The Insurance Industry’s Changing Relationship with Consumers

The Insurance Industry’s Changing Relationship with Consumers

This is the 2nd in a 3-part series on the role of the consumer in the insurance industry.

In my last post, I talked about how insurance companies are now applying design thinking to the consumer journey through the insurance application process. This is part of an overall, industry-wide change in its relationship with consumers. 

In the past, advisors might meet with a customer to guide them through an insurance application or a broker would help them select the best auto insurance. But, unless they needed to file a claim, many consumers rarely interacted with their insurance companies beyond the initial policy purchased. 

This change in the consumer relationship is one of the biggest things that InsurTech has brought to the industry. Now, insurers have the ability to interact with their policyholders on a sometimes daily basis! Consumers are becoming more and more open to letting insurers track their data in exchange for premium discounts and other perks. For example, a health insurance customer will wear a FitBit or other fitness tracker that uploads information to their insurer’s app in order to get health-based discounts. On the auto insurance side, customers have embraced safe driving discounts based upon data collected through an app or tracking tech. On the one hand, this puts more responsibility upon insurers in terms of data management and use, but on the other, it helps build customer loyalty in an era when customers can shop online and easily jump ship. 

On top of data-driven discounts, an Accenture survey found that 44% of consumers surveyed indicated that their insurance provider’s personalized advice influences their loyalty and they considered it very important to their overall experience with the insurer.

One of the easiest ways for insurers to achieve this is to partner with an InsurTech because they have tools that can produce customized advice, based upon the previously mentioned tracking data.  

Loyalty has become paramount to the insurance industry and another way to go about securing it is to ensure the user experience is top-notch. Today’s consumers don’t separate the experience of buying a product from the experience of owning it. A streamlined and intuitive application process, or an app that makes applying for or filing a claim easy, contributes to overall consumer satisfaction with your insurance product. We’re seeing more and more insurance companies open to leveraging InsurTechs in order to provide more consumer-centric products to drive this loyalty.

One such example would be how data collected through a robust online life insurance platform has changed how insurers create and sell policies to consumers. Now, product development analyzes data given from the InsurTech platform and works with underwriters to develop policies that respond to customer demand. It’s enabled the creation of usage-based policies, such as auto premiums based upon miles driven, or single-use policies for major events like a wedding. 

No longer are insurers just presenting consumers with policies that the company thinks the consumer needs.

The massive influx of analyzable data empowers companies to identify and sell to real consumer needs, which drives loyalty and feeds into a healthier bottom line. Insurance organizations are shifting to becoming consumer-focused companies and this means their relationships with consumers are changing. In the digital world, people matter more than ever before. 

Stay tuned next week as I’ll explore how to deepen the consumer relationship with the insurance industry.



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