Technology is a wonderful thing, and the explosion in products in a relatively short space of time has brought us into the world of the ‘connected consumer’. The ability to have answers, information and entertainment instantly at our fingertips has become second nature. But what are the implications from an insurance perspective? The potential here is vast – personalised data from customers, their usage, their individual risks – but is it still all in the distance?
Let’s take three areas for now which insurers need to be aware of:
Owning a smartphone is now the norm and after just nine years since its introduction, 81% of UK adults (rising to 91% of 18-44yr olds) have one. How people use them is interesting in terms of how insurers can interact with customers and provide the best service.
We’ve mentioned Millennials in other articles, but in the coming years this is the group who will have the most purchasing power, so reaching them is critical. Interaction via non-traditional methods is going to be key. 31% of smartphone users make no traditional voice calls in a given week, compared to 25% in 2015 and 4% in 2012. Online live chat, social media and email are all now viable options for having a conversation with a customer.
A natural thought when realising how much people rely on their smartphone is to release an app. This would allow a customer easy access when making a claim, or if they require information about their policy. However, a customer needs more than the possibility of an accident to persuade them to download an app – after all, typical users only download around 20 apps, therefore there has to be something that will persuade a customer that the app will bring a substantial benefit – e.g. using their driving data linked to the app to lower car premiums.
Therefore in many cases, ensuring that your website is user-friendly for phones as well as larger screens, you have a swift response process to emails and have the option for live chat, may in many cases be more essential to get right first.
Two years ago the ‘Internet of Things’ was a new phrase about some distant utopia where your fridge will remind you to pick up milk on your way home from work. Now it’s a reality (not necessarily the talking fridge) though the benefits for insurers are possibly some time away – however, this does not mean it should be ignored – far from it.
The connected home, in terms of entertainment, is well on its way to becoming a standard feature in many households, with smart TVs and games consoles as good examples. However, according to a Deloitte survey, while 28% of people said they had a smart TV, only 2% said they had a smart appliance or lighting; this is the area which insurers would benefit from in terms of the potential data available to use to tailor a product based on that household’s usage. But as can be seen by the relatively explosive growth of smartphones in nine years, when the market is ready, those insurers who are able to start engaging with and incentivising customers, will succeed in realising the potential to be had.
When is that likely to happen? It depends on the consumer. According to PWC, 72% of people say they are unlikely to introduce smart home technology in the next 2-5 years and are unwilling to pay for it. The low uptake so far could be attributed to expense, scepticism and the slow cycle involved in replacing products around the home. But when it starts, as with any technical revolution, it is likely to happen quickly.
Underlying all of this will be trust. As we’ve mentioned in numerous articles, Millennials, and the following “Generation-Z”, will be the ones with the purchasing power. As outlined by Verdict, consumers in a digital world "expect and look for ever-responsive, convenient, tailored services via a channel they can access from wherever they choose." To add to this, many commentators also believe, (particularly for Generation Z), that values are placed high on any agenda – whether socially or from a company they do business with.
All this links to something underlying any business transaction, or use of personal data to build products – trust. Building that trust is important to start now, ready for the future.
The service you deliver is integral to the success of your business. With the right technology, we can help you to heighten your customer experience, improve underwriting performance, and streamline processes.
