While carriers have talked about customer centric business models in the past, surprisingly few have made significant progress in this space. The “prizes” are real and easy to describe: more engaged customers, better retention and perhaps the ultimate goal: greater levels of cross selling which translates into increased profitability.
In the market today, other industries are honing their craft in this arena through a combination of analytic capabilities, tools deployed for mobile customer utilization and cross channel capabilities that allow customers to start a transaction in one place and then shift “lanes” when the spirit move them. With another record setting online shopping holiday season now behind us, retailers like Amazon have continued to reset, forever, what we will think of as a good customer experience. Traditional competitors struggle to survive being “Amazoned”.
Concurrently, large US banks have been aggressively crafting their own customer-centric strategies. This now includes similar channel shifting capabilities, allowing customers to decide themselves what a “great” experience should feel like. For leading banks, this now includes providing value added advice and enabling channel-agnostic transactions which demonstrate a clear understanding of what it means to view a financial institution from the outside in … rather than the other way around. Informed, enabled and empowered customers remain loyal to a firm that anticipates their needs; somewhat paradoxically, this investment can lead to better profitability from improved service.
Leading insurance carriers are now waking up to this idea of customer centricity and putting meaningful resources behind actions targeted on attracting and retaining high value customers. Today, this is perhaps most clearly evidenced by P&C carriers that have moved to integrate web properties, call centers and mobile apps. Several have now created compelling and engaging experiences for clients while using technology to create competitive advantage for themselves. By using data analytics they are also able to share targeted advice with customers while position themselves to offer “next best ideas” that can introduce an Amazon-like component to interactions. By integrating social media into this mix they further enable a business model that allows customers to do business whenever, and however, they want.
This is possible for life and annuity carriers too, but it will require dedication of time, talent and resources. One of the largest US-based L&A carrier’s recent creation of a customer-centric strategy with an EVP-led enabling organization provides a potential glimpse into the future. There are emerging signs of integration between web and social media capabilities that are foundational to a customer centric, experience driven, model. While a small number of other carriers are also showing similar commitment to planning for the future, many are not. Another very large US-based L&A carrier hasn’t set up a Facebook capability to date; searching for them introduces a different company based in the UK with a surprisingly similar name. Another has no presence for their American operations although they do have a strikingly robust offering for customers in Lebanon.
As retailers and banks discovered, crossing the tipping point when mobile and social capabilities go from interesting curiosities to mission critical tools can happen surprisingly quickly. Insurance carriers should factor this into near term plans and budgets. This isn’t like fine wine; the problem won’t get better with time. Making up for lost ground later can be both difficult and expensive. Conversely, some of the investments in regulatory, compliance and security initiatives that are highly dependent on data analytics (e.g., Know Your Customer, transaction monitoring) can provide a meaningful down payment for customer centric initiatives, given that both are dependent on strong data analysis capabilities. This, in turn, can provide a terrific collaboration opportunity for CIO’s and their marketing counterparts. Now is a great time for meaningful action; the future will be here before we know it.