How does an Insurer, UMA or Broker stand out in a Crowded Marketplace?
Competition in the insurance industry is becoming increasingly more challenging and with the FSB reporting that as of 31 March 2013 there were 10 164 registered Category 1 Financial Service Providers – a figure that just keeps rising – it’s not hard to fathom why. Fast forward to 2014 and 514 further license submissions were added to this total.
Not just an industry that is displaying year on year growth in insurance operators, it’s also reporting consistent growth of gross written premiums (GWP); according to KPMG, in 2013 Short-Term GWP amounted to R 45,2 Billion and this figure increased to R50,2 Billion in 2015. This growth is further compounded by the fact that the entrepreneurial spirit of the country continues to lure new start-ups to the industry, while companies already in the industry are branching out and offering additional products and enhancing their existing lines.
In a bullish market such as this, companies must become more customer-focused, while offering the latest cost-effective products if they are to keep their doors open. It’s no longer just about customer satisfaction and increasingly more about exceeding customer expectations. Pricing is no longer the determinant of success – modern clients are well equipped to compare product offerings and value added services well beyond the scope of mere pricing. Insurers, underwriting agencies and brokers must instead pay special attention to fundamental issues of reputation, marketing, markets, service, and products, to remain competitive in the congested market that is our insurance industry today:
Reputation
Brand reputation is underpinned by the success or failure of a company to deliver on its brand promises. Insurance buys peace of mind for a client: confidence that by safeguarding their assets with cover - they are protected. The trust lies in the belief that the company will deliver on its promise. Brands are not logos – brands are remembered by the experiences they create. Bad experiences are seldom forgotten, and it’s difficult for a company to recover its position when a client has had a negative brand experience that breaks trust. Clearly reputation and trust are interwoven and without a level of trust between the client and organisation, the relationship is on shaky ground. Trust retains and attracts clients.
Standing out
There isn’t room for mediocrity in a market overrun with competition. To stay at the top companies must break away from the pack to stand out from the crowd. This thinking could be applied in any number of ways, including launching a unique offering; communicating with clients differently; and making them feel valued by building personal relationships. Become acquainted with the competition and learn from their shortcomings: “Keep your friends close but your enemies closer”.
Target Market
Given the current state of the economy, well-defined target markets is more important than ever – even small businesses can effectively compete with large companies by targeting a niche market. With a good handle on customer segmentation, companies can tailor their products to the needs of the audience, as well as the advertising and promotional material that will peak and capture their interest.
Products
It’s no longer enough for companies to rely on past achievements to carry their good name forward. Conventional won’t cut it and companies must remain on the lookout for innovative ways to service their customer, while providing them with new products, and enhancing existing lines. New product development is tied to the capability of a business to remain competitive and ensures longevity. Businesses must be able to adapt to market fluctuations to remain relevant. With technology innovations flooding the marketing almost daily, insurance companies must keep abreast of the latest trends and enhance their products to ensure they integrate with these technological advancements.
Service
Customers are not generic and companies need to realise and accept this if they are to deliver exceptional service while remaining cost effective. Managing customer complaints proactively rather than reactively is an excellent way to exceed customer expectations. Regardless of whether this service is delivered online, or face to face, it needs to meet and exceed customer expectations, for it’s often the only contact a customer has with a business. The assumption is that if a company has good customer service, the product must be equally good – even the best available. Clients also want instantaneous service which supports the importance of investing in technology and the industry’s response has been to launch applications that make it easier for clients to submit claims, and for their clients to interact with the businesses across a number of platforms.
The insurance industry always has been, and always will be, a service-driven industry where keeping clients happy is a cornerstone of success. In a pool of business-hungry competitors brands must remain focused on providing clients with the right product and the best service.
