A decade from now you won’t recognise the insurance landscape
I’d like to replace the usual “death and taxes” phrase with one of my own. Nothing’s certain but change! If asked to expand on my observation I’d venture: Nothing’s certain but change and the pace of change. Want to test the assertion? All you need to do
When I palmed my first mobile phone I was beaming from ear to ear. I could make and receive phone calls, send text messages up to 160 characters long and choose from ten (yes you heard correctly) ring tones! Nowadays these hand-held devices can function as voice recorders, cameras, radios, televisions, calculators, diaries – the list is endless! And I haven’t even touched on the powerful combination of the mobile phone, Internet and application software. The point I want to make is you can now complete virtually any financial services transaction online – and by extension on your mobile phone. What does technology mean for insurance? Johann van Niekerk, Head of Business Development for RGA South Africa, looked into the proverbial crystal ball to try and answer this “what might be” question. He presented some of his thoughts at the RGA Technical Seminar, held in Johannesburg, 28 October 2010.
Selling insurance will never be the same
Van Niekerk believes the way insurers interact with their consumers will change radically over the next decade. He says viral marketing campaigns are already proving incredibly successful. An example of this success can be found at comparethemeerkat.com. You’re whisked away to an easy to use “meerkat” comparison website – featuring a meerkat with a Russian accent. This strange persona apparently has 750 000 followers on Facebook and thousands on twitter. What’s this got to do with insurance, I hear you ask? Well – the website comparethemarket.com – to which it links – is a genuine short-term insurance aggregator offering up to 400 real-time online quotes!
If you want an example of the wackiest and probably one of the most successful viral marketing initiatives you should pay YouTube a visit and type in the phrase “will it blend?” There are dozens of video clips featuring the Blendtec Blender “blending” a range of everyday objects. “Will it blend? That is the question,” asks a respectable looking bespectacled man dressed in a white lab coat before feeding golf balls, an apple i-phone, a coke can etc into the machine. It’s stupid – but consumers love it. Some of the clips have attracted in excess of nine million views – with total views across the Blendtec clips put at near the 150 million mark. These consumers went out of their way to view an advert on the say-so of their social networking connections.
If South Africa’s direct marketers up their game and move their already successful television marketing efforts to the viral and social networking space, the traditional broker is going to feel the pinch! The “advice” the traditional broker gives is moving into cyberspace too. Companies such as GetLifeRight.co.uk and LifeSearch already offer the “advice” required to facilitate complex life insurance purchases with the human element largely removed. In the future our life insurance purchases could be guided by complex decision trees presented on i-pad or similar portable computing device.
The dying art of hoodwinking the insurer
Technology is changing the way insurers deal with their clients too. Experimental voice stress software has already been deployed at the claim centres of various large insurers. This software flags undue stress in a claimant’s voice as a possible sign the claimant is lying. The insurer can then conduct further investigations with a view to ensure the claim is 100% legitimate. In the future this technology could be moved to the underwriting stage and prevent prospective insurers from lying about cigarette use, alcohol use, occupation etc.
A final observation centres on the changing role of “trust” in the insurance sales space. The traditional view holds that a consumer will only purchase an insurance product (or financial product) from an experienced and trusted professional. The trust relationship typically forms between a financial adviser and his client over time. Not so! Modern trust relationships develop in the most unexpected places. People now trust the information they find on financial aggregators – websites that compare quotes for short-term, life and other financial services across dozens of providers. People have also established trust relationships with their “real world” retailers. In the UK this gives major retail chains such as Tesco the clout to sell insurance products in store. The bond between retail brand and client is so strong Tesco is about to launch its own bank!
Editor’s thoughts: Computers and the Internet mean insurers have access to an infinite amount of data – in real time – and at the click of a button. This could radically change the way underwriting is handled in future. Imagine a computer programme harnessing up to the minute claims and mortality data, providing an instant risk analysis for each new insurance client! Can you envisage a world where every aspect of life and disability cover is handled by computer? Add your comment below, or send it to gareth@fanews.co.za
Comments