The internet is revolutionising the way in which consumers interact with financial services companies, but many in the insurance sector still haven’t fully taken advantage of these changes, says Andy Roberts, group CEO of the Innovation Group
If you want to be reminded about how digital technology is changing consumer-facing businesses, just think about the last time you booked a holiday, took out a new credit card or loan, looked for a restaurant table or checked house prices in your area. It’s almost certain that at some point you went online.
You did your own research, you compared providers and then you made your purchase. And if you didn’t like the price or the service you received from a company, you might well have expressed your feelings in a forum, with a tweet or on the company’s Facebook page. Your customers are doing the same, of course – and this revolution has only just started.
I believe, though, that there is one sector that is not responding quickly enough to the digital revolution – and that’s insurance. It is the silent giant of business, the last bastion of the old world. Consumer behaviour, meanwhile, has changed far more quickly than that of policy providers opening a gap between the consumers’ expectation and the reality of the service they receive.
Ultimately, the industry is ripe for disruption. With change happening faster than ever, policy providers need to be ready to adapt not just to these new trends, but to continuing changes within the market.
Today’s consumers are “always on”. They discuss, research, analyse and purchase online. They’re digitally dexterous and socially savvy, and they expect their insurer to be too. They expect to develop sincere, long-term relationships across multiple channels, off and online, with their providers. Policy providers, meanwhile, need to be ready to develop and manage these relationships.
Thanks to consumers’ use of social media, and their access to consumer feedback sites and forums, their buying decisions are increasingly influenced by the comments of the many, rather than the few. Yes, of course price is still important, but increasingly experience and service are driving policy sales. Loyalty to a particular provider is fast becoming a thing of the past. In particular, insurers are at risk if they can’t engage effectively with younger people.
According to a report by Deloitte, checking their smartphone is the first thing that more than a fifth of under-25s do each day. More than a third (37 per cent) of smartphone users aged 18 to 24 will visit social networks before anything else and they’ll check their phone more than 50 times a day.
Critically, as they go through the usual life stages, acquiring assets, these younger consumers represent the future for insurance providers. Those who don’t engage with them now will miss out badly in the years to come.
As the industry changes more rapidly than ever, we’re helping our clients to prepare for the future – whatever challenges and opportunities it might bring. For us innovation can be defined as fresh thinking that creates real value. As our business has grown, we now handle more than four million incidents a year, managing 1.5 million car repairs and around half a million property repairs.
Price is still important, but increasingly experience and service are driving policy sales
As markets, customer requirements and technologies change we make sure that we’re in constant dialogue with our clients. We know from these conversations that today’s insurers need to be able to rely on robust but lean and cost-effective processes that offer true operational excellence, and that’s what we’ve been creating over the years for our growing portfolio of customers.
In addition, we offer a state-of-the-art integrated suite of software for the requisite policy processing, claims handling, financials, billing and reporting. These are delivered via advanced social media capabilities with self-serve web portals, automated processes, pre-built content and analytic tools.
They are supplied across multiple devices and channels including smartphone, tablet, website, agent portal and/or via a call centre. This provides tier-two and three insurers a cost-effective means to acquire similar capabilities as the tier-one providers enabling them to compete effectively in today’s always-connected market.
With competition fiercer than ever and greater opportunity to tell the world about their experiences, poor customer service is no longer tolerated by increasingly demanding and fickle consumers. Policyholders expect a quality experience for their premium and they’re not afraid to vote with their feet if they don’t receive it.
These trends are set to accelerate over the coming years. This might be a frightening thought for some in the insurance sector, but these changes also offer opportunities. We get great satisfaction at the Innovation Group from helping forward-thinking, rapidly evolving insurance providers to become “future ready” by offering them consulting, design and delivery of both the technology and business processes they will need to service the customers of the future.
We’re very proud that our managed networks of body shops (of which we have thousands) and suppliers work in partnership with us to provide clients with best-quality workmanship and are able to keep all parties updated on progress through the use of digital technology.
Yes, this period of rapid change is challenging, but the rewards are there for those ready to adapt and make the most of new opportunities as they arise.
ABOUT INNOVATION GROUP
Innovation Group (LSE: TIG) is a global provider of insurance software solutions and business process services. With revenues of £209.8 million and adjusted profit before tax of £27.5 million in 2014, it employs more than 3,000 people across the UK, North America, Europe, Asia-Pacific and South Africa, and works with 15 of the top 20 global insurance markets, 75 per cent of the top 20 global property and casualty insurance companies, and three of the world’s top five fleet and lease management companies.