Tag Archives: customer-centricity

In Age of Disruption, What Is Insurance?

“Somehow we have created a monster, and it’s time to turn it on its head for our customers and think about providing some certainty of protection.” – Inga Beale, CEO, Lloyds of London

In an early-morning plenary session at this year’s InsureTech Connect in Las Vegas, Rick Chavez, partner and head of digital strategy acceleration at Oliver Wyman, described the disruption landscape in insurance succinctly: while the first phase of disruption was about digitization, the next phase will be about people. In his words, “digitization has shifted the balance of power to people,” forcing the insurance industry to radically reorient itself away from solving its own problems toward solving the problems of its customer. It’s about time.

For the 6,000-plus attendees at InsureTech Connect 2018, disruption in insurance has long been described in terms of technology. Chavez rightly urged the audience to expand its definition of disruption and instead conceive of disruption not just as a shift in technology but as a “collision of megatrends”–technological, behavioral and societal–that is reordering the world in which we live, work and operate as businesses. In this new world order, businesses and whole industries are being refashioned in ways that look entirely unfamiliar, insurance included.

This kind of disruption requires that insurance undergo far more than modernization, but a true metamorphosis, not simply shedding its skin of bureaucracy, paper applications and legacy systems but being reborn as an entirely new animal, focused on customers and digitally enabled by continuing technological transformation.

In the new age of disruption …

1. Insurance is data

“Soon each one of us will be generating millions of data sets every day – insurance can be the biggest beneficiary of that” – Vishal Gondal, GOQUii

While Amazon disrupted the way we shop, and Netflix disrupted the way we watch movies, at the end of the day (as Andy G. Simpson pointed out in his Insurance Journal recap of the conference) movies are still movies, and the dish soap, vinyl records and dog food we buy maintain their inherent properties, whether we buy them on Amazon or elsewhere. Insurance, not simply as an industry but as a product, on the other hand is being fundamentally altered by big data.

At its core, “insurance is about using statistics to price risk, which is why data, properly collected and used, can transform the core of the product,” said Daniel Schreiber, CEO of Lemonade, during his plenary session on day 2 of the conference. As copious amounts of data about each and every one of us become ever more available, insurance at the product level– at the dish soap/dog food level–is changing.

While the auto insurance industry has been ahead of the curve in its use of IoT-generated data to underwrite auto policies, some of the most exciting change happening today is in life insurance, as life products are being reconceived by a boon of health data generated by FitBits, genetic testing data, epigenetics, health gamification and other fitness apps. In a panel discussion titled “On the Bleeding Edge: At the Intersection of Life & Health,” JJ Carroll of Swiss RE discussed the imperative of figuring out how to integrate new data sources into underwriting and how doing so will lead to a paradigm shift in how life insurance is bought and sold. “Right now, we underwrite at a single point in time and treat everyone equally going forward,” she explained. With new data sources influencing underwriting, life insurance has the potential to become a dynamic product that uses health and behavior data to adjust premiums over time, personalize products and service offerings and expand coverage to traditionally riskier populations.

Vishal Gandal of GOQuii, a “personalized wellness engine” that is partnering with Max Bupa Insurance and Swiss Re to offer health coaching and health-management tools to customers, believes that integrating data like that generated by GOQuii will “open up new risk pools and provide products to people who couldn’t be covered before.” While some express concern that access to more data, especially epigenetic and genetic data, may exclude people from coverage, Carroll remains confident that it is not insurers who will benefit the most from data sharing, but customers themselves.

See also: Is Insurance Really Ripe for Disruption?  

2. Insurance is in the background

“In the future, insurance will buy itself automatically” – Jay Bergman

Some of the most standout sessions of this year’s InsureTech Connect were not from insurance companies at all, but from businesses either partnering with insurance companies or using insurance-related data to educate their customers about or sell insurance to their customers as a means of delivering more value.

Before unveiling a new car insurance portal that allows customers to monitor their car-related records and access a quote with little to no data entry, Credit Karma CEO Ken Lin began his talk with a conversation around how Credit Karma is “more than just free credit scores,” elucidating all of the additional services they have layered on top of their core product to deliver more value to their customers. Beyond simply announcing a product launch, Lin’s talk was gospel to insurance carriers, demonstrating how a company with a fairly basic core offering (free credit scores) can build a service layer on top to deepen engagement with customers. It’s a concept that touches on what was surely one of the most profound themes of the conference–that, like free credit scores, insurance only need be a small piece of a company’s larger offering. This may mean embedding insurance into the purchase of other products or services (i.e., how travel insurance is often sold) or it may mean doing what Credit Karma has done and layering on a service offering to deepen engagement with customers and make products stickier.

