Customers in driver’s seat, geared up for experimenting with insurance offerings: webinar

Customers want to be in the driver’s seat and, increasingly, that is something insurance providers should want as well, Ellen Carney, principal analyst for e-business and channel strategy at U.S.-based research and advisory firm Forrester, suggested during a Centre for Study of Insurance Operations (CSIO) webinar Tuesday.

Clearly, “customers are in the driver’s seat now,” Carney told those listening to CSIO’s Trends 2017: Why Brokers Must Unleash their Digital Tools webinar. “They like being in control of their destiny and certainly digital is a mechanism to be able to do that.”

Self-efficacy – coupled with wanting control over how their information is used and the nature of their transactions – is fuelling experimentation that could prove fruitful for insurance providers, at least those prepared and equipped to satisfy their demands.

“Consumers are really willing to experiment, experimenting with devices whether it’s wearables or smart door bells or telematics insurance,” Carney pointed out, suggesting that “consumers are now hyper-adopters of the next new thing.”

She said “we’re seeing that willingness to experiment emerging not just for devices, but also the kinds of coverage that consumers are willing to buy.”

Consumers are using multiple devices to interact with everyone from their insurance companies to their families. With no signs that this will change, the digital and physical worlds will continue to become increasingly integrated, Carney suggested.

“All this technology has not just empowered customers, it’s emboldened them,” she told listeners.

Related: Digital Strategy

And these emboldened customers have created urgency for insurance providers – from carriers to brokers – “to step up and live this age of the customer” by positioning themselves to be able to deliver experiences that are easy, that solve their problems, that they feel good about and that keep them loyal.

It has been estimated there will be 11.6 billion mobile connected devices – including phones, tablets and Internet of Things sensors – in the next three years. As the number of these devices grow, so, too, will the “kinds of data that insurance companies can collect from consumers and use potentially for underwriting,” Carney said.

That being the case, this continuing development “opens up all kinds of interesting opportunities for insurance carriers,” she suggested.

While that door has swung open, it does not mean opportunities could slam shut if customer expectations are not also met. “They’re using their mobile devices to manage their relationships with their bank, with their insurance organizations, and they have high expectations of what those should be,” Carney said of customers.

Truly fostering customer-centricity demands understanding that great customer experiences drive revenue; differentiating with digital; providing insights based on collecting more customer information that can then be employed to build more personalized kinds of coverage; adopting customer-obsessed marketing; and leveraging the investment that an organization has made in technology.

First and foremost, though, insurance providers must be equipped to meet customer demands. Forrester research shows that younger customers want to chat with advisors through the website and, in fact, about 19% of polled respondents aged 25 to 34 are already using direct chat.

“This gives you a sense of the kind of technology experiences that they want to have with all of you at the broker level,” Carney said.

Consumers are now expecting such technology to be available. “These are the kinds of things we need to be able to offer them to keep them loyal,” she told listeners.

Positively, Carney pointed out, “what we see are brokers are now embracing the same technology they were worried 10 years ago would put them out of business.”

Also positive are Forrester findings out of the U.S. in which online Millennials say they trust smaller local firms more than they trust national ones, they trust their agent or broker more than the company the advisor represents, and smartphone users report having more positive impressions of an agent or broker.

For most instances, with the exception of being perceived to be easy to do business with, “there were much more positive impressions about the agent/broker experience among smartphone users than those without,” Carney reported.

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Less positive is the adoption for certain types of technology in the insurance space, she said, citing mobile apps as an example.

Forrester research of Canadian consumers shows a good chunk of the Millennials polled want providers of financial products to offer mobile apps. Asked how many respondents had downloaded apps onto their phones, 69% reported they had done so for their bank compared to just 7% for their insurance company.

“We need to do a better job with promoting the value of our mobile apps,” Carney emphasized to listeners, reminding them to think back to the positive attitude smartphone users have toward brokers or their agents.

“They won’t have those experiences necessarily if they don’t have the tools to help them understand how to manage their policies and stuff like that,” she said.

Her advice for brokers? “Make sure that before that new customer either leaves your office or gets off the phone that they understand the digital tools you have and how to use them.”

Forrester’s most recent annual survey of 253 insurers in Canada and the U.S. found the top five priorities were revenue growth, cutting costs, better compliance with regulations and requests, customer experience, and accelerating digital business.

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As consumers go through the insurance-buying journey and doing their research for what coverage they want, said Carney, they come across carriers and brokers.

“There’s lots of different information they use and consume and a lot of it is digital,” she pointed out.

“So they also depend on tools that we, as insurers, provide to them to help them make sense of that information,” Carney told listeners.