'The rapid rise of the digital economy is forcing insurers to innovate to survive. They must develop new products, improve customer experiences, secure additional markets, adapt their culture and change the tasks their employees perform.' writes Jean-Fracois Gasc from Accenture in this post.
He has a point.
When change comes it is sometimes easy to find some non-productive ways of trying to find security and safety for the current business model. One is to blame other actors in the value chain. Another is to seek regulatory rescue. In our distribution of insurance three large forces have combined to create change:
- Consumerism - with more activist and engaged consumers treating insurance like they do all their other purchases
- Technology change - with a channel shift to online and call centre within the intermediated, direct, and bancassurance channels
- Bancassurance - has risen to more than a third of all new sales by delivering on convenience of purchase and building cross-selling skills
I didn't list regulatory change. In some respects that has been a distraction to the business of delivering a relevant value proposition to customers. That may seem like a terrible thing to say, but insurance regulation has remained light touch to this point. Right now, with the Financial Advisers Act review wee only have a recommendation to make the AFA Code apply to all channels. Even if accepted, that will not actually occur for a couple of years.
Clearly, therefore, changes which have affected where customers buy, what they buy, from which channels, and how, have all largely been market initiated, not legislated or regulated.
In terms of a market share growth story it is all about call centres, banks, and online.