Can insurers keep pace with consumer expectations?

Refining a customer-first model to thwart carrier hopping

Can insurers keep pace with consumer expectations?


By David Saric

Consumer expectations have drastically changed in the digital age, with carriers needing to create an insurance ecosystem that is personally catered to individual needs.

“You’re in a world where the consumer expects that experience not just to be digitized, they expect it to be intuitive. They expect it to be an experience that drives by itself, where they shouldn’t have to respond to questions that a carrier already knows the answers to,” said Marie Carr (pictured), global growth strategy leader for PwC’s insurance practice.

This is prompting leading insurers to move beyond a simply seamless and automated digital experience.

“The leaders in the insurance industry are trying to understand, anticipate and deliver solutions that meet consumer expectations, not just their needs,” Carr said.

“Now carriers are thinking of creating an ecosystem where they can recreate how consumers are used to interacting with businesses in other parts of their lives and expect it to continue in the insurance world.”

Consumers will also no longer stick with a provider because of cheaper rates if it is not delivering an intuitive insurance experience.

“A carrier should look to architect the customer experience using technology and data analytics to deliver a better price - but deliver that in a faster way through a customer’s preferred communication method,” Carr said.

In an interview with Insurance Business, Carr spoke about why insurance companies need to create technological processes that are less siloed from one another and why building trust and relevance with climate solutions should be on every carrier’s agenda.

Creating interconnected technological solutions

PwC recently released its “Next in insurance: Strategic industry trends in 2024” report, and, in it, the use of technology to support strategy ranks high on the list of changes carriers should be mindful of.

The report noted how most insurers still use a variety of uncoordinated systems to support the business, hindering strategy and operations, compromising the user experience and hurting the bottom line.

This occurs even as more businesses make considerable investments in technology.

“Unfortunately, carriers build their technology by product function, such as a great claims or billing system, and forget to put the customer in the middle to which these programs center around,” Carr said.

Instead, it is more beneficial to explore opportunities that start with customer interaction and not allow the system architecture to dictate how that experience goes.

While this may be easier said than done, Carr noted how it is much cheaper to build an advanced technological framework now than ever before.

“The functionality and efficacy of these systems are much better now than they were — you can get much better solutions for far less money and a lot less time,” she said.

“We used to do like seven-to-10-year strategic roadmaps, but now we do 24-to-36 months. Now if you’re not in market by that timeframe, then there’s something wrong.”

Building relevance and trust with climate solutions

Elsewhere within the report, proactive carriers looking to manage climate risks to property and human health were encouraged to provide practical solutions to close personal and commercial coverage gaps, helping to reach net zero emissions while also growing business.

The report showcased three practical solutions that already exist and should be deployed:

  1. Resiliency services and parametric coverages correlate directly to event magnitude.
  2. Sensors and wearables help both carriers and policyholders collect data in a real-time feedback loop to assess and mitigate risk.
  3. Warranties and coverage enhancements encourage purchase and use of carbon-reducing building materials and components (e.g., solar panels).

Consumers want to be able to rely on insurance companies as a backbone and sense of support, particularly given ongoing environmental destruction.

“I think that insurance companies, especially after the financial crisis, came out ahead of everybody else in terms of institutions that are trusted. And because of certain regulations and other things, they are held to a slightly higher bar,” Carr said.

“But we must perpetuate trust further by beginning to think of products, services and features in a way that a carrier can take the real time feedback to mitigate risk.”

There is also the need for insurers to become more valuable players in the fight to curb climate change through investments and other actions.

“Doing things that are good for the environment can also help build trust, such as reducing a company’s carbon footprint and translating that into the performance or compliance a company has,” Carr said.

“We’re really seeing companies start to contemplate where they need to focus because [climate change] is not going away.”

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