COMMENT: Get over yourself and get moving

COMMENT: Get over yourself and get moving

Nearly all insurers (91% to be precise) think that their future growth hinges on them providing a “special” customer experience, yet most of them do not currently see themselves as providing differentiated products, especially via wi-fi. That’s the depressing finding of a global survey of 119 insurers around the world by Accenture.

The consultant thinks that insurers should be doing more to partner with companies that know how to connect with consumers’ phones and other PDAs.

The survey reveals that more than three-fourths of respondents (79%) rated themselves as “average” or “among the weakest in the industry” in their ability to provide their customers with multi-channel access to their services, including through mobile devices.

A similar number (70%) rated themselves as “average” or “weak” in their ability to tailor products and services to customers’ needs and almost two-thirds (64%) gave themselves similar ratings in their ability to provide innovative products and services.

Accenture’s survey reported how insurers under-achieve in other areas:
* More than two-thirds (68%) of insurers said they will increase spending on their analytics capabilities over the next three years, up from an average of $21m (per insurer) over the past three years;
* Only half (50%) of the respondents leverage data about customers’ lifestyles (such as hobbies and interests) to analyse their needs and expectations, and just 37% of them leverage usage patterns, such as driving habits and personal needs, to do so;
* Only 16% of insurers use external data such as social media “to a great extent” to supplement customer information available internally;
* The most critical challenge for insurers they believe is to access relevant and up-to-date customer data, mentioned by 95% of respondents.

John Del Santo, global managing director of Accenture's insurance practice, has an interesting take on insurers’ attitude. He said that most of the large amounts of demographic and transactional data that insurers have about their customers are used to answer the question: what happened?.

He reckons the survey reveals that insurers realise that improvement is required and additional investment is needed to enhance their analytics capabilities and better anticipate customers’ needs: “Access to new sources of data, for instance from social media, and improvements in data consistency, allow for much richer insights and help insurers answer questions such as: ‘How will my customer behave, what are his or her interests, and what will happen?’”

The survey found that insurers are gearing up, however. Eighty-one percent of insurers said they will increase their investment in mobile applications over the next three years, up from an average of $9m (per insurer) over the past three years.

Only 15%, on average, currently provide services geared for mobile devices, such as information about products sold, quotations and account management, while more than half (54%) offer these services online. But more than half (58%) of respondents, on average, said they will offer these services through mobile devices in the next three years.

Developing the functional, technical and people skills, as well as addressing customers’ concerns regarding security, are recognised as important hurdles that insurers have to address to develop mobile capabilities. But as people everywhere increasingly use their phone or tablet as a life tool (can you remember when the Filofax was the ultimate personal organiser?) insurers now have little choice but to get up to speed.

Thomas Meyer, Accenture managing director in Europe, says insurers should look beyond what their competitors are doing, and examine the innovations of other leading “ecosystem players” - by which he means banks, mobile operating system vendors and emerging start-ups. “By partnering with other key players, the insurer becomes part of a mobile initiative that gains wide adoption more quickly, offers greater functionality, and opens doors to large numbers of new customers.”

It is a tough call for insurers because as an industry they are easily challenged by IT – in the back office and at POS. But Accenture has a point. If you’re an insurer struggling to differentiate and grow your premium base you need a new pitch. We’ve seen the steps taken by a few motor insurance pioneers in exploiting GPS technology – going wi-fi could mobilise other parts of the business.

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