Assaf Wand, CEO of the home insurance company Hippo, spoke to both of these models in his discussion with David Weschler of Comcast about how their two companies are partnering to make insurance smarter and smart homes safer. When asked about what the future of insurance looks like, Wand put it plainly when he said: “Home insurance won’t be sold as insurance. It will be an embedded feature of the smart home.” Jillian Slyfield, who heads the digital economy practice at Aon, a company that is already partnering with companies like Uber and Clutch to insure the next generation of drivers, agrees: “We are embedding insurance into these products today.”

Until this vision is fully realized, companies like Hippo are doing their part to make their insurance products fade into the background as the companies offer additional services for homeowners, “Can I bring you value that you really care about?” Wand asked, “Wintering your home, raking leaves, these are the kinds of things that matter to homeowners.”

3. Insurance is first and foremost a customer experience

“The insurance industry has to redefine our processes… go in reverse, starting with the customer and re-streamlining our processes around them” – Koichi Nagasaki, Sompo

To many outside the insurance industry, the idea of good customer experience may seem unremarkable, but for an industry that has for so long been enamored by the ever-increasing complexity of its own products, redefining processes around customers is like learning a foreign language as a middle-aged adult. It’s hard, and it takes a long time, and a lot of people aren’t up to the task.

The insurance industry has been talking about the need for customer-centricity for a while now, but many companies continue to drag their feet. But customer-centricity is and remains more than a differentiator. It’s now table stakes. How this plays out for the industry will look different for different companies. Some will turn to partnerships with insurtechs and other startups to embed their products into what are already customer-centric experiences and companies. Chavez of Oliver Wyman would rather see the industry “disrupt itself,” as he believes it’s critical that companies maintain the customer relationship. In his plenary sessions, he cited the German energy company Enercity as a company that disrupted itself. Operating in a similarly regulated industry, rather than becoming just a supplier of energy, the company invested heavily in its own digital strategy to become a thought leader in the energy space, to be a trusted adviser to its customer and to deliver an exceptional digital experience that, among other things, leverages blockchain technology to accept bitcoin payments from customers. For Chavez, insurtech is already a bubble, and, “If you want to succeed and thrive in a bubble, make yourself indispensable.” The only way to do this, he believes, is to maintain ownership over the customer experience, because, in today’s digital economy, the customer experience is the product.

But to own the customer experience and succeed will require insurance companies to completely reorient their business practices and processes – to start with the customer and the experience and work backward toward capabilities. In the words of Han Wang of Paladin Cyber, who spoke on a panel about moving from selling products to selling services, “It’s always a questions of what does the customer want? How do they define the problem? And what is the solution?”

4. Insurance is trust

“The world runs on trust. When we live in a society where we have lots of trust, everyone benefits. When this trust goes away, everyone loses.” – Dan Ariely, Lemonade

During a faceoff between incumbents and insurtechs during one conference session, Dylan Bourguignon, CEO of so-sure cinched the debate with a single comment, calling out large insurance carriers: “You want to engage with customers, yet you don’t have their trust. And it’s not like you haven’t had time to earn it.” This, Bourguignon believes, is ultimately why insurtechs will beat the incumbents.

Indeed, the insurtech Lemonade spent a fair amount of stage time preaching the gospel of trust. Dan Ariely, behavioral economist and chief behavior officer at Lemonade, delivered a plenary session entirely devoted to the topic of trust. He spoke about trust from a behavioral standpoint, explaining how trust creates equilibrium in society and how, when trust is violated, the equilibrium is thrown off. Case in point: insurance.

Insurance, he explained, has violated consumer trust and has thrown off the equilibrium–the industry doesn’t trust consumers, and consumers don’t trust the industry, a vulnerability that has left the insurance industry open to the kind of disruption a company like Lemonade poses. As an industry, insurance has incentives not to do the thing it has promised to do, which is to pay out your claims. And while trust is scarcely more important in any industry as it is in insurance, save in an industry like healthcare, the insurance industry is notoriously plagued by two-way distrust.

