Insurance 2030: From customer worst to customer first

Putting customers first isn’t just about making them happy. It’s also a sound defensive and offensive business strategy. Its immediate benefits include differentiation against competitors and promoting the buyer loyalty that leads to retention and additional revenue streams. Over the longer term, it can help carriers radically reinvent their business by:

  • Integrating customer engagement, understanding and advice to monitor risks and update coverages in real time.
  • Preventing claims events. 
  • Providing policyholders other products and services, often in partnership with other companies, that meet their lifetime needs.

Fortunately, as other industries have shown, this is all entirely possible. Even though most insurers are just getting started, some are already experimenting with ways to better connect with customers, recognizing they can gain a significant competitive advantage.

Regardless of where you are in the process of reinvention, here are some considerations to help you along the way.

What stakeholders are saying

  • Customers (individual, commercial and employer)
    • “You have my personal data. Why can’t you offer me personalized coverage?”
    • “I expect transactions to be as quick and easy as shopping with an online merchant.”
    • “Policy language is indecipherable. What am I really paying for?”
    • “The claims process can be long and frustrating. Make it better and, more importantly, help me avoid the stress and inconvenience of claims in the first place.”
  • Agents, brokers and alliance partners: “Create a product that customers want and make it easy for me to sell and service.”
  • Product/service partners: “There are many ways we can profitably work with insurers to make customers happier, but carriers typically don’t view us as a strategic partner.”
  • Internal employees: “I don’t have the right insights and tools to serve customers.”

What it takes to become customer-centric 

A customer first approach and its benefits are straightforward, but there’s a lot that underpins them. To make the most of the strategy, you’ll need to develop and integrate:

Customer understanding

At its core, this means understanding what customers want and how they want it. And frankly, most customers would prefer not to buy insurance. They do so only because they’re required to or recognize they have an acute need for it. In fact, most customers aren’t even interested in buying protection from risk or loss. Rather, what they really want is to be financially secure, confident that they can meet their everyday and long-term goals.

Understanding this core desire opens new possibilities for designing solutions and experiences that customers really want. Customer understanding also means using customer data to effectively protect them, prevent losses and inspire financial confidence. This includes collecting and storing data from sensors, wearables and other tools and using it in a real-time feedback loop that informs product design, pricing and customer interactions. Doing this will help you identify the specific types of customers you want and present them with compelling offerings throughout their lives.

Practical examples of a customer-first approach

The capabilities we describe above are complementary. They collectively enable true customer-centricity. In contrast, a disjointed approach inhibits success.

As we’ve shown in our marquee Insurance 2030 report, defining customer personae and their respective buyer journeys is a particularly effective way to visualize how the factors for success can come together in a seamless whole. With that in mind, here are a couple of detailed examples that show how carriers can put theory into practice.

  • Persona: Family
  • Overview: Jim and Brenda are in their early 30s. They’ve just had a baby and are moving out of the city to the suburbs. They put a contract on a house and are looking for homeowners insurance.
  • Shopping preferences: Online self-service, with as few interactions as possible (set it and forget it mentality)
Family insurance customer persona

Contributors

Legal Matters Consul’s Juneen Belknap Kirk, Marie Carr, Susmitha Kakumani and Sarah Berman contributed to this report.

Industry perspective

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What does customer first mean for the insurance industry?

Legal Matters Consul's Juneen Belknap Kirk and The Hartford's Claire Burns discuss what does customer first mean for the insurance industry.

Topic sections:
Click on the video above and drag the bottom bar to the timeline shown below.

00:00-03:53 | What is customer first insurance?
03:53-05:38 | How technology enables a customer first approach?
05:39-07:48 | Customer oriented operating models
07:49-11:41 | Using ecosystems to reach customers
11:42-13:25 | Reinventing insurance to benefit customers

Juneen Belknap Kirk

Principal, LMC Insurance Consulting

Claire Burns

Executive Vice President & Chief Marketing and Communications Officer, The Hartford

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