'Beware of upstarts putting insurers out of business'
This was the glaring headline on the Oct.30 edition of the e-daily, Asia Insurance Review, the official media partner of the 26th Pacific Insurance Conference ( PIC ) held from Oct. 28-30 in Hong Kong.
The idea of the PIC was mooted at an informal gathering in Tokyo in 1958. The first PIC was held at the University of Hawaii in 1963, and attended by 47 life insurance executives and university professors from six countries. The PIC mission is to share the free exchange of ideas and experiences concerning management, marketing and customer service in a spirit of international brotherhood in the insurance industry.
Many issues were raised during the proceedings, which I attended representing Avatar Global Consult. However, the one that grabbed my attention most was the above statement. Something that I believe ought to be seriously addressed in our own backyard.
To some, this may have been a shocking statement, to others perhaps a wake-up call. It was the result of a panel discussion on the second day of the conference on the topic of 'Responding to Change'.
Maria Ferrante-Schepis, managing principal of insurance and financial services at Maddock Douglas Inc., brought up the question: 'In what would be a 'Napster Moment' for the industry, insurers could be removed from their own turf by others who are able to reinvent their business to better meet the needs of today's customers'.
She reiterated that the reason the industry continued to face the same problems was due to its lack of relevance to customers.
What is actually happening?
Harry Beckwith, in his book Selling the Invisible, stated that technology created the adopter age. The adopter became more proficient sooner and quickly recognized the benefits that newer and more advanced technology brings to businesses and industries. But the real adapters learn even more quickly and apply it to their own competitive advantage.
Today, dozens of service companies are sleeping. But smart marketers early in the game have already recognized the many ways that technology can be applied to create customer service excellence in many competitive landscapes.
Every service company should embrace technology to their own competitive advantage. In addition, management should continually ask questions on how newer and more advanced technology can be used to improve their services and grow their businesses, by making technology a key component of their marketing strategy and business model.
As mobile technology, smartphone apps and social media have not only dramatically changed the way we interact, but how products and services are being marketed, social networking applications, and their seemingly unlimited usage will continue to skyrocket in the foreseeable future. Furthermore, the phenomena have also changed the way people make buying decisions.
What are industry leaders and practitioners' perceptions and thoughts on this phenomenon?
Jason Sadler, president of Cigna Global Individual, said that the digital age was truly changing the playing field for the business and it was something that had to be considered extremely seriously. It is providing a new level of customer empowerment, where customers can have access to real-time unfiltered opinions and recommendations on brands and products. 'It is not just the digital age, it is also the age of transparency.'
Nirmala Menon, head of designated markets and health Asia, MetLife Asia Pacific, who chaired the panel, quoted Sir Winston Churchill as saying: ' 'To improve is to change, to be perfect is to change often'. So let's all go out and try to get closer to perfection as we go about our business,' she concluded.
Embracing new technology is the key for life insurers to succeed in the future, be it in marketing or product distribution. Key trends identified as imperatives for success included social media, huge data and analytics, as well as mobile and multiple customer touch points ' all of which contribute to creating new ways of engaging and profiling customers.
Ross Mayne, CEO of Munich Re Automation Solutions, said there was a global move toward automating new business and the value process in life companies. The primary driver is usually the need to increase sales in the face of competition; a secondary driver is when an insurer wants to grow its business without having the proportional increase in operating overheads. And automation had become the key enabler toward that objective, he added.
'As consumers become more affluent and sophisticated, simply selling product will not win their business and their hearts. Insurance companies need to be more customer-centric, be able to understand their customers' needs and provide personalized solutions. Distributors have to be knowledgeable and resourceful to provide tailor-made advice. To succeed, we are also required to invest heavily in technology and staff training so that customers can have a wonderful experience when they interact with us', said Michael Huddart, EVP & general manager of Manulife, Greater China.
Ronald Arculli, chairman of FWD Group, said that Consumers were much more connected than before, and they would increasingly use multiple sources that they can trust to receive information, without the pressures of being sold. Studies have shown that customers' trust is shifting toward Internet sources ( from 22 percent in 2011 to 28 percent in 2012 ), and social media ( almost doubling from 9 percent in 2011 to 17 percent in 2012 ).
It was a myth that insurance could not be sold online, he said. While the actual touch-points by buyers of insurance are 32 percent agents, 20 percent independent financial advisers ( IFAs ), and 17 percent online; the preferred touch-points were 43 percent agents, 35 percent IFAs and 45 percent online. So key to a company's success will include answering the questions: How well do we understand the next generation, and how do you leverage technology and touch-points to impress customers?
'We need to embrace a digital mind, in order to catch up and make a great impression on the customers of the next generation' he said.
The writer is co-founder &
managing partners of Avatar Global Consult Limited