What makes Lemonade stand out is that it has devised a system that removes the conflict of interest germane to most insurance companies – as a company, it has no incentives to not pay out customer claims. In theory, profits are entirely derived by taking a percentage of the premium; anything left over that does not go to pay out a claim is then donated to charity. The result: If customers are cheating, they aren’t cheating a company, they are cheating a charity. Ariely described several instances where customer even tried to return their claims payments after finding misplaced items they thought had been stolen. “How often does this happen in your companies?” he asked the audience. Silence.

And it’s not just new business models that will remedy the trust issues plaguing insurance. It’s new technology, too. In a panel titled “Blockchain: Building Trust in Insurance,” executives from IBM, Salesforce, Marsh and AAIS discussed how blockchain technology has the capacity to deepen trust across the industry, among customers, carriers, solutions providers and underwriters by providing what Jeff To of Salesforce calls an “immutable source of truth that is trusted among all parties.” Being able to easily access and trust data will have a trickle down effect that will affect everyone, including customers, employees and the larger business as a whole–reducing inefficiencies, increasing application and quote-to-bind speed, eliminating all the hours and money that go into data reconciliation and ultimately making it easier for carriers to deliver a quality customer experience to their customers.

See also: Disruption of Rate-Modeling Process  

While the progress in blockchain has been incremental, the conference panel demoed some promising use cases in which blockchain is already delivering results for customers, one example being acquiring proof of insurance for small businesses or contractors through Marsh’s platform. With blockchain, a process that used to span several days has been reduced to less than a minute. Experiences like these–simple, seamless and instantaneous – are laying the groundwork for carriers to begin the long road to earning back customer trust. Blockchain will likely play an integral role this process.

5. Insurance is a social good

“We need insurance. It is one of the most important products for financial security.” – Dan Ariely, Lemonade

For all of the the naysaying regarding state of the industry that took place at InsureTech Connect, there were plenty of opportunities for the industry to remind itself that it’s not all bad, and its core insurance is something that is incredibly important to the stability of people across the globe. Lemonade’s Schreiber called it a social good, while Ariely told his audience, “We need insurance. It is one of the most important products for financial security.” Similar sentiments were expressed across stages throughout the conference.

In fact, in today’s society, income disparity is at one of the highest points in recent history, stagnating wages are plaguing and diminishing the middle class, more people in the U.S. are living in poverty now than at any point since the Great Depression, the social safety net is shrinking by the minute and more than 40% of Americans don’t have enough money in savings to cover a $400 emergency, so insurance is more important than ever.

For Inga Beale, CEO of Lloyds of London, insurance has a critical role to play in society, “It goes beyond insurance–it’s about giving people money and financial independence,” she said during a fireside chat. She went on to describe findings from recent research conducted by Lloyds, which determined that, by the end of their lives, men in the U.K. are six times better off financially than women. When designed as a tool to provide financial independence and equality for everyone, insurance can play an important role in addressing this disparity. While this has been a focus in emerging markets, financial stability and independence is often assumed in more developed markets, like the U.S. and Europe. In reality, it is a problem facing all markets, and increasingly so. Ace Callwood, CEO of Painless1099, a bank account for freelancers that helps them save money for taxes, agrees that insurance has an important role to play. “It’s our job to get people to a place where they can afford to buy the products we are trying to sell,” he said.

You can find the article originally published here.

Global Trend Map No. 8: Marketing

At the end of our previous post on the Internet of Things, we pointed to the importance of customercentricity for the success of today’s insurance products. This is because the disruption to which incumbents are responding is customerdriven. The extent to which insurers survive – and thrive – will depend on how well they can keep up with the everevolving needs of today’s consumers, needs that are increasingly being set outside of insurance, especially by retail and consumer electronics.

In this installment, we approach the topic of marketing and customercentricity at insurance carriers by looking at two principal measures: customer performance and customer priority. We finish with a look at customer loyalty, and how distribution affects the customer relationship.

  • Customer performance: how well insurers believe they are meeting customer requirements; key measures are customercentricity, 21stcentury customer expectations and customer engagement
  • Customer priority: the relative emphasis insurers are placing on the customer, in terms of money, time, staff and training resources

The following stats are based on the survey at the heart of our Global Trend Map; a breakdown of all respondents, and details of our methodology, are included in the full Trend Map, which you can download for free at any time.

