Maintaining customer loyalty and business profitability are ongoing challenges for insurers. Many have turned to developing more affordable products. If anything, this has highlighted the opportunities to be capitalised on by meeting customer expectations for a more tailored approach and increasing relevance in their lives by delivering more value beyond insurance products. The future of the industry requires reinventing traditional processes to cater for a more sophisticated consumer base. Insurers can harness the potential that exists in a competitive market by providing customers with platforms that help them introduce value-adds. By doing so, these customers’ lives can be enhanced. Such platforms are possible, now more than ever, thanks to the increased prevalence of relevant data insights.
How the insurance sector responds to the demand and embraces technological innovations to increase relevance in their customers’ daily lives would be an important development to consider.
A case in point can be seen with the Discovery Vitality programme. This combines data analytics with rewards and incentives to guide customers to making healthier choices and benefiting from them. Similarly, Momentum Multiply provides discounts, cash-backs and savings to customers who use its extensive partner network. With these, and other insurers, using a data-driven approach to respond to the market in a way that might not fit the traditional gamut of their responsibilities, they are harnessing opportunities to grow and retain their customer base.
Digitisation and modernisation have permeated every level of the competitive landscape. Society’s growing reliance on digital technologies is not only reshaping customer expectations, but also redefining boundaries across industries. Insurers cannot avoid this phenomenon: as traditional industry borders fall away, the future of insurance stands to be greatly influenced by platforms and ecosystems.
Extensive use of digital technologies in everyday life has become the new normal. Through digital ecosystems, companies are betting big on opportunities that have the potential to realign global markets, thus ushering in an era of ‘sectors without borders’.
Even prior to the global pandemic, some insurers have figured out how to break out of a destructive cycle of commoditisation. In what may look like a paradox, these companies are winning in insurance by offering their customers services beyond insurance. They are helping their customers live safer, healthier and more productive lives by providing them with a constellation of non-insurance services known as an ecosystem – the ‘sectors without borders’ mentioned above.
By offering these ‘new’ services, insurers can increase the frequency of customer interactions. Having more engaged customers will likely lead to more loyal customers for the insurer.
A reimagining of sorts
According to McKinsey, the life insurance industry faces a pivotal, dual opportunity: the chance to fulfil growing customer needs while returning to profitability and growth.
To achieve these goals, they expect winning life insurance companies to outperform in three areas in the decade ahead – personalise every aspect of the customer experience; develop flexible product solutions suitable for a challenging regulatory and interest-rate environment; and reinvent skills and capabilities.
With insurers reinventing themselves, the opportunity to cater for a dynamic, new customer base are clear. Ushering in this new era will see a growth in insurers that are willing to look beyond what they have always been doing and offer customers something different, something that enhances all aspects of their lives.