The football playbook has changed dramatically over the years. Teams no longer use the single-wing formation, and it has been a long time since anyone has tried a drop-kick. Since the invention of the forward pass, coaches have continually experimented and adapted to change with new plays and strategies.
Insurance has changed dramatically in recent years, as well, but the playbook used by many claims organizations has barely been expanded. Rather than develop new plays, many insurers simply try harder with strategies and tactics that are inappropriate or outmoded. These insurers should not be surprised when they don’t get the outcomes they desire.
Insurers used to view differences in age and demographics as key determinants of consumer preferences, but we now see a new consumer emerging—a digital-savvy, mobile-enabled skeptic who questions conventional assumptions and insists on dealing with organizations on his or her terms. Across ages and genders, insurance customers have become more demanding, more critical of carriers’ attempts to differentiate themselves, less trusting and loyal, and more open in their search to find products and services that better match their needs.
This change in attitudes is not “all about the money.” Our research indicates, in fact, that this new breed of customer is actually willing to pay more—11 percent more, on average—for the right products and services. There is a broad gap between what today customers regard as important and what they believe they are receiving from their insurers. Closing this gap will require claims executives to come to grips with some challenging new realities.
Social media, for example, offer a wealth of insights about consumers—but only to those who can make sense of the 25 billion pieces of information that are shared every month. There are more and more commercial databases on the market, along with usage data collected by means of telemetry and global positioning systems (GPS) and asset damage records collected by the millions of radio frequency identity (RFID) devices now commonplace throughout the logistics supply chain.
When these and other forms of data are aggregated and analyzed, they create the platform for a whole new world of context-based services. Such services extend far beyond location-based services, adding rich layers of insight into who the customer is; his or her needs, intentions and attitudes; and what might spur them to act in a particular way at a particular time. This type of information represents a great opportunity for insurers to become smarter, quicker and more precise, offering products and services in a way, and at a time and place, when they are most likely to be accepted.
Claims outcomes overall remain quite mixed, with varying degrees of consistent top level performance. The financial impact of this underperformance is immense: In the U.S. property and casualty (P&C) industry, a mere two-percent improvement in loss costs would result in an $11 billion annual increase in the bottom line.
Addressing the People Imperative
Innovating Through Technology
In the claims organization, technology is creating tremendous opportunities for innovation, efficiency, and effective decision-making—opportunities that early adapters have seized to gain competitive advantage. The “consumerization” of technology continues to place new pressures on carriers to become more open and flexible, regardless of the platform or channel through which the technology is being accessed.