According to a recent report, growth in the life insurance market globally has lagged behind the banking and manufacturing sectors and insurers are losing share to industry players not traditionally involved in life insurance. For example, asset management is being done by third party capital providers, marketing is being taken over by search engines like Google and the success of a product is often affected by online reviews. Whereas ‘cumbersome consumer interactions’ did not necessarily hamper success in the past, consumers increasingly require transparency, speed and flexibility.
The disintegrating value chain in the life insurance industry means that life insurers need to compete creatively in the modern market. Simplified products, streamlined costs and ‘delightful customer journeys’ are three ways that insurers can keep pace with market changes. Another opportunity lies in the development of intuitive self-service platforms.
A McKinsey report which tracks the changing nature of the life insurance industry highlights these opportunities and challenges, emphasising the end of the traditional business model. It also suggests genuinely looking to improve customer experiences (by looking at the supply chain end to end and making adjustments where necessary). This fits with the requirement to treat customers fairly.
The report ends with a warning: the innovative process is iterative and since ‘today’s consumers expect frequent updates and new features in nearly every product and service, the insurer’s innovation work is never done.’
A number of similar reports have been published recently regarding the need for both the life and non-life industry to move rapidly into the electronic, consumer-driven world.