Now that we’re a few months into the year, it’s becoming even more clear where the insurance industry should focus its modernization efforts in 2016.
The insurance industry is at a crossroads. While other other sectors like finance and banking have been rapidly modernizing, the personal aspects of insurance, like interaction between agents and their customers to sell fixed policies, seem a bit rooted in the past.
But if you ask experts in the field, this emphasis on paying individual attention to customers is an advantage, not a hindrance. It’s true that many agencies have a long way to go before catching up with more digitized businesses, but it’s important that insurance sellers must be careful when advancing their strategies, or they’ll lose their greatest assets in trying to furnish new ones. Here are a few of areas in which insurers must modernize to find success in today’s ultra-competitive, interconnected market.
Big Data and Analytics
Leveraging big data technology was actually an area of modern innovation that the insurance industry adopted early on — as it should have, since the massive amounts of information associated with the tech is essential for constructing modern risk models.
In other respects, however, the insurance sector lags behind other industries in the big data space. Most notably, agencies tend not to properly leverage the vast troves of data available for new product development and marketing processes. When so much information is at hand, policies should be more than simply optimized — they should be more personalized to fit each consumer. What’s more, being able to use all of the transaction data available can help agents with their client targeting efforts, helping to match modern policies to modern insurance customers.
Cloud Computing and Remote Offices
As cloud computing continues to absorb more and more business functions, those who fail to make use of its network and data storage abilities are going to be left tethered to tradition. Along with improved IT service delivery, cloud computing offers an opportunity to unify customer data across systems and offer new distribution models for customers among many other benefits, according to Accenture.
One of the largest costs of operation for the insurance industry is its actual brick and mortar office locations — the need for which is minimized with cloud services and big data strategies, which make information accessible from practically anywhere. In 2016, look for leaders in the industry to experiment with a remote working agent model to test the waters before the first cloud-based agencies begin to float away from physical locations.
Power in Consolidation
Consolidation is already a major trend within the insurance landscape. Major health insurance providers are acquiring each other and merging at a rapid pace to keep pace with market — but the giants aren’t the only ones that could benefit from coming together.
LifeHealthPro envisions even local offices joining forces, consolidating their resources into one-stop shops for all the coverage a consumer needs. This makes it easier for agents to not only sell a customer on the services of a one-stop shop, but to collaborate with agents focused on different verticals in order to solve issues and offer a range of complementary services.
Cyber Risk Management
As with all business that lives online, the threat of a cyberattack is a constant one — especially given the insurance industry’s reliance on its policyholders’ personal information. According to LifeHealthPro, a survey conducted onsite at the Xchanging London Market Conference found that only one-third of insurance customers were confident in their insurer’s ability to withstand a major cyber attack. In 2016, a major focus should be on protecting consumer data.
That said, cyber-vulnerability might also provide new opportunities: cyber insurance policies. In order to truly modernize, insurers must capitalize on the market conditions and expand their efforts to protect those with fewer of the resources to protect against dangerous online predators.
Optimized Online Marketing
As we’ve seen, the interpersonal interactions that define public perception of the insurance industry aren’t changed by these reforms — in many cases, our suggestions will augment agents’ ability to provide traditional, personal service. It’s important to understand that the personal touch on business isn’t the issue. Rather, it’s the way in which agents engage their consumer base that’s due for an update.
To reach new customers in 2016 (especially the coveted, underinsured millennial demographic), agents must harness all modern tools available to them. Social media campaigns, targeted SEM efforts, and pay-per-click and pay-per-call campaigns will all bring new consumers to the table.
In order to reach across the web directly, internet lead generation services can connect actively searching consumers with agents ready to find them the best policy, making the insurance buying and selling process as streamlined as possible. After all, it’s 2016 — everything should be getting easier in the modern age.
(Image credit: Thong Vo/Unsplash)