How Can Insurance Products Evolve As Insureds Evolve?
The Insurance industry has kept pace with regulatory changes required of us for years through a steady stream of iterative changes to our products and how we deliver them. Bigger changes to our product offerings have been fewer and farther between, but are often sparked by a particular player doing something to push us all, and eventually, the rest of the market responds.
Today, though, the push to change is primarily coming from a place that feels different to many, but is fast becoming the primary source of new ideas and needs for us to meet.
Two major factors are shifting for insureds which help inform how we as an industry can respond – the experiences they’re increasingly demanding from the digitization of everything else in their lives; and the shift in how they live and work, and what that means for the risks they face.
We have all been inundated by discussion of CX over the past few years, and it’s only increasing. Make no mistake, this is not a buzzword, but something that is extremely real and we need to pay attention to. In all aspects of their lives, our insureds are interacting more digitally, rapidly and on their terms. That redefines what they feel is an acceptable customer experience, and those who don’t meet their expectations not only stand out, but customers won’t be willing to give us a pass any longer.
Today’s customer expects a multi-channel offering where they can interact with you how and when they want without having to restart the interaction every time. If they want to start a quote online and finish with their agent, you need to allow for that. If they want to get a certificate of insurance late at night while responding to a job their company is bidding on, they should be able to get that handled on the spot. And if they’re communicating with you through text, and then want to talk by phone, they should be able to call and pick up the process where they left off in the text messages.
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This is how things are working in their personal and business lives every day, and customers simply won’t tolerate having to by forced into a single channel or process anymore, especially when they see lots of similar examples with other businesses that have figured out how to make things work more flexibly and responsively (like instant, electronic payments; e-signatures; mobile check deposit, etc).
New Risk Characteristics
Just as expectations change, how people live and work is changing. Home and car ownership is being delayed or even foregone by younger insureds, meaning the nature of what they would insure is changing. The assets they own or the exposure they have on assets they rent to others through sharing economy activities may require different coverages or features. We need to seriously listen to and consider the thoughts of these customers around what their shifting habits mean for their needs.
People are renting property more and for longer periods than in the past, and renting the property they do own in ways they didn’t before. Your products must contemplate this and respond accordingly, or someone else will win over your customers as they seek better-fitting insurance.
Similarity, people are working differently. Not so long ago, the idea of your career being a combination of different gig jobs would be unheard of. And while many people were self-employed, the numbers have skyrocketed recently. According the U.S. Census Bureau, the second half of 2020 saw a record number of new businesses started as people displaced from work during the pandemic rethought their careers and took steps to go out on their own.
This shift means a much greater demand for small business insurance perhaps than we’ve ever seen, but also a change in the nature of the work being done and the structure in how that work is done.
We can’t bucket everything into “Miscellaneous” or “All other business” type classes, so we need to watch applications that come in to see what patterns are emerging, and respond quickly or risk missing the shift in the market. Analyzing declines or quotes not taken up can reveal insights about shifting work patterns that can inform new rate classes or the need for different coverages.
And beyond what work people do, how they do it matters. Gig work especially has an “on-off switch” nature to it, and someone may be hitting multiple switches with multiple gig platforms multiple times throughout the day, driving passengers one moment and delivering packages the next. If you only sell a single, annual policy, and it doesn’t factor in the ways people’s work and exposures change in fluid, seamless ways, you can’t expect insureds to stay with you through that disconnect.
The way we serve our insureds and what we serve them with has to change to meet the way their lives and livelihoods are changing.