Buying insurance is a daunting process that customers often begrudgingly undertake.
In fact, according to a 2011 study, customers use on average more than 11 sources of information before making an insurance purchase. That means that before the business is even aware of the potential customer’s interest in their product, the customer has already begun his or her research, opening them up to what is commonly referred to as the zero moment of truth (ZMOT).
Since the Zero Moment of Truth premise came into being, the channels used by customers have broadened significantly, and social media and mobile device research have become more prevalent.
Darrel Orsmond, head of financial services at SAP Africa, says that the digital economy and the Internet of Things have changed the way the insurance industry is able to anticipate and respond to clients’ needs.
“Potential clients, aside from being more aware, are able to conduct in-depth research from any mobile device connected to the Internet,” he says. “This translates into a more competitive environment for the insurance companies offering services. Customers are utilising the omni-channel approach, which means that various digital and physical touch points are being utilised throughout the purchasing process.”
At the Financial Services Forum held in London during June 2015, Bob Cummings, global head of finance for SAP, explained how financial services will move from a product based industry to a customer protection industry by creating a customised product base.
Orsmond unpacks the new approach to insurance:
* Be aware – As an insurance company wanting to move into the future, as effortlessly as possible, everyday changes in technologies and customer perceptions need to be monitored and anticipated.
* Customer-wise – Customers are not as complacent as in days gone by – they are tech savvy, and know what they want. Companies need to embrace this and use it as a stepping stone into the buying process. Customers are able to login using their social media credentials, providing access to invaluable information, while online chat capabilities give the feeling of being heard. All of the available channels and elements of the process must be utilised.
* Know the pitfalls and challenges – Being ready to take on the digital economy is great, but if technology is not your core business, it may be wise to take on a partner who is able to lead your company through the transition. Cost of failure can outweigh any potential benefit drastically, not just in financial terms but in reputational terms too.
According to Madison Insurance, based in East Africa, an increase in efficiency and rapid decision-making are key factors to increase profitability in the competitive insurance market. Most insurance companies believe that the days of tedious spreadsheet reports that take weeks to generate or the laborious process of capturing claims are gone. The insurance industry is becoming leaner and faster.