The ongoing process of digitalisation presents insurance companies with significant challenges, but also offers numerous commercial opportunities. Against that backdrop, the recent research study “Business Models 4.0 – What insurers can learn from other industries” identifies new ways for insurers to achieve sustainable market positioning. Those insights resulted from analysis of broader developments and their application to the insurance industry.
A key finding of the study was that, in future, insurers must work to integrate their full range of sales channels. That need is driven by increasing numbers of “hybrid” customers, who have become accustomed to consuming via both on- and offline channels. A growing number of customers also expect those services from insurers. They want to be able to switch channels at any time, and during any phase of an interaction with their insurer, and they expect the customer experience to be the same in every channel.
That is why insurers should offer fully integrated communication channels, which customers can use according to their situation and preferences. They should include face-to-face consultations, telephone and online services, as well as mobile apps. Insurers that only operate online should be able to transfer their products and services to the offline world. Possible solutions might include sales partnerships with offline providers. In contrast, insurers with a focus on traditional offline sales must make all important products available to retail customers online. In both cases, the offer process and the various sales channels should work together seamlessly. For example, where required, an online customer making an enquiry could be referred to a regional agent, who would receive the necessary customer information before the consultation.
From a technical perspective, that will involve the consolidation of all system elements. Integrated sales channels require a uniform web interface, based on common data, for the recording, editing and assessment of customer information. Cultural change in insurer’s sales organisations is also required. The various channels have to be coordinated to ensure that they work in tandem. Product prices and compensation should be clearly defined. There are two basic approaches for this, which each have clear advantages. Standard prices across all channels simplify processes and systems. Meanwhile, variable pricing in the various service channels allows a company to react to specific market conditions, which vary from region to region and from channel to channel.
“More and more customers are using the internet to research products before purchasing them from shops. That is why insurers should allow customers to explore their offerings online before concluding a contract during a face-to-face consultation with an agent,” argues Burkhard Herold, Head of Consulting Insurance at adesso AG. “To achieve that, insurers must allow customers to choose between communication channels, and give those customer preferences priority over their own.”
The comprehensive study, “Business Models 4.0 – What insurers can learn from other industries”, is available for download from adesso's website at https://www.adesso.de/en/branchen/versicherungen/studie/studie_1.jsp (registration required).