Taking major steps towards customer centricity

Insurers and intermediaries have heard a lot about the new world that the insurance industry finds itself in and the client base that is driving it. However, not a lot has been said about how insurers and brokers can actually change their business models to adapt to this change.

A glaring opportunity to take advantage of this new world is for insurers and intermediaries to change their business models. At the recently held African Insurance Forum, Douglas Hoto – CEO First Mutual Holdings – pointed out there are still too many insurers who are stubbornly focused on a product centric approach rather than a customer centric approach. 

Customer satisfaction

Hoto pointed out that while the public finds value in insurance, customer satisfaction levels within the industry are very low in some places. Most of this dissatisfaction is with direct insurance and online purchases, this is encouraging for intermediated insurers and intermediaries alike. 

“A study by Accenture points out that less than a third of insurance customers are satisfied with their current insurer. Further, a report by Propertycasualty360 pointed out that although many customers are purchasing insurance products online, only 15% said that they are satisfied with their digital experience. Finally, almost 75% of customers who attempted to purchase insurance online reported a myriad of problems,” said Hoto. 

Just because customers are dissatisfied with the online experience, does not mean that the digital economy will not grow. 

“The digital economy in sub-Saharan Africa will grow in leaps and bounds and will be driven by mobile technology. In 2016, there were 660 million mobile subscribers in sub-Saharan Africa; by 2022, this will grow to 950 million subscribers. Of this subscriber base, the use of smartphones will grow from 250 million (2016) to an estimated 770 million in 2022. What is perhaps more telling is that accessing the internet through these devises will grow from 26% to 38% by next year. This presents massive opportunities to insurers and intermediaries,” said Hoto. 

A measured approach

Building a customer centric operating model will involve a massive investment in technology and a measured approach whereby insurers and intermediaries will need to fully understand the challenges that customers face. 

“Building a customer centric operating model means that insurers and intermediaries will need to design business processes that reorganise different customer segment needs. Further, insurers will need to focus on delivering a positive and seamless customer experience at every touchpoint across the customer life cycle,” said Hoto. 

He added that this also involves maintaining an active dialogue with customers and acting on feedback. “The final piece to this puzzle is fostering a culture that places the customer at the heart of the decision-making process,” said Hoto. 

Data centricity

Technology plays a massive role in an insurer’s transformation towards customer centricity.

“Data analytics is key to any organisation. Customer retention analysis allows insurers to establish why, where and when they are losing customers. Customer leads analysis is necessary to support the development of a fully integrated distribution model. Finally, behavioural engineering is necessary to unpack the existing risk culture that the company has and its implications. All of these elements are key to the success of an organisation,” said Hoto. 

Data analytics will also assist in the refinement of messages that will suit customer needs. 

“Customers have little time to process adverts. Therefore, it is necessary for an insurer (and intermediaries) to understand user online behaviour. This will allow insurers to generate high quality adverts in a format that is compatible with the users devise and online behaviour,” said Hoto. 

Unrestricted insight

The obvious way to get Big Data is by monitoring client purchasing behaviour. In some cases, there is a lot of it. 

The other way is through social media. Millennials, the client of tomorrow, live their lives on social media which gives insurers and intermediaries an opportunity to listen to the voice of their client in an unrestricted environment. 

“This does come with its own set of challenges such as content irrelevance, spam and ambiguous tone when it comes to messages. However, highly evolved tools that process social media data through text mining algorithms can contextualise and assign sentiments (positive, neutral or negative) to specific conversations,” said Hoto. 

Editor’s Thoughts:
It is hard to fathom that insurers and intermediaries are not already following a customer centric business model. How important is it for insurers and intermediaries to make this shift? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts jonathan@fanews.co.za.