“Listening to the ‘voice of our customer’ is traditionally not a strength of insurance companies. It’s almost as if customers are speaking a foreign language. Increasing competition and transparency together with changing expectations, especially of a younger generation, will force us to learn our customers’ language quickly.” – Monika Schulze, global head of marketing at Zurich Insurance

In our earlier post on insurer priorities (Insurance Trend Map #3: Insurer Priorities), we saw customer-centricity identified as a major priority by carriers worldwide. However, despite this high priority, the general trend among carriers is of dissatisfaction with current customer performance, as we will now explore.

Measures of customer priority and measures of customer performance therefore stand in stark contrast to each another, and there is in fact nothing surprising in this; if carriers were already meeting their customercentricity aims, then they certainly wouldn’t be focusing on it as such a problem.

Some Measures of Customer Performance

Exhibit A: Only 45% of insurers and reinsurers believe their organizations are truly customer-centric …

While the above stat is an indictment of present levels of performance at carriers, it does indicate a strong will to change. It is better to admit that you have a problem than to falsely believe your customer relationship will take care of itself!

See also: Why Customer Experience Is Key  

Different insurance lines produce similar scores on this measure, except for life, which lags somewhat. The reason for this may well be the historic lack of touch points in life insurance, something we touch on again in our forthcoming feature on claims.

Exhibit B: As we see in the infographic below, only 20% of insurers and reinsurers believe they are meeting today’s high customer expectations.

We note that this proportion (20%) is lower than the 45% claiming to be customercentric; this implies that, while a customercentric approach is necessary for strong performance, it is by no means sufficient, and that there are plenty of customercentric carriers that are nonetheless falling short of expectations.

Exhibit C: 70% of insurers and reinsurers are unhappy with their level of customer engagement.

Insurance has, rightly or wrongly, always been an industry with infrequent customer touchpoints. However, in today’s alwayson world, the possibilities for customer engagement are boundless.

A Note on Customer Priority

We cannot discern any conclusive regional trends across our measures of customer performance. However, we can say tentatively that Europe and Asia-Pacific lead North America as far as customer priority is concerned (though all regions are naturally giving high priority to customer-centricity). This regional lead is based on interviews with local industry representatives, which we present later in our regional profiles (read ahead here), as well as on the below stats from our earlier posts:

At the beginning of this post, we pointed out that customer performance and customer priority stand in an inverse relationship to each other, and we hypothesized that prioritization of the customer is driven by poor performance. If European and APAC carriers are indeed trying harder – albeit only marginally – to raise their customer game than their North American counterparts, then we might conclude that, for whatever reason, the customer relationship in the former two regions is more problematic than in the latter. And what underlies this is, we believe, the nature of insurance distribution.

Customer Disruption = Distribution Disruption

Insurers worldwide are chasing consumers via new channels and with new products, and the fundamental reason they are having to do this is that emerging (digital) channels have given incumbents and newcomers alike access to their traditional client base. This customer access is the fundamental enabler of disruption: What was once a relatively captive market is now in flux.

“The consumer is used to a really personal experience now, and that is exactly the same as when they’re buying a pair of shoes online. They’re used to being able to get something if they want it, where they want it and at the cost they want, including complete information like the exact half hour it’s going to turn up in their house and what color it is.” – Charlotte Halkett, former general manager of communications at Insure the Box

The less stable traditional distribution channels are, the more (unwanted) competition insurers must deal with and the harder they must fight to boost customer performance; at the end of the day, poor performance is really only poor performance relative to one’s competition.

Off the back of this, we predict that channel disruption will be marginally greater in Europe and Asia-Pacific – which are prioritizing the customer most forcefully – with traditional models remaining relatively more intact in North America.

“The insurance business hasn’t changed significantly over the last 100 years – however, in the last 10 years, the digitization of sales and servicing has led to a significant shift toward customer-centricity. There are new and dynamic ways to sell, new market entrants and advanced ways to service customers who provide instant feedback.” – Ash Shah, regional CIO and chief of staff, property and casualty at AXA Asia

While we have tentatively grouped Europe and AsiaPacific together with respect to their “problematic” customer relationship, which in any case we explore further in our next post (on distribution), we should point out one very obvious respect in which this relationship varies greatly between them.

Europe is, like North America, a developed, relatively saturated market, where the retention and optimum conversion of existing customers is vital not just for growth but for survival. In AsiaPacific, on the other hand, carriers are not just concerned about keeping existing customers but also accessing, for the first time, millions of consumers new to insurance.

Considering this, it is still better on balance to group Europe and North America together, and their shared focus on existing customers is borne out in our stats on loyalty. Loyalty is certainly of high importance around the globe, as we see from our chart below, but we can reveal that North America and Europe lead AsiaPacific on this measure.

