Digital Adoption — And How Is The Insurance Industry Adjusting With It?
As we move towards the future, the exponential growth of cost comparison sites has completely transformed the insurance sector over the past decade, making it easy for consumers to switch to the provider offering the best product at the lowest cost.
Loyalty between customers and providers is no longer what it used to be For insurance firms struggling to keep pace, a clear and effective digital transformation strategy will be essential in driving growth and competitive advantage.
Though cost is a clear driving force, starting with people — the staff, customers and wider stakeholders — and understanding exactly how they engage with existing platforms and processes, is key to long-term success.
Change in consumer behavior
In today’s digital World consumers expect fast, efficient and real-time results when purchasing a product or service online.
This is no different for the insurance sector, where firms failing to respond to both digital and consumer behavioral changes — primarily the expectation of better products and instant engagement — are quickly falling behind.
This transformation in lifestyle and resulting consumer behavior has led to a change in insurance requirements amongst this age group, with many millennials, for example, now seeking temporary car insurance for either recreational or professional means.
This change in demand extends to how insurers deal with and respond to claims, where speed, ease, and accessibility is what results in renewals.
The insurers able to adapt and adhere to this demand, understanding that consumer behavior drives change, are the ones getting it right and developing a competitive advantage.
Digital Transformation starts with people, and in the case of the insurance industry, it starts with the pain points people experience when engaging with insurance providers.
The growth of insurance comparison sites has completely diminished consumer loyalty, which means the providers able to present their product with ease and clarity, supported by real-time relationships with customer service representatives, are securing increased market share.
Change in insurance products
Change in consumer behavior has changed the insurance product, or particularly, how it is presented to the consumer.
Industry growth combined with increased competition and product choice has forced providers to be more competitive in how insurance products are positioned.
Those which are clear and simple to understand, purchase and claim for, are far more likely to experience growth, compared to those likely to require contact with a call center representative.
The tech-savvy, modern day consumer does not have and does not want to dedicate time to lengthy purchase or claim processes.
Therefore, insurance providers able to create a fast, efficient and cost-effective consumer journey are far more likely to experience growth.
Analyze and respond to change
The exponential growth of tech platforms means insurance providers now have access to more data than ever before.
However, if this data is not analyzed or utilized effectively, insurance firms will fail to adhere to changes in consumer demand.
Not only do insurance providers need to regularly assess how consumers engage with their platform and products, but they also need to account for the different demographics their products appeal to.
An effective digital transformation strategy will take into account both changes and disparity in consumer behavior, creating a customer journey that successfully engages with all stakeholders.
Ultimately, digital transformation starts with consumers
Understanding what consumers demand from both insurance products and providers, and their preferred customer journey.
Where a strict online-based customer journey will work for some providers, others will need to call on other tech platforms or incorporate other means of customer relations to make it a success.
Despite these differences, one thing is clear: Both insurance products and insurance providers need to respond effectively to digital change to create competitive advantage and drive long-term growth.