Insurers need to seriously rethink their role as ‘traditional assumptions’ – study

Consumers expect insurers to address some of the world’s biggest challenges such as climate change, aging populations and healthcare inequalities. They also have a strong desire to make their lives less risky, according to a Bain & Company study.

A majority of consumers (80%) say they want insurers to incorporate environmental, social and corporate governance (ESG) initiatives into their offerings. More than half (59%) want insurance companies to reward them for living a healthy life.

Respondents expressed an overwhelming preference for risk prevention services in auto, home, life and health insurance, but few use the services currently offered in the market.

Only 4.3% of respondents in the US said they used services from their insurer, but the numbers were dismal in Singapore (4.1%), Switzerland (2.7%), Japan (2.5%) and the UK (2.1%). was.

Bain and Company, a global management consulting firm, commissioned Dynata to survey 28,765 respondents in 14 countries.

“Consumers want more. [traditional premise where] We are no longer satisfied with insurance that simply provides capital to cover losses,” said Tanja Brettel, practice executive vice president, Bain & Company, at the Insurtech Insights Europe conference in London earlier this month. photo) said.

Disruption and uncertainty accelerate consumer shifts

According to a report by Bain and Company, consumer interest in ESG has increased in recent years, in part due to a great deal of turmoil and uncertainty.

“Extreme weather events, disease and Covid-19 pandemics, aging populations, and technological disruption have combined to fundamentally change the risk landscape, both through increased risk and different types of risk. ,” said the report.

Faced with increasing demand for what Bain & Company calls the “functional element” of their value proposition, insurance companies are creating an identity crisis at the confluence of all these factors.

Risk mitigation, increased ease and convenience, and claims payments are just a few of the key services consumers expect from insurers. But companies must evolve rapidly to deliver better social impact, life-changing, and emotional value in order to remain relevant.

“It’s so hard to get the basics right. But consumers still want more,” Brettel told the audience at Insurtech Insights Europe.

“They want to be rewarded, they want companies to be ethical, they want insurance companies to invest in their well-being.”

Why is my insurance company’s risk prevention service not connecting?

Risk mitigation and prevention is a new frontier for insurers, according to a Bain and Company report. But if consumers want to act proactively to mitigate risk, why not use the services of insurance companies?

Brettel said it could be because many risk prevention services focus on the policy rather than the customer.

A case study demonstrates the power of insurance services to remain focused on customer needs. The life and health insurer’s AIA’s Vitality app has over 300,000 signups in the first year of its launch. This app for young Thai families offers health information, a family event and vaccine tracker, and an online parenting forum.

“They started with the customer, not by figuring out how to get the product out into the world. I’m here.

“Push” to “Pull” Distributed Model

As insurers redefine their role and value in the market, agents and brokers have an important role to play.

Telcos will shift sales model from “push” (focus on acquisitions) to “pull” (use data and analytics to meet customer needs and priorities), according to Bain and Company report is needed.

This means a dramatic shift in how brokers and agents work, spending less time on low-value tasks and more time building relationships with career partners.

“In many markets, traditional sales forces play a critical role not only in driving adoption, but also in increasing sales and converting online to offline,” said Brettel. increase.

Redefining the role of insurance

For most organizations, the transition to risk prevention and a purpose-driven business will take time. Brettel cautioned that leaders should not expect immediate profits from this pivot. But she emphasized that the long-term results are worth it.

“Don’t expect to be profitable in the first year. Building it takes patience. The key is to focus on defining a path to monetization,” she said.

“This is about the customer. This is about redefining the value we deliver to our customers. Their desirability should be front and center.”

Do you agree with Bain & Company’s findings on insurance customer expectations? Share your thoughts below.