After now – Where will Insurances go to?
Buying has been forced to change in the last year for the reason we all know. Buyers cannot go to a local shop and pop to buy sneakers anymore or even don´t want to go. Instead they buy it online. The event of buying has already been in turbulence as the local store functioned more often as the shopping window to give information and experience, but the actual purchase was made with the best offer online. Nowadays all has moved into the virtual world and the primary way of searching information, purchasing and experiencing happens while using the handy, portable and always available tool: the mobile phone. Where will insurance move from now on?
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How is the insurance industry taking care of their customers?
The common climate does boost for requirements of security in aspects to deliver a safetynet that buyers can rely upon in the need of distress. In principle this is the basis of insurance. The latest report from EY has discoveret that the insurance industry is understanding their way of helping customers different:
“60% of (financially impacted) said that they have not been contacted by their insurance provider”.
EY, 2021
https://www.ey.com/en_gl/insurance/are-your-insurance-solutions-in-tune-with-new-consumer-needs
It is a staggering number. Meaning that when there is the biggest of the need, there are nearly none actions taken by insurances towards current customers, not beeing there during this crisis as trustworthy advocates for buying decisions for future years. Now the ecomies in all continents are gradually getting back into shape, but there is still time for the industry to uplift their approach to support these future buyers of insurance products.
What will be the impact for insurances?
There has been discussions of disruption of the insurance industry for number of years and in large scale it has not happened, yet. With the help of the modern buyer the shift of moving to the next stages is closer than ever before.
“eCommerce increased more in the first 6 months of 2020 than in the entire decade beforehand in US.”
Andreessen Horowitz, 2020
This combined to the fact that: “76% of consumers changed stores, brands, or channels in 2020”
Mckinsey & Company, 2020
Now when there are easier ways to buy insurance products, handle claims, people have more emphasis to search online information, the threshold to shift from one insurance provider to another is closer than ever before.
Where do the buyers move?
There is substantial discussions of the impact of embedded and usage based products that fill two big desires of the buyer.
- Insurance is embedded as a part of the package making buying decision easy, in the sense that product and service re covered, but without the hassle of “jumping” to buy it from another system separately for insurance coverage that is not planned for you / your product
- When signing-up and -out actively from the coverage with the usage based insurance, customers can monitor and are aware where their money is going to. Its like buying the time from an eScooter company to move from one location to another
These areas are very likely to grow substantially to be 10% of the entire industry already 2030, as they deliver better awareness of your coverage and they fill the need of the buyer for that specific period of time.
What kind of products should be there for future buyer?
The following list will are innovative starting points for insurances to move into the space of the upraising product areas.
- Standardised products, deliver a specific cover
- Microinsurance, be part of the package
- Simplified terms & conditions, engage the buyer
- Deliver a service instead of an insurance
These are the secrets in the future to move closer to the potential buyer. As the insurance buyer moves away from the standardised product portfolio that did allow the industry to grow to its size being now.
Some helpful hints how buyers of insurances nowadys are choosing new products
- Buyers will much more precicely know, of what they want to cover by using checklists
- Buyers want to understand the terms and conditions and will reach out to the company before they buy
- Buyers have the possibility to also choose insurances outside of the home country and will actively look for it
- Buyers are first looking into the coverage given and second to the price
- Buyers think about of how much they are willing to pay themself in the case the insurance coverage is needed.
- Excess has a substantial impact on price of the products
- Making calculations between annual and one time insurance product buy
Summary of “Where to from now on Insurance?”
Insurance is being impacted by the change of the buyer behaviour, and we as individuals can also drive the industry with uprising solutions to be more personal than ever. The impact of insurance is potentially even greater than ever after the current crisis and it will be challenged if not following the buyers and their demands. When embraseing the change, insurances can be a more vibrant part of buyers lives and support when the financial protection is needed.
Best,
//Jussi
