Climate change

While Republicans and Democrats debate about whether global warming is a problem, there’s no disputing that the climate is changing — and that includes the insurance climate, too. It’s probably no secret to you that consumers are scrutinizing their relationships with their insurer representatives more carefully and have higher expectations of insurers.

A recent study commissioned by IBMconfirms those sentiments. In its survey of more than 3,000 property/casualty insurance policyholders, IBM found as expected that “younger, newer policyholders tend to be Internet savvy and expect instantaneous interactions and tailored selections.”

An environment reliant on traditional insurance models will not suffice in this evolutionary insurance environment, IBM noted. “The traditional business environment is changing from within the industry as new business models evolve (direct/Internet channel, including virtual environments), and from external forces, such as cross-industry consumer expectations about what a purchase/service experience ‘should be like,'” the study said. For instance, insurers lag retail banks in the number of products held per customer by 19 percent, the data showed.

“Insurance providers can no longer follow the ‘one-size-fits-all’ approach to product offerings and channel distribution and expect to remain competitive,” emphasized Bill Busby, partner at IBM’s Global Business Services, Americas Insurance Leader.

Yet adding Internet-based options alone will not suffice. Increasingly, U.S. consumers want companies to more effectively communicate new products and services available to them, provide tailored policies and services to better meet their needs, and bring their customer experience up to par with other industries, the study indicated.

“Younger customers want fast and easy transactions with little or no human interaction, while older customers continue to value a high touch experience and demand higher levels of service and quality. Meanwhile, customers across the board want their providers to offer more flexible products and deliver a greater degree of personalized service,” Busby added.

The study noted that few consumers think insurance companies have developed innovative ways to connect with them and enhance the relationships. “Capturing market share and driving growth through product innovations have been limited, or the value of the innovations has not been well-articulated by the industry. The overall result is increasing commoditization of insurance products.”

Increasing policyholder involvement and seeking customer input in product development could help improve the insurance industry’s good will. So could encouraging customer feedback then rewarding them for sharing that information through personalized service and relevant offers, the study said.

While it sometimes seems that selling insurance products eventually comes down to price, the study provided some hope. Three-quarters of insured Americans are satisfied with their insurance agents and remain committed to working with them in the future, the report noted. The goal is to encourage those customers to embrace and promote the company. Because as the IBM study wisely advised, surviving climate change in the property/casualty insurance industry depends on growing customer advocacy.

Topics Climate Change