In AsiaPacific, loyalty and retention are certainly not unimportant; but, with lots of market share up for grabs (in particular from tapping the enormously populous emergingmarket segments), too much focus on loyalty may result, down the line, in insurers finishing with a smaller slice of the pie.

“In an age of intense competition and high customer expectations, insurance carriers, brokers and agents have a significant battle ahead for the hearts, minds and wallets of customers.” – Mariana Dumont, head of new projects at Insurance Nexus

See also: Roadblocks to Good Customer Relations  

In our next installment, on distribution, we look at emerging digital, affiliate and aggregator channels, and assess carriers’ efforts to provide a consistent customer experience across these channels. We will also be considering the variant distribution landscapes in different major markets around the world, as well as the impacts that this has on carriercustomer relationships. Feel free to skip further ahead as well, by downloading the full Trend Map (it’s 100% free!).

 

Global Trend Map No. 3: Priorities

In our last post, Insurance Nexus Global Trend Map #2: Insurtech Perspectives, we looked at carrier sentiment toward disruption both globally and in a range of local markets (Europe, North America and Asia-Pacific). We found significant, though not overwhelming, impacts reported from new market entrants, while at the same time acknowledging that psychology may play a substantial role in carriers’ self-assessments.

In this context, it will be interesting to see what sorts of priorities insurers are setting – whether their money is where their mouth is, so to speak. As part of our extensive Trend Map survey, we drew up a short list of 15 priority areas and asked our carrier respondents to rank them from a money, time, staff and training perspective (results below, both globally and segmented on three key regions). You can find a breakdown of our 1,000-plus survey respondents, details of our methodology and bios of our contributors by downloading the full Trend Map here.

We allocated ranking points separately for money, time, staff and training (15 points for first, 14 points for second… one point for last). We then combined our four measures into one composite priority score’(meaning a top score of 60, representing four top ranks, and a bottom score of four, representing four bottom ranks).

See also: 2017 Priorities for Innovation, Automation  

Digital innovation tops the list internationally as well as in North America, Asia-Pacific and Europe. This result (digital innovation as respondents’ key priority, with customer-centricity not far behind) complements what we saw in our earlier post on industry challenges, where technological advancement and changing customer expectations’ were perceived as the key external challenges in the industry. Digital innovation and customer-centricity also represent much of the ground fought on by insurtech – and upon which incumbents must fight, too. Investment management is the lowest-ranked priority across the board, most likely a reflection of enduring low interest rates.

“The highest single priority for insurers – Digital Innovation – is a direct reflection that this is the widest capability gap between insurers’ expertise and what are now marketing ‘table stakes’. Time is not on the side of those who fail to close this gap.” –Stephen Applebaum, Managing Partner at Insurance Solutions Group

Looking at specific technologies attracting buzz, Analytics emerges as top-three priority across the board, while Internet of Things (IoT) struggles to break into the top ten. This is not to deny the importance of IoT for the industry over the years to come, but it does suggest that there are more immediate gains to be realised on the analytics side; ultimately, these two technology areas complement each other perfectly. We further explore Analytics (including Artificial Intelligence!) and IoT in our Key Themes section, which you can access straight away by downloading the full Trend Map here.

While Blockchain did not feature in this year’s shortlist of insurer priorities, we do still cover it among our Key Themes, in our sub-section on Fraud.

To deepen our comparison of the different regions in the table above (North America, Asia-Pacific and Europe), we also created a ‘medals table’ drawing attention to the differing levels of emphasis placed on our 15 priorities from one region to the next. For instance, Asia-Pacific achieved the highest priority score (60) for Digital Innovation and has therefore been credited with the Digital Innovation Medal on the medals table below …

