The $50B Australian insurance industry is built on historically successful principles that are now being challenged and often disrupted by the introduction of new technologies. For better or worse Australian insurers and intermediaries are today forced to deal with a very different consumer.
This technology revolution has not only changed the business landscape for companies in the insurance industry, but has also changed, and in some cases completely redefined, the traditional roles of the industry professionals who serve those organisations. Today those employed in the industry have access to opportunities previously unimagined, but also face an equal set of new challenges.
Marketing professionals have gained access to powerful and often cost effective new digital channels, as well as a deeper level of insight into consumer behaviour and expectations using data analysis solutions previously unavailable. Marketing initiatives driven by consumer insights rather than product design delivers better returns and a competitive advantage for digitally enabled businesses.
However, the cultural and organisational change required to attract and retain the talent needed to drive this marketing transformation is a big challenge, especially for the traditional players who have dominated the industry for decades. This skills gap is made more problematic by the high demand on quality resources, and the competition with agencies and companies from other industries.
Insurance sales professionals and advisors today have access to new tools and information sources to help maximise the value of their time with prospects and customers, from online prospecting and professional networking tools such as LinkedIn to lead and opportunity management and CRM solutions like Salesforce. With the right strategy and management, these digital technologies can drive productivity and accountability across a sales operation in ways previously not possible.
However, digital technologies have also created serious competition for the traditional insurance sales model. Product lines like home, contents, motor and travel are today already sold through direct online channels. These are now being joined by other product lines previously sold predominantly by agents and advisors, including small business and life insurance. This added competition has put pressure on premiums and commission levels, making time management and prioritisation of opportunities critical, and in some cases making the involvement of a sales professional altogether unfeasible.
The distribution of insurance products has been revolutionised by the arrival of the internet, and a growing mobile market powered by ecommerce enabled devices will continue this trend. Those working to deliver advantages for their organisations through digital distribution are not short of opportunities to pursue, with customers and intermediaries becoming more and more accustomed to using mobile devices to complete transactions.
Ironically the challenges facing those responsible for designing and implementing digital and mobile distribution channels are often associated with legacy systems and processes. Irrespective of new technologies, insurance transactions usually still depend on integration with existing IT platforms, many of which were developed decades ago. These platforms were simply not designed to accommodate real-time transactions, and often lack the flexibility required to integrate with new distribution solutions. Until these issues are resolved, a process which is typically complex, time consuming and very expensive, distribution teams continue to face challenges with maximising the value of their new opportunities.
In many ways the internet has also revolutionised the insurance customer service model. Mobile apps and web portals can already empower customers to self-service to a point, but so far these solutions typically have considerable restrictions.
It would seem inexcusable not to employ app capabilities as part of a policy renewal process, where up-to-date information need to be obtained or confirmed, or as part of the initial application process, where it is an ideal way to collect information such as visual representation of insured property. Through a mobile integrated CRM platform customer service professionals and customers could potentially collaborate in ways previously unthinkable, however most organisations still fall well short of this vision.
The same mobile capabilities also translate into new opportunities within risk assessment and underwriting. Using a mobile device a customer or agent can collect information about the insured property or business, including images and video content, for immediate assessment by an underwriter. The same solution can also facilitate real-time communication between agent and underwriter during an application or endorsement process, and provide both transparency and accountability between all parties.
The main challenge with this model is interoperability between the existing or preferred systems used by the various parties. Brokers and agents typically work with more than one insurer, and this creates immense challenges for any process automation attempt between product issuer and intermediary. Industry standards such as ACORD are gaining popularity but typically govern data formats and transaction processing, not information exchange and workflows during the assessment and underwriting process.
Product development meanwhile has over time evolved from a process dependent upon underwriters into a new discipline driven by customer insights and big data analytics. For many of the large insurers the design of insurance solutions based on market demand and consumer expectation is a surprisingly new concept, but one that is crucial to generate profits in a saturated and highly competitive market. Fortunately capabilities in this field are today more common in the insurance industry, and digital technologies have made collection of customer data much easier.
While broader market and consumer data can be more difficult and often very expensive to obtain, the biggest challenges facing product development professionals are more likely to be cultural, technical or operational ones. Transforming an organisation from being product-driven to market-driven is never a quick process, and the insurance giants in particular are not known for their agility and progressive nature. Over time this will likely be resolved, however in the near term technical and operational limitations, as well as the ever-present resistance to change, are likely to limit progress.
The challenges and opportunities each of us face will depend on the technical and operational maturity level of our employers. As organisations evolve our challenges and opportunities will evolve alongside them. With new technologies introduced on virtually a daily basis, driving change in consumer behaviour and expectations, at this stage at least there is no apparent end in sight. What can we do except prepare to adapt and evolve ourselves?
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