Why insurance should be more like banking

by Maryvonne Gray 27 Mar 2015

Why insurance should be more like banking

CEO of general insurance for Zurich Insurance Group, Mike Kerner says any move by the company to make insurance offerings more direct is all about pleasing the customer who wants multiple channels available.

He said while there was a trend towards more direct offerings, one had to know one’s customers really well before following that trend.

“Our view, broadly, is the kind of customer we’re going after is looking for some advice, is looking for an intermediary to help them with that advice,” he said during a visit this week to Australia.

“They may want, as well, the great customer service you can get by being able to go to the internet to get some information.

“Being able to pick up the phone and call a call centre and get some information as well, and being able to access the data that they need and the information they need in the complex purchase through multiple channels, I think, is something that the customers we’re looking to go after, they want that capability.

“And that’s where we’re focused on. We’re focused on trying to make sure that a customer has an intermediary who will help them with the process of purchasing insurance, help them with their risk management, help them with claims if they arise, but then, as well, build the capabilities for those customers to come to us on a direct basis, recognising that all the time, we’re going to be having this relationship through an intermediary as well.”

He likened the situation to how the banking sector had evolved.

For instance, cash withdrawals could be done through an ATM rather than a bank teller, to pay a bill you’d need an internet connection to pay a bill through a website but for a mortgage loan you would need to talk to somebody.

“In that context we need to be providing customers with a similar type of experience.

“Easy stuff they can do quickly. More complicated stuff, perhaps an internet connection. And then, if it gets really complicated, they have an adviser – somebody who can help them through the process – and I think customers will really value that kind of multi-touch approach.”

Customers were also at the forefront for the best use of big data, he said, which could already be seen being widely used in the retail and personal lines side.

Kerner said he saw two ways in which big data could provide big opportunities.

“What we see as some of the opportunities to take it to the next level are reaching up into smaller commercial and corporate and middle-sized commercial and then corporate risks as well. So using the same kind of techniques to improve the risk insights and the pricing processes around commercial risk, where perhaps there’s not quite so much data but where you can supplement internal data with external data and generate some insights that help you select risk better.

“It’s something that we’re working on as part of our investments,” he added.

The other way was in other parts of the value chain and processes, such as claims and sales distribution.

“So claims handling I think, for instance, it’s very critical to use early information that you gather on a claim to be able to determine, ‘Is this one likely to get bad or is it something that’s relatively straight-forward?’, ‘Which of my claims adjusters do I want working on this?, ‘How do I want to get external advisers and experts involved?’ so that, as a company, we can really direct the claim to the place where it’s best handled, and it’s best handled in the most efficient way.”

Kerner said Zurich had just rolled out a process where submissions that came in were scored on the likelihood of success so that the company’s internal resources could then be devoted accordingly.

“Right now, without that kind of a model, we spend time on just about everything, and there’s quite a lot of stuff that comes in actually, based on the way we’ve been able to do some predictive analytics on it, we really don’t have a very good chance of binding, and it costs us a lot of energy and a lot of time to do that.

“We shouldn’t really be spending the time on that, we should be focused on the ones where we’ve got a real good opportunity.”

Read the first part here:

International CEO discusses increased exposures, trends