Some key takeaways from our regional comparison…
  1. Analytics, Customer Centricity and Digital Innovation achieve similar scores across all our regions; Customer Centricity trails marginally in North America.
  2. Noteworthy is the perfect score of 60 attained for Digital Innovation in Asia-Pacific, which indicates that this was the number-one priority here in all four measures underlying the priority score (money, time, staffing and training).
  3. Underwriting and Risk Management both score considerably higher in North America than they do elsewhere – as we saw in the first table, Underwriting is 3rd in the list of priorities in North America, despite not getting above 7th place in any other regions.
  4. There is a step-up in focus on Claims in Europe and North America compared to Asia-Pacific.
  5. With Distribution, we have the exact inverse scenario, with Asia-Pacific leading the pack, possibly a reflection of the emerging markets within it necessitating high-scale low-cost distribution, which traditional models cannot provide.
  6. Fraud is also a marginally higher priority in Asia-Pacific.
  7. Europe and Asia-Pacific lead North America with their focus on Internet of Things.
  8. Cybersecurity and Mobile achieve similar (lowish) scores for all regions; Product Development is relatively high across the board.
  9. Regulation is the biggest deal in Europe, where respondents quoted in particular Solvency II and the Insurance Distribution Directive (IDD) as being causes for concern.

“Even though different markets seem to focus on a variety of distinct priorities, it’s clear many insurers place the customer at the heart of their strategies, whether through analytics, digital processes, mobile-first platforms or enhanced distribution capabilities. In each situation, technology is at the core of such digital innovation. Culture and mind-set may be the two elements that slow success.” – Sabine VanderLinden, Managing Director at Startupbootcamp

Find out more about how our key priority areas vary by geography in our Regional Profiles, by downloading the full Trend Map here.

Additional Insurer Priorities

Survey respondents had the opportunity to provide any additional priorities they felt we had missed. Stand-out entries included:

  • Upgrading legacy systems
  • Business transformation
  • Robotics
  • Marketing strategy
  • Blockchain

See also: Why Insurers Need to Transform  

Certainly the top three of these we could categorize as staples of any digital transformation initiative. In our next post, Insurance Nexus Global Trend Map #4: Services, Investments & Job Roles, we take our exploration of insurer priorities one step further. And if you’d like to skip further ahead, you can download the full Trend Map free of charge whenever you like…

Download your complimentary copy of the full Trend Map here.

Insurtech: The Approaching Storm

Customer-centricity and mobile engagement: the next wave of innovation to disrupt the insurance industry?  

The individual customer has to be at the center of the marketing strategy of every company that wants to succeed. A customer-centric marketing approach starts with the realization that there is no “average” customer. Customers have different behaviors and preferences — and this presents rich opportunities to move past a “one-size-fits-all” marketing approach. Customer-centric marketing teams think of their customer base as their greatest long-term investment.

A customer-centric approach means targeting the right customer through the right channel and sending the right message — at the right time. It also helps teams align around a strategy that will drive long-term value to the business, acquiring high-value customers and keeping them coming back.

The consumption habits have deeply changed in a competitive environment where the customers face information overload.

The smartphone has become the primary reference when searching for information, comparing products, finding the best deals and connecting with a brand/organization. The smartphone has become the first screen, the reference for our daily activities.

“Mobile is the future.” With these very words in 2010, Eric Schmidt, the then-CEO of Google and now chairman of Alphabet, gave us a glimpse of what was going to happen. And he hit the target!

As citizens and customers, we live surrounded by dozens of different devices, and the screen of the smartphone has become the main reference for all our activities. Mobile is not just another channel, it is a proxy of the customer — an entirely new lifestyle.

The awareness that the rhythm of our existence is marked by the mobile revolution is certified by three common stats:

15: The minutes between when we wake up and when we turn on our smartphones.

150: How many times we check, on average, our smartphones during the day.

177: The minutes we spend, on average, every day looking at the screen of our mobile devices.

Customers today do not go online. They live online.

Better yet, they experience an endless sequence of moments — in a nonlinear balance between the online and offline worlds.

See also: Top 10 Insurtech Trends for 2017  

Your customers are ready to buy. They are ready to buy from you. They are just asking for one simple thing: that they can receive relevant information on their smartphone when it is the right time.

According to Google research on “micro-moments” that offer memorable experiences to customers, a retail brand must develop and cultivate three qualities:

Be There: The ability to show up when and where the customer has a need or desire.

Be Useful: The ability to be there with relevant content and to become a primary reference.

Be Quick: The ability to think and act fast. Speed is essential across all stages of the customer journey.

At the core, the brand-new customer is driven by technology.

The super-shoppers are tech-savvy, and you cannot even remotely think to engage and monetize them as you did with the clients in past decades. If you do not speak the new shoppers’ language, you will never capture their attention, and, ultimately, you will lose all relevance.

What does it mean to be relevant in the mobile age? Easy. Rethink the marketing strategy, how to connect with customers (online and in-store) and how to convey contents and values.

