits, with little to no change in how they operate. Consumers are now demanding greater customer service, by the way of efficiencies and timely documentation deliver and claims payments. Traditional insurance simply has not been forward thinking. There is limited talent internally, in some cases, to drive the change to digitization. Historically, losses activity and reduced profits have driven change. If margins are lower, traditional insurance will act, which creates missed opportunities to be a leader in this space. Companies such as Lemonade has seen this an opportunity and is capitalizing.”
“Put the customer at the heart of everything you do”
“Customer centricity means to put the customer at the heart of everything you do. You have to start from the customer, what whoever that may be, whether it’s consumers or business or the broker.”
“Knowing your customer – understanding who they are and their specific needs is key both from insurance product perspective but also for how you guide them through your product journey (…) Talking to the customers is the very most important thing that we do. We built that into our design process.”
“The way that you collect and analyze data is one big part of customer centricity and how you can achieve it. Real-time data can create affordable and personalized products that can keep pace with market demands, accelerating trends and the new risks that go with them.”
“Customer-centricity is about value, not just functions”
“Customer centricity is about value, not just functions. So, the highest customer centricity in FS design is a mission-driven product, one that really makes the world a better place for living. And it clearly answers the question – Why does this FS exist? And this is not about common functionality such as easy transactions, fast onboarding, or clear balance. Because it’s not enough anymore, today’s customers request value that brings emotions.”
“Customer centricity is a culture, not a project. To be successful, customer centricity must pervade every action and decision in every department because every interaction with the customer, reinforces what the company really thinks of the customer.”
Amsterdam Fintech Week (XFW) gathers all stakeholders and players active in the ecosystem of digital finance. The goal is to connect players within the European Fintech space and to involve key stakeholders to participate. You can check out the agenda and register here.
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