Consumers want absolute flexibility.
- Subscription motor insurance policies have been embraced by consumers quicker than we’d thought. So many other services that customers buy now are on a subscription basis, so in a world of constant change and need for flexibility, the 12 month cycle now looks a bit outdated.
- Usage-based motor insurance is going to become increasingly popular for certain customers. Data coming directly from the car means that (maybe with the exception of younger drivers) the days of third-party boxes being fitted to the car may look a bit “Betamax”.
- Customers are going to be ever more cost-conscious as the economy reels from COVID19 and Brexit, so asking customers to pay fees to change or cancel their own policies is going to become a significant competitive disadvantage.
Consumers want transparency and dialogue.
- The FCA being proactive on the issues of customer fairness (motor insurance) and policy language (SME Business Interruption) are two important signposts as to the active role the FCA will be playing in the future.
- Customers want transparency, responsiveness and open dialogue embodied within their insurance relationship. No more “computer says no”.
Consumers’ brand loyalty is changing.
- Price Comparison websites (PCWs) in the UK have had an incredible run, and hats off to them for the way they’ve inserted themselves so strongly between customers and insurers. But as the regulator toughens and champions transparency, customers are now more aware of the material cost they effectively pay PCWs as part of their premium. This is a clear opportunity to create new channels as alternatives to PCWs.
- Car manufacturer-branded products delivered in a radically simpler way, and at times embedded into the transaction (flexi-lease, subscription etc). These are trusted brands, so as long as they’re price competitive, this is becoming an increasingly attractive channel for a customer to choose.
- Online car marketplaces are bound to be a growing trend in the ever more digital, post-pandemic world. If insurance is seamlessly inserted at the point of sale, then it’s a win-win.
Consumers wanting insurance option embedded digitally with opt-out.
- “Do you want fries with that?” is a simple analogy for insurance becoming increasingly embedded into transactions. Customers should have a very clear and easy opt-out mechanism at any time not just at the moment of the transaction.
- Customers don’t want to have to think “insurance?”, they are going to expect it to be available at the point of purchase, as long as its seamless, frictionless and transparent.
Consumers want everything digital.
- Customers don’t want policies scattered throughout their filing system, they like the thought of some of their insurance products being accessed in one place. Distribution partners equally like the thought of being able to seamlessly offer additional services/products through the one wallet (e.g breakdown, travel, motor, cosmetic repair etc)
- Who’s been one of the biggest winners during (and likely, after) Covid-19? Alex Chesterman, founder of online car retailer unicorn Cazoo reckons his market has doubled because of the lockdown “digital businesses are the clear winners” he said. So the insurance industry has to accelerate its efforts to digitise if it’s going to a) win/keep customers and b) reduce its costs base - this means all aspects from customer service (call centre) to product design
- A depressing comment made by a consultant advising a number of large insurers, when asked if the digitalisation topic was still high on the agenda for insurer C-suites…..”they’re delighted that with having now cracked the use of Zoom and Meetings, they feel that the company-wide digitalisation imperative is a little less urgent….”
Consumers are now more responsive to state-sponsored insurance mechanisms.
- We now have the surreal situation where a Conservative government is embracing policies that would have made their voters wince if advocated by a Labour government.
- State-sponsored solutions for some of the knottier insurance industry problems are now common-place, and this trend will likely continue. Flood Re, Pool Re, Pandemic Re, maybe Cladding Re (post-Grenfell building materials issue)
- Maybe we might see an enlightened government develop a similar insurance support system for Millenials accessing EV cars on a usage basis? Just a thought….
Wrisk’s insurance tech platform in this new world:
- Operates for consumers on a subscription basis.
- Has a low cost to serve (requires approx 50% less involvement of customer support activity).
- Has achieved 3x acquisition of customers than by using traditional call centre based systems.
- Branded for the consumers’ chosen channel partner (eg car manufacturer, online dealer etc), not for the insurer or the comparison site.
- Is frictionless and seamless for customers to operate.
- Entirely configurable for distribution partners’ needs.
- Future-proofed for evolving trends (sharing, autonomous etc).