Once upon a time, insurers sat in the power seat when it came to their interactions with policyholders. The insurers understood the magic behind how insurance was sold, how premiums were calculated, and how claims were adjudicated. Those days are gone. In the Age Of The Customer, consumers are changing the rules and who wield the power. Thanks to all things digital, consumers have shifted from being passive sideliners and are willing — and able — to play more active and demanding roles across the insurance business. That means that digital must now be a core underpinning of an insurer’s customer experience philosophy, not an endpoint.
Just what are the factors propelling North American insurer agendas this year? For starters, it’s about:
- Booming growth in revenues and profits. 2013 was a very good year for most North American insurers –the best since the financial crisis. Many are sitting on hefty policyholder surpluses and capital.
- The fallout from HealthCare.gov. Balancing political winds with project management reality heaped more pressure on already stressed health plans, thanks to shifting deadlines, relaxed employer mandates, and zombie health plans. And as a result, trust across the broad healthcare ecosystem was undermined.
- The risk of emerging insurers to meet the needs of digitally empowered consumers. Consumers are getting being trained to expect even more from their digital interactions. New insurers are coming to market offering new digital experiences that simplify, personalize, empower, and reassure customers.
- Extreme weather. US and Canadian insurers have shifted to a posture of adaptation, and are looking to arm policyholders with new tools to better protect them from natural hazard risks.
- The graying of North American drivers and homeowners. Despite the allure of the Millennials, their parents are proving to be a powerful demographic force. Insurers must prepare for the implications of older drivers and aging in place.
It’s now dawning on insurance organizations that, in the Age Of The Customer, they’ve opened themselves up to the risk of digital disruption. They’ve lagged in delivering the kinds of digital experiences that customers are now expecting and will soon be demanding. And now, they’re threatened by an ecosystem of adjacent players like car manufacturers, utility companies, telecom firms, and sensor and wearables manufacturers, whose utility and access to consumer data has placed them dangerously close to the core of insurance. In this race for consumer mind and wallet share, insurance carriers must pick up their digital pace.
Check out our new report, “Trends 2014: North American Digital Insurance” to read more about the five customer actions that insurers have to take this year.