American and Canadian insurers are facing some big challenges in 2015. Customer experience expectations, their willingness to consider a growing array of new options to buy insurance, and new competitors creeping into the business of insurance are pushing traditional insurers into new digital strategies. It’s no longer a question of digital channels or “other” when it comes to the customer journey; they’re now intertwined. Digital-dependent customers are eyeing new and more digitally savvy market entrants, while demanding more control over the experience and how their personal information is used. This year, digital insurance teams are crafting agendas that satisfy their firm’s hunger for increase market share and revenue balanced with changing demographics, adaptations in response to extreme weather, and regulation that has lagged the changing realities of digital. One thing’s for sure: Insurance eBusiness teams can’t afford to wait around, but they also can’t afford to make the wrong digital decisions.
Just what are the factors propelling North American insurer agendas this year? For starters, it’s about:
- Uneven economic growth in North America. The 2008 financial crisis? It’s a distant memory in much of the US, but not for all. By most measures, the US economy is thriving, driven by rising consumer demand for homes, cars, and consumer goods, and, by extension, insurance. And in oil-producing Canada the decline in gasoline prices isn’t good news: Canada is threatened with recession.
- More severe weather. Even though North American insurers didn’t suffer through a string of big events, 2014 was still an expensive year for insured losses, thanks to tornados, hail, and wind. And with the impact of weather-related events only expected to become more severe, digital insurance teams and even agents are stepping up to help keep customers safe, their assets in good shape, and their bottom lines protected.
- Insurance marketing mettle tested by Millennials. Few younger American and Canadian consumers buy insurance, partly because they don’t own a lot of stuff, are burdened with student loan debt, and partly because many insurers haven’t found a way to effectively engage them.
- Digital distributors heap stress on agents and brokers. Talk about a tempest: Google getting into the car insurance business captured a lot of attention. But it’s not only Google. A host of firms are eyeing insurance and offering competitive pricing, greater convenience, and in some cases, comparable advice online. Agents and brokers are under pressure to prove their worth.
- Regulators struggle to keep up with the pace of digital change. Canadian provincial and American state and federal regulators are under pressure to reform regulatory structures that are not keeping up with new technology. The efforts of digital teams to address these new risks through new coverage types and services are being stymied by state and provincial regulations that haven’t kept pace.
Digital technology has done more than simply enable the insurance customer in 2015: Your customers and agents have been emboldened by the speed at which they can consume find information and share their experiences. Your customers, your products, your distribution channels, and your competitors are increasingly digital. To ensure that their firms thrive in this transformed world, eBusiness executives must help their firms become a digital business – one that uses digital technologies to deliver both superior customer experience and agility and operational efficiency.
Check out our new report, “Trends 2015: North American Digital Insurance” to read more about what this year holds for insurers.