Driving or driven by digital transformation?
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Without digital transformation, the landscape will look very different in 5 to 10 years. The incumbents, with over a century of experience, cannot afford to scrap everything and start afresh.
The mobile explosion, the rise of social, the proliferation of devices and the rise of connectivity are big consumer trends, but how are these relevant to our industry? What do our customers want? We discovered the following:
Stop just thinking about risk management, pricing, actuarial, distribution; think about simplicity and convenience as competitive features.
UK customers of Zurich want to do things themselves, their way. Enable your customers to take control in purchasing, researching, self-service etc. Make empowerment a feature in propositions or relationships.
Creating a consistent product and experience across all channels/devices is very hard to do, but customers want it.
- Speed and agility
This is perhaps the biggest challenge because of legacy and heritage.
A new mind set – stop thinking insurance
Insurance is not dictating the way that customers are expecting to deal with us. Online retail is shaping expectations, as are travel, media and logistics. We can learn from industries that have already been disrupted. In the UK, Zurich launched a number of new initiatives where we are starting with consumers needs and working back to develop a solution. Some examples are:
My Zurich Online Portal where organisations can interact with Zurich, and they can manage their risk on a global scale much more effectively.
- Online trading
Ztrade in the UK allows our brokers in a brokered market to be able to interact with us quickly and receive a price immediately, and then feed into our back end on pricing and policy management.
- Employer-related insurance
Future You – delivering new digital solutions for UK consumers, either directly or through their employers.
Other insurance industry examples
Aviva, a large incumbent organisation in the UK has started to publish their consumer reviews publicly – the good, the bad, and the ugly. This is building trust with their customers.
- Instant cover
CoverHound is a UK app that allows you to take a picture of a car and get coverage by the hour in 60 seconds – convenience, simplicity, and mobility, all in one.
- Completely digital backend
InShared is a Dutch company where claims are completely automated. They are connected to the largest car dealership and repair organisation to offer straight-through fully-digital claims processing.
- Smart homes
Liberty Mutual in partnership with Nest, gives customers a discount on your IOT (Internet of Things) device and a no-claims bonus system. By the way, they're also starting to gather data of what happens in your home!
Advice to insurance companies
Talk to your customers as often as possible - not just in meetings: We are bringing customers in to come and share our offices. Ditch the legacy mind-set! Find out what consumers need, then work out if the legacy fits or not. Because the digital space is different to what we know, it really helps to have the support of the leadership team especially when making difficult choices. Moreover, make sure your digital strategy is completely aligned with your business strategy.
The touch points are very different with a digital business. You need to have digitally enhanced products or services and the key competitive advantage in digital business is to be able to work across functions quickly and in an agile way. The most important themes are no longer safety, cost reduction and efficiency, you need to think about enabling systems with the flex to cope with whatever comes.
Finally, think beyond product sets – you need a whole ecosystem that creates personal value for the end consumer, the broker, the intermediary, or the agent. Insurance consumer contact is usually just once a year for renewals. There's a real opportunity here to intensify contact by delivering added value to people's daily lives: driving apps to help you improve your driving or find a parking spot, or apps to assess your home efficiency: The industry must give its customers more contact points than sending a bill once a year.
About the speaker
Steven Zuanella is Chief Digital Officer UK General Insurance, Zurich Insurance Group. He spoke at the "Insurance Industry Digital Transformation" which took place on 30-31 May 2016 at the Swiss Re Centre for Global Dialogue.