Though we’ve long been poised for digital disruption in the insurance industry, greater technological capabilities have quickly become a necessity in the wake of the pandemic, emerging markets, developing economies and changing consumer demands — among a host of other events.
The business of insurance is simply no longer as predictable as it once was, so providers must shift their focus from traditional means of selling to new, convenient ways of buying through personalized digital experiences across all touchpoints of the buyer’s journey. After all, it’s what all other commercial brands offer, and consumers expect as much. So why shouldn’t carriers, agencies and brokerages embrace personalization in insurance?
If you’re not able to offer a unique cross-channel experience that allows consumers to gather information and interact with your brand where, when and how they choose, you risk losing their business to not only those within the insurance space, but also to noninsurance brands that have established relationships with consumers. In fact, our research has shown that 83% of Millennial and Gen Z consumers prefer to purchase insurance from providers that seek to serve digital consumers, which does not bode well for carriers that fail to adapt their distribution approaches.
It will take a change in mindset to navigate today’s ever-changing insurance landscape. The key difference between a buying mindset and one focused solely on selling is a shift toward value and convenience rather than price exclusively. No longer is it about finding the best rate for a broad group of people. Instead, you should think about solving your customers’ specific pain points. What this looks like for insurers will vary, but it often comes down to creating valuable connections with people by pivoting the conversation from cost savings to long-term value.
Just think about what it could mean for business if you were to provide an offer of insurance at the moment it matters most. When someone is buying a car, for example, wouldn’t it be in the best interest of both the provider and customer to secure insurance coverage at the time of sale? Wouldn’t the same hold true for renters and home insurance when signing a lease for a new apartment or finalizing a mortgage application? It could also take the form of offering the right product for the customer’s unique needs: building insurance that’s specific to certain vehicles and included in the purchase price or tailoring a product to a distinct consumer group.
With a mindset shift, your business can move away from simply commoditizing insurance toward creating value for customers — whether through the product itself or the convenience of the purchase process. You are there when consumers are most in need of your services.
Only after adopting a new mindset should your attention turn to the technology investments that enable new distribution strategies. Of those investments, application programming interfaces (or APIs) should be a top priority. Insurance API platforms have become increasingly valuable in improving the insurance user experience. For one, they allow your operations to implement enhanced digital capabilities.
They’re also essential to expanding and personalizing your insurance products and service offerings, as well as participating in partner ecosystems. Only through APIs can you include embedded insurance offers in websites, mobile apps, and customer portals owned and operated by trusted partners. Doing so can amplify your distribution opportunities and overall business potential.
To take full advantage of the power of APIs, consider developing your own solution, acquiring another solution, or partnering with a company that specializes in flexible distribution solutions. The last option allows you to test strategies and learn from your mistakes without the need to invest too much time, resources, or capital.
To attract and retain profitable customers, carriers must think holistically about the value they’re adding to their experiences and relationships. For most insurers, that means leveraging the most advantageous channels through the right tools and partnerships to engage customers where they are, when they want, and through whatever means they prefer. But to do so, we must refocus our thinking of insurance as a product that’s not just sold but bought.
Reprinted with permission from the January 3, 2023 edition of the “PROPERTYCASUALTY360”© 2023 ALM Global Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-256-2472 or reprints@alm.com.