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Traditional Insurers Must Think Like Amazon to Win Over Consumers

The insurance industry, as a whole, lags behind many other industry sectors in its digital adaptation, but the advent of customer-centric technology providers is forcing the industry to change its thinking.

To date, insurers have been protected by customers’ tendencies to stay with providers and the advantage of having years of experience and proprietary data. Both were barriers to start-up challenges that included the need for large capital reserves, according to McKinsey.

But challenges to insurers’ profitability are arising. Those include premiums that will decrease as risk decreases – especially in the auto industry, where smart technologies are making driving more safe.

In addition, data analytics will help assess risk more accurately than current models. “With so much data at our fingertips — how fast someone drives and how much they (sic) indulge in risky behavior as revealed on social media. Savvy competitors could cherry-pick low risk clients,” says Property Casualty 360.

Differentiate Through Service

To compete, insurers will need to distinguish themselves with better and more unique services, says Forbes.
They may have some success by copying (successful) retailers – who have had to get engagement right or simply cede their business to those, such as Amazon, that do. Now insurance companies are facing the same challenge. The same demand from consumers for frictionless personalized experiences in retail and other industries has now hit insurers head on. This movement is being fueled by billions of dollars in investments in InsurTechs gunning for their businesses.

The old model of going to see “Bob the insurance agent,” who you also saw at your kid’s soccer game Saturday, is dead. A Bain and Co. survey found that most insurance clients have had no contact with their insurers in the past 12 months.

That may need to change for insurance companies to acquire and retain customers. In the age of Amazon, insurers need to create a buying experience and personalized relationship that will make sourcing, buying and maintaining insurance easy. In this highly competitive marketplace, how can insurers keep pace with consumer demands and keep InsurTechs at bay? They build preference and loyalty by adopting a consumer-centric business model.

Think Like a Retailer – Because You Are

The digital age has created fierce competition in retail. To continuously provide value and build loyalty one consumer at a time, retailers slice and dice staggering volumes of data to derive real-time insights. In turn they develop 1:1 marketing to give consumers what they want and build 360-degree views of their suppliers to maximize efficiency, all to provide a better consumer experience.

Developing a truly consumer-centric insurance experience starts with the basic notion that insureds are consumers first. Let’s look at what your insurance consumers want:

  • Comprehensive information — Insureds need to answer their questions about policies, coverages, costs and when their payments are coming without waiting, paperwork and multiple phone calls. And forget about them actually going to an office. Being able to quickly and easily access this information on their phones, through apps or a web portal, is crucial to acquiring and keeping customers.
  • Precision search and recall — If people are searching, they want the most relevant answers. Any situation where a person actually needs their insurance coverage is extremely stressful. It takes very little frustration to send your potential customer looking elsewhere. Search that provides no results, too many results, or irrelevant results is a business disaster.
  • Privacy — Insurers hold the medical and financial data of their insureds, so it’s imperative that your database, not just your network, be locked down and secure. It’s very hard to win back trust once your breach makes the nightly news.
  • Reliability — How many times have you gone on Google or Facebook and found it down? Probably never. If you build an awesome online and mobile experience, they will want to come, so make sure it’s built on a reliable enterprise platform that scales and is resilient.

Those objectives aren’t as difficult to meet as you might think. One advantage to a late-onset digital maturity is that there are tools out there to help achieve them – even with data spread across the organization and in different formats.

The Enterprise NoSQL multi-model database handles wide varieties of data with relative ease. More importantly, you can manage data after it is in the multi-model database – letting you have a 360-view of your customer while allowing adaptability as your understanding of your customers and their needs evolves.

Insurers don’t need to become Amazon to be successful, but it is almost a guarantee that the insurers who create a retail-like digital platform will have distinct market advantage.

Is your technology hampering your digital transformation strategy and holding you back from delighting your customers? Click here if you want to find out more and how we can help.

VP Vertical Strategy and Global CSO Healthcare & Life Sciences | MarkLogic

Bill Fox JD, MA is the VP of Vertical Strategy and the Global CSO of Healthcare and Life Sciences at MarkLogic. He is a former attorney and healthcare executive with 25 years of experience and is a nationally recognized thought leader in healthcare predictive analytics, big data, program integrity and data security and privacy.

Bill serves on the HIMSS Health Business Solutions Taskforce and Business Edge Magazine, the thought leaders panel of Predictive Modeling News, and the Board of Directors of the Medical Identity Fraud Alliance.

He is a prior appointee to the Strategic Planning Committee of the National Healthcare Anti-Fraud Association and is a former Senior Fellow at the Jefferson School of Population Health. He has held healthcare leadership positions at Emdeon, Booz Allen Hamilton, and LexisNexis. He is the former Deputy Chief of Economic and Cyber Crime at the Philadelphia District Attorney's Office, Special Assistant United States Attorney for the Eastern District of Pennsylvania and law firm partner. Bill is a graduate of Temple University Graduate School and the Villanova School of Law.

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