Co-founder and president of Everest Funeral Package LLC, previously co-founder and president of Carriage Services (NYSE: CSV) and director and officer with Sovereign Holdings Inc. and RTO Enterprises Inc.
The insurance industry is caught in a paradox. While effort is being made to innovate, stark realities are getting in the way of advancing the industry in the best interests of the consumer. Antiquated legacy systems that don't have the ability to produce high-quality data insights and actuarial-led decision-making processes are impeding companies' ability to evolve into the digital age and leverage that data to better meet, and ultimately exceed, consumers' expectations.
Even with increasing investments in internal capabilities, a recent PricewaterhouseCoopers study of insurance company CEOs noted that the areas they would still most like to strengthen are digital and technological capabilities, followed by customer experience.
While both require changing the current way the insurance industry works, which is the biggest challenge, you cannot achieve one without the other.
As business leaders and managers within the industry, there are some key areas that we must focus on to ensure we are continually innovating and evolving how we deliver solutions for our clients.
The millennial generation should be a key target audience for us. It is currently the largest living generation. We constantly hear how they were raised with technology at their fingertips and that they are looking for more from the brands and organizations they choose to interact with. So what can next-generation insurance industry leaders and managers do to evolve to meet the growing expectations of today's consumer?
Build for the consumer, not the industry
"We've always done it that way," is all too often the answer to questions impeding change relating to archaic legacy systems, paper-driven processes and lack of digital advancement, particularly in the insurance field. Savvy business leaders recognize that today's consumer has different needs, wants and goals than the consumer of 10, five or even one year ago. Technology has changed the way they interact with businesses, and for the insurance industry to truly win tomorrow's consumer, it must build products and capabilities that focus on the consumer. That means leveraging big data, analytics and AI to inform companies on consumer behaviours, not just actuarial analysis, and help to deliver better products based on their wants, needs and habits.
Deliver services, not products
The single, most-important factor is that millennials don't want a product, they want a service.
Wealthsimple is a great example of a company that took a consumer-centric approach to the millennial market. The company recognized that millennials want easy, technology-based solutions that take the time and complexity out of the investment equation. Wealth Simple delivered a service and millennials bought into it.
At Everest, when we rolled a funeral planning and concierge service into a life insurance plan, we had the consumer at the centre of our thinking. We knew that if we could offer them a service, they would be more likely to buy our product.
Give them the tools
People today aren't looking for companies to plan their lives; they want tools that help simplify their lives in a world of complexity.
For example, they want the freedom to plan their own trips and curate their own experiences; virtual solutions like Airbnb help them do that.
Consumers want to be able to access the insurance industry with the same ease and simplicity as everything else in our lives today – hailing a ride with Uber or using Waze to help navigate traffic. As we look at how we serve our clients, we need to ask ourselves a question: "How is what I am offering my clients making their lives better?"
Keep it simple
There is a misconception in our industry that if something is simple, it must be cheap, and if something is complicated, it must be sophisticated and better.
The reality is just the opposite. People want simplicity. Especially millennials.
And this is what we in the industry, need to be constantly weighing ourselves against.
If it's simple to use and makes their lives easier, they will adopt it.
For the insurance industry, it comes down to one critical enabler: technology. If you want to provide insurance as a service, not a product, you need the right technology in place and be willing to adopt new practices to deliver on it.
The 2017 World Industry Report conducted by Capgemini and Efma found that 75 per cent of senior insurance executives believe developing insurtech (insurance technology) would help them meet their demands.
Yet, P&C Insurance Transformation found that many carriers who are looking to modernize their core systems are discovering that their on-premise hosting environment is insufficient to support new technology being brought in, as well as customers' and agents' real-time "always-on" expectations.
To transform customer offerings, the key for insurance industry leaders is to partner with technology companies. Technological innovation will enable our industry to be more responsive to consumer demands and to more quickly deliver creative solutions to meet their needs. For example, MasterCard recently teamed up with Toronto-based tech company Dream Payments to speed up the process for insurance claims.
As next-gen business leaders and managers, we need to confront these historical impediments to change and work proactively to make lives better for our customers. When companies put consumer-centricity at their core, there is no limit to what they can do.
Executives, educators and human resources experts contribute to the ongoing Leadership Lab series.