The essence of insurances
When we look at the essence of insurances and how its described inside the industry, we should be able to deliver a new vision that would move towards the industry. Let us start from the background and look at the official definition of insurance:
“The act, system, or business of insuring property, life, one’s person, etc., against loss or harm arising in specified contingencies, as fire, accident, death, disablement, or the like, in consideration of a payment proportionate to the risk involved. coverage by contract in which one party agrees to indemnify or reimburse another for loss that occurs under the terms of the contract.”(dictionary.com)
Looking at the world of insurances from the customer perspective the focus seems to be somewhere else. Let’s have a peek at an advertising of an innovative new product from an insurance carrier:
“Probably the best car insurance you ever had. With xxxx, you can save up to 40% compared with your current insurer. Rewards safe driving, 5 additional drivers are included, 100% flexible via app. We care about your safety. That is why you will receive a voucher of 5% for each year you do not make a claim.”
On the other hand let’s have a closer look on definition and advertising to the telecommunication industry focusing on mobile gadgets: Definition: “A phone that does not have wires and works by radio, that you can carry with you and use anywhere”(Oxford Dictionary)
Ad: “The new xxx phone. This is just not a smartphone. This is a powerphone. That works like a computer. This is not just mobile gaming. This is xxxx- Gaming on 5G. This is all day battery. This is the xx phone. The power to work / play.”
What should we learn about these two different industry examples?
The meaning of insurance is noble and has all the relevant ingredients to be as interesting for the buyer as the mobile phone ad. I already can hear the discussions: `” it is not so simple, insurance is far more complex` or `we cannot compare it to anything else as you pay for the risk instead of a product e.g.` “
This in my opinion is just partly true, when we look at the history of industry since the first policies in 1750 BC as a business, when insurances were also noted as substantial gift to be given. Back then it was a biproduct of a loan.
The complexity of insurance policies has resulted into a so-called ´solution to advertise´ new or existing products with their cheaper price in comparison to others. But missing the coverage value fact for the customer when the insurance is really needed. Before there is a similar claim for the different polies of the same product.
There has been already a substantial amount of discussion that the insurance will change. But if insurances don´t start from the basics like delivering real value for the buyer, we do risk the continuity of the industry as being independent. Hence to move back of being a biproduct of something else.
How to deliver value?
Let´s translate the insurance advertisement into the form of the mobile phone. In that case of the mobile phone the price nor the cost is the essence. We should be bold and at the same time brave as we are experts explaining why the buyer should have just this insurance product from us.
Here my proposal for a new – customer needs focused ad:
“The car insurance. It just not an insurance for you, it is for you and your five friends. We deliver protection when you drive safe and work harder if something happens to you. You can do everything instantly online 24/7. This is your car insurance. You drive, we take care.”
Final words on the essence insurances
We as insurance industry should be looking outside the box, rely that we are the insurance experts that we can show to our potential customers, deliver the value to the existing ones and reshape the insurance world also in the future.
YellowMay evaluates the value of insurances for customers by looking at the terms and conditions. As we believe that being able to visualise and explain the essence of the products is something the seekers of insurance do value even more than the talk of money. They can use it to buy something else that does deliver something else than SALE as a value.
Have a look at our new website and be in touch to our team for more ideas relating to insurances.
With warm November greetings,
Jussi Tommola CEO, YellowMay