As the millennials and generations after them go through their life cycles, the demand for seamless and intuitive consumer journeys will continue to increase rapidly, and no business will be able to survive if they do not cater for it.
We must embrace innovation and disruption, but the true test of the success will not be in how advanced and impressive the technology is, it will depend on how much it has actually benefited the customer and how “good” the customer outcomes are. For example, advice from health insurers about maintaining mental health is a good example of a valuable and low-tech innovation.
We have a duty to ensure all the fast-moving changes have the public interest at the core of thinking. We must also raise the question of what protections are being put in place to prevent customer detriment and public distrust in insurance.
So there is a unique opportunity to set the standards by which success should be measured and help encourage innovation that leads to the best possible consumer outcomes.
Standards must not be confused with regulations. Standards are in place to complement regulations and form the basis for a progressive, customer-focused ethical approach that is seen as professional and best of breed, rather than an enforced set of minimum requirements.
Innovation will not automatically benefit the customer unless there are clear and defined standards the sector can be held accountable to. We must not limit our understanding of customer benefit to just prices, however. Cutting prices at the expense of bad service would still be very detrimental from a holistic customer experience perspective.
The most important standard is to start with the customer and their needs. The insurance sector and financial sector as a whole has in the past been too product focused. Things have started by creating the product, then wrapping the sales and marketing around it so customers fit the desired demographic. The profession must disrupt this tradition to start with the customer and their needs, then create products that become the solution.
True innovation starts with a desire to understand customers proactively to gain insight into their wants and needs, and then move to finding ways to achieve that.
Innovation should also change the relationship between sector and customer. It is not just about helping people fill out forms at a time and place which is convenient for them, but it allows insurers to help customers manage their risks.
Innovation is changing the role of the insurer so that they utilise their expertise to get a better deal for their customers. Great examples of this are Aviva’s safer driving media campaign, AXA’s resilient home demonstration, Pru’s Vitality scheme, RSA’s Weather the Storm campaign and, of course, there are many more.
The customer benefits by paying less as risks are managed better, and the insurer benefits by fewer claims and creating more loyal customers.
As a professional body, the Chartered Insurance Institute has a responsibility enshrined in our royal charter to “secure and justify the confidence of the public” in insurance. One way we can do this is to make sure anyone employed in the profession, who designs or sells services, or advises on insurance products, has the right expertise to do that competently.
But, importantly, it also means we set up and drive an ethical approach for those professionals to sign up to. Our challenge is to make sure those ethical standards remain relevant and meaningful to customers today and in the future, regardless of the technological advances that shape the look of the products and services customers see.