What’s Slowing Down Digital Transformation in Insurance?

This is a great article about the changes taking place in sales within banking, insurance and wealth management. 

To quote this article

"Despite customers’ widespread financial concerns, interest in purchasing insurance isn’t going anywhere. In fact, 21 percent of all consumers are actively searching for new home or auto insurance, and 19 percent are looking to add more life insurance-related products. And of course, insurance claims aren’t going anywhere either."

Yet a recent survey of US insurance policyholders found widespread dissatisfaction with insurers’ insufficiently digital communications and interactions with only 34% able to easily connect with their insurers to ask questions or make modifications to their policy.

And while consumers are eager to communicate with insurers online, insurers aren’t meeting that need, with 50% behind on consumer demand for online ... and 25% behind on consumer demand for website servicing.

Failure to provide customer-centric, digital insurance journeys results in Not in Good Order (NIGO) documents, customer attrition, bloated overhead costs, and prolonged turnaround times—all of which ultimately damage insurers’ bottom line."

So what are insurance companies doing to be "digital"?

"Despite growing customer demand for digital services, insurance companies are lagging behind in their digital transformation. Choppy digital journeys, such as when customers attempt to purchase insurance or file a claim online but are then directed to a different channel, are unfortunately typical.Social Isn't Relevant for us we are Regulated"

I talk to many people in this sector and they say "Social isn't relevant to us because we are regulated".   April Rudin, number one influencer in Wealth Management in a recent Forbes article points out that

"Financial advice is experiencing explosive growth on Reddit, the world’s third-largest social network by active users (trailing only Facebook and Instagram). Its main ‘Personal Finance’ community alone has over fourteen million memberswith thousands actively reading at every hour of the day. In addition, there are at least fifteen regional personal finance communities; the UK community (with over a hundred and seventy thousand members) has even spawned a complementary Wiki site."

The problem therefore for many companies is that the genie is out of the bottle.  You may well be regulated, but your prospects, your clients are on social and as we find out in a bit they are making decision off the back of that. 

Your Not Listening - Social Isn't Relevant for us we are Regulated

April's article then changes gear and talks about what people do when they get that financial information that have gained from social.

"In a recent survey of the state of wealth managementEY that found better-informed clients were less likely to switch providers. The same study also showed an increasing appetite for independent financial advisors, especially in the mass affluent and HNW segments. The study concludes that the way forward for traditional wealth managers is through building trust and demonstrating value through thought leadership and financial coaching.”

April goes on to say

"Back in the summer, I wrote about a Broadbridge survey, which found 77 percent of financial advisors interviewed in the US and Canada reported losing business as a result of not having the right technology to interact with their clients. Those that lost business said they lost a fifth of their book, on average."

Stakeholder Resistance 

To quote this article

"Insurance leaders who wish to bring more innovation into their company frequently encounter resistance from other leaders, middle management, salespeople, independent agents, and back-office employees––the list goes on.  Other leaders may have different priorities, middle managers are often more concerned with the day-to-day, independent agents may worry about learning different technologies at different companies, and back-office employees may be accustomed to legacy systems."

Shifting Buyer Preferences 

We have seen shifting buyer work as everybody is online, in this October (2020) report by Simon Kemp outlines the extent that social media has become part of our lives.  

Related: Four Pressing Challenges CEOs Face Heading Into 2021