Insurers, to varying degrees, are beginning to concern themselves more with the total customer experience. In hand with customer experience efforts are big data initiatives.

“I think the big change, what we’re going to see, is just the use of more and more data. Using all of the different data that’s available,” says Catherine Pearson, senior vice president and practice leader with Environics Analytics. “It is no longer about customer data, or about market data and third-party data, it’s all about everything that’s available.”

Pearson’s comments were part of a panel on the changing customer, presented for attendees at the virtual Future of Insurance conference by Reuters Events.

Although the current reality is still that brokers are responsible for a lot of the industry’s business, clients increasingly want a multi-channel experience, necessitating a new, centralized approach to data for some companies.

“We can no longer maintain customer data siloed across different areas of the company if we want to have at least a chance of developing and enabling a multi-channel experience.” - Marcelo Regen

“Every company out there is at a very different stage on their data analytics journey. However I will venture that much of the data collected is mainly related to fulfilling transaction needs – to rate, to underwrite, to settle claims – and it is siloed within each of those functional areas,” says Marcelo Regen, Allstate Insurance Company of Canada’s, vice president of brand innovation and chief customer officer. “We can no longer maintain customer data siloed across different areas of the company if we want to have at least a chance of developing and enabling a multi-channel experience.”

On the cusp of significant change

When they discuss the future, however, there is a sense that insurers are on the cusp of significant change in this respect. Still, Regen says a mindset shift away from product centricity to a focus on the customer is needed.

“I would venture that, to varying degrees, insurance carriers today have their reporting, their systems and even their working groups centered around how we drive profitable growth for our line of business, versus trying to answer the question: how do we optimize the relationship with customers and partners to drive lifetime value?”

Companies would appear to be trying though. Investment in the consumer experience is on the rise, says Christian Bieck, global research leader, insurance, with the IBM Institute for Business Value (IBV).

“When I started my job in the IBV in 2006, we never really talked about customer experience, at least not in insurance. Something like a chief customer experience officer or chief customer officer did not really exist. Now in our survey, 90 per cent of organizations said that they have a chief customer officer or a chief customer experience officer or would be implementing one in the next few years.” (IBM surveyed just under 100 insurance companies and approximately 10,000 consumers in conducting its research.)

“Investment in customer experience has been growing immensely,” he adds, saying that between 2018 and 2022, it is projected that company investment in the consumer experience will increase 36 per cent.

Despite this, he also says that 60 per cent of insurance executives surveyed agreed that a lack of strategic focus, at least to some extent, is a barrier to improving the customer experience with their firms.

What business are you in?

Regen’s advice for those navigating these challenges is to define clearly the business they are in, while resisting the urge to base that definition on what they currently do.

“If we are talking about transforming anything, it is imperative to review and revisit the definition of what business we are in,” he says. “It is important to answer what business you are in based on the purpose you are trying to achieve, not based on what you currently do.” (In insurance, for example, he says companies are not in the business of selling insurance, they’re in the business of prevention and protection.)

“This will point you to the critical capabilities, the competencies that you need to accelerate, the ones that you need to be competent in, and the ones you need to worry about.” More, he adds, this mindset shift will open companies up to exploring adjacent spaces which align with a target customer’s needs, “rather than only aligning to your current operating model or your current systems.”