Push and Pull

For those in the property and casualty insurance industry, be it broker, company or vendor, it is an oft-asked question that, once answered, is simply asked once again: What do customers want?

In Canada’s ever-changing p&c environment – a place where data is king, analytics is queen and customer demand reigns supreme – it is necessary to be prepared to deal with new conditions and to anticipate who the new “customers” will be.

One sure bet for those new customers, as time demands, will be millennials. But the group’s review of industry response to date has been a mix of good and bad.

A new Towers Watson survey – involving 7,136 consumers in the United Kingdom, France, Germany, Italy, Spain, The Netherlands and Turkey – shows price-conscious buyers under 30 are driving a fundamental shift in how insurance is purchased. Technology advances are increasingly distancing the millennial generation of buyers from traditional purchase channels and sources of advice and influence.

Tammy Richardson, U.K. head of insurance management consultancy at Towers Watson, notes the traditional broker role is on the decline as a new generation of buyers drive a rise in direct sales online, achieved by “pulling” information from comparison websites, smartphones and social media and responding to “pushed” communication.

Richardson says the shift may present an opportunity for insurers, if they have the right digital distribution technology to allow consumers to more easily compare and choose financial products tailored to their preferences.

This may sound negative for brokers, but there are positives. One may be that surveyed under-25s are far more risk aware and interested in financial security than previously thought, underlining the need for insurers to find new methods of engaging with these younger buyers.

Although survey results point to insurers, it is a caution (and an opportunity) that can and should also apply to others in the p&c space.

The fact that under-25s are more interested in financial security than previously thought is, ultimately, a positive. True, they may be looking very closely at price, expecting greater flexibility in what devices they use for communicating, and demanding the right digital distribution technology be in place. But they are also looking for protection.

And this is where brokers – who will need to up their games by learning even more about their customers, being available when and by what means their customers want, and using the information they have to better customize

and anticipate wants and needs – can certainly play.

Perhaps, it will not be as big a pool of customers as once was; perhaps it will be.

But as younger customers age, accumulate more and their circumstances change, the need for responsive service, customization and understanding will increase.

There are those who argue a generation as comfortable with technology as any has ever been will, upon acquiring more things to protect, naturally seek out the guidance of a trusted advisor, knowing that not every need can be met, or every risk understood, with a single click.

The future will still include a segment of the market driven by relationships, although, for brokers, these surely will need to transform to continue to inspire the label, “trusted advisor.”

And there may be no better way to forge relationships with millennials – potential clients for decades – than to change with the flow of customer demands while holding firm to broker principles.

For insurers, as for brokers, the survey shows it will be important to have greater transparency in product benefits and effective use of data and analytics to best understand customer behaviour.

What if p&c players are not ready (or willing) to step up to meet the change in how buyers use technology to make financial decisions? They should expect other digital businesses with relevant expertise to do so.

Ultimately, moves that capitalize on technology and the promise of data will be good not only for millennials, but should inspire responsiveness and innovation that are attractive to all.