Sometimes words of wisdom come from unlikely places. The Actuaries Summit held in Melbourne, Australia, was one such place. At this event, Geoff Summerhayes, executive board member at APRA, the Australian regulator, gave a speech on changing customer habits and the insurance industry.
His main conclusion was that consumers are changing. While this might seem obvious, it’s how they’re changing that’s important, and that’s a more subtle issue. At InsuredHQ, we looked at Geoff’s comments, which are all supported with data, to see what he had to say on this issue. Here are his three main themes:
Legacy
Insurance is a product, and as such, the insurance market is product-centred. When the market undergoes profound change, or disruption, this leaves insurers and intermediaries at a disadvantage. Geoff thinks the traditional method of fitting the customer to the product looks dated, and this is because it starts with the product, not the consumer. This impedes innovation, which should be driven from the opposite end.
Operational Risk
Legacy in systems and business processes, old fashioned products, and changing consumer habits lead to operational risk. Geoff comments that without innovation, consumers will become ever more disconnected from traditional insurers. This is down to consumer changes – in the digital age, consumers see themselves as individuals, and demand to be treated as such.
Innovation
Geoff stated that as consumer values change, the insurance industry has to adapt or risk reputational damage. As social media is prevalent in consumer choices, any backlash can be catastrophic, as United Airlines found out when they forcibly removed a passenger, and then followed up with appalling public relations handling. While insurance is unlikely to provide such headline material, the risks are still apparent, as can be seen in the steady stream of outstanding NZ earthquake claims from 2011 still making the news today.
New generation consumers value corporate social responsibility, and are willing to invest more in brands that deliver on shared values. In insurance, this means a spotlight on the consumer, not the product, for a more personalised, transparent experience – one that they can trust.
InsuredHQ’s innovative PAS gives the insurance industry the opportunity to run businesses with a truly customer-centric focus with our forward-thinking technology. It allows insurance businesses to join the digital revolution, by providing not only agility and internal effciencies, but also improved customer service and multiple ways of keeping in contact with customers to make their lives easier. Book a demo of our innovative, insurance software technology and no obligation chat with us today. Trust us – it’s worth it!