Adopting an Amazon mindset in insurance
20 Apr 2018
In insurance and financial services there are many new concepts - transforming from clunky systems to slick, transparent, clear, highly regulated comparison engines. But where next? Nick Frankland, Managing Director of Fintech at Legal and General Insurance highlights the key fundamentals that need to be in place so that markets can operate to the same levels as Amazon or Uber.
Customer data is fast becoming more detailed (and arguably accepted) than ever - offering up a cultural shift in how some customers may choose to think when buying products. Instead making their own comparisons, consumers will start to expect things differently and openly ask “This is me, who wants me?”
The implications of this are significant in terms of how companies engineer digital services and especially how they plan digital marketing.
Aggregation and comparison started with home insurance and renter insurance, and now takes in other products and services all the way through to comparing the cost of broadband service in your house, gas prices, and electricity prices.
Companies should be adopting an aggregator mind-set—aggregating not a single capability or service, but the entire customer journey. Showing customers that they are valued – exactly the type of thinking that was originally developed in the TV ad space, promising free gifts for interacting with the advertiser. It is beyond-the-horizon thinking for companies that wish to protect their customer base of the future.
I believe that the industry is moving at such a pace, that if companies don't start to adopt a challenger mindset, they and their customers will end up in the hands of those competitors who may not even supply the product itself, but will aggregate the product better than anyone else in the market. Their primary focus is on making the whole user experience seamless, delightful, and easy.
Market and business leaders need to think like challengers. They have everything to lose, and not a lot too much to gain—whereas the new kids on the block have nothing to lose and everything to gain. The only way to keep customers locked in your circuit is by making sure they see the value that they are getting from you, and making sure that the balance continues to tip in your favour.
This is exactly where ecosystems have a role to play. It’s centered on the idea that a company doesn't have to physically manufacture everything it offers to the consumer. If an ecosystem is beautifully controlled and a joyous experience to use, it doesn't really matter that other people supply it, or what is offered on it.
Let’s say, for example, that I’ve got some information on you, and you have made it clear that you love using our beautiful app. We then launch a new service app offering travel insurance. You, as the new, empowered consumer would expect to be able to skip re-keying in information that we already have on you. Here’s where the API comes in—it’s able to present your data back to you for your travel insurance application. With a few relevant details, my company can make that process easier than you’d expect it to be. Just a few questions, a quick swipe… we know you already, don't we? You’ve been with us a while. And we don't treat you as if you’re a new customer each time you sign on for a new product or service.
This seems so natural that you’d think companies are already doing this. Yet interestingly, nearly all insurance and banking processes have a way to go towards this.
Consumer expectations are attuned to the likes of Amazon and Uber, insurance and banking are going to be held to that standard.
In order to achieve this, there are some ingredients that companies will need to get right. They’ve got to have good data systems and excellent user experience capability. If they don't want their customers to have to retell them who they are each time, companies have got to have good ATI technology to link to services they might also need.
I am hoping our industry is starting to think like that because we need to.
This article has been based on an opinion piece by Nick Frankland for Digital Insurance