In a few words, you must use technology to establish your brand as a trustworthy source of information and inspiration. And you must do it not once and for all, but improving day after day after day.

Study and understand the super-shopper; be present in the micro moments that matter; stay relevant; and be epic. Only then you will conquer shoppers’ hearts and minds.

Shopping in the era of micro moments often starts when people have a need or desire to purchase a product. Once they feel this need, they start looking for ideas, a search that will lead them to online communities, social networks, video tutorials and company blogs. Only then will they evaluate the different options and eventually decide what (and where) to buy.

In these moments, you have to be there and be useful to win trust and loyalty.

“Be there” means you must identify the most important micro moments and commit to being there, whenever and wherever a shopper is searching, especially on mobile.

“Be useful” means you must provide valuable contents when your customers need them, on any channel — social media, point of sale, advertising, blog, social commerce, etc.

“Be quick” means you must provide the required and valuable information at the right time and in the right manner.

Has the moment come for an old-style industry like insurance to turn the page? Several experts, managers, entrepreneurs and investors engaged in the insurance space consider that 2017 will be the year of insurtech. Some strongly believe that every successful insurance company will be insurtech soon!

An intelligent use of the technology in this industry can generate opportunities to close the protection gap, reduce the anti-selection issue, optimize loss ratio with personalized proposals and reduce overall processing cost. All this in a customer-centric approach.

The Internet of Things and artificial intelligence are undoubtedly two main drivers of the evolution in the industry, and we have seen several interesting applications already on the market. A lot of insurtech startups are investing all around the world in these technologies, which enable insurance carriers to propose innovative and customized coverage to their customers while  “blue ocean” opportunities are appearing.

See also: 10 Predictions for Insurtech in 2017  

Traditionally, the insurance industry business model is focused on:

  • Identifying the pool of customers that might have risks assessed;
  • Targeting those customers and assessing the risk for each class;
  • Selling differently priced policies and spreading the risks over the pool of customers; and
  • Trying to retain those customers as long as possible, offering lower price for longer contracts.

This approach is, by definition, based on the concept of “standardization” — the opposite of “customized” from a marketing point of view — and, even if it was one of the golden rules of the insurance business for several decades, it has become obsolete nowadays.

The insurance industry has always been data-rich, but, traditionally , it is quite unstructured, or, at least, the models used are quite old and simple.

Being connected has become the talk of the town, and insurance companies are one of the main interested parties in this discussion — some of them even being actual promoters of change and innovation.

Consumers are becoming more and more connected, whether it is at home, at work, behind the wheel, when they engage in sports or leisure activities and so on.

The surrounding environment is becoming smart and is being incorporated in the connected ecosystem, thus creating opportunities for insurance companies — opportunities that must be managed appropriately to maximize value. Here, big data analytics play a huge role, as the quantity of collected data and variables is getting higher and higher.

The IoT real-time data collection and sharing power will create significant opportunities in finer product segmentation and more specialized pools of risk and predictive modeling to better assess risk, as well as improving loss control and accelerating premium growth.

The IoT is the network or system of related computing devices and sensors, and it can communicate with other devices on the network. These objects, or “things,” are capable of transmitting data.

In the end, for insurance carriers to harness the power of the IoT, each will have to first think creatively about what data to gather and how to use it.

A system based on IoT and big data analytics can identify patterns and provide optimized solutions based on real-time input. Up-front: A seamless user-friendly interface can transform the way companies communicate with policy holders.

The IoT’s impact within insurance is coming fully into focus. At the highest level, better use of IoT and sensor data means insurers have the opportunity to:

  • Establish direct, unmediated customer relationships;
  • Gain more granular and precise understanding of who their customers are and how their needs change over time; and
  • Individualize offerings of products and features.

Within IoT applications, artificial intelligence is also helping (or disrupting, depending on how you see the matter) the sector in different ways.

The abundance of data can be used to refine customer segmentation and provide personalized offers based on personal features.

Artificial intelligence offers predictive recommendations that are backed by complex algorithms and data and have the ability to analyze process flows for bottlenecks, improving overall company and customer satisfaction. Algorithms compare answers and information provided by customers to make appropriate recommendations for each risk scenario.

The algorithms are constantly at work to better understand humans and their thought processes through machine learning, which allows AI to analyze human behavior and provide predictive consulting based on each individual’s wants and needs.

So, AI can help increase customer engagement and retention with personalized offers delivered at the right time, in the right way, at the right price.