The Digital Imperative - It's All About the Customer

Today’s insurance consumers are changing and evolving. Their needs for a more digitally pervasive and improved user experience has led to the birth of InsurTech “disruptors” allegedly “reimagining” the insurance experience.

This evolution of buyers is shown in the chart, and consumers can now be broken into four groups:

  • Digital Native: these buyers grew up with or have become comfortable with digital “ubiquity.” The internet has always been a part of their life and interacting with sellers online is fundamental, if not “old school.” They expect interactions to happen anywhere, on any digital device (smartphone, tablet, Alexa/Echo devices, etc.), with lightning speed and zero complexity. These buyers aren’t impressed with a quote in “15 minutes or less”; they want it in 60 seconds or less. While powered by the influx of Millennials (born ~1980-1996) and Gen-Z (born after 1996) into the insurance buying marketplace, they are augmented by many Gen-X/Yers (born 1965-1979) who came of age in the PC era and some Baby Boomer (1946-1964) technophiles.

  • Digital Adopters: with Gen-X/Y as their largest core, digital adopters have come to expect most if not all of the ease and simplicity of ubiquitous digital interaction as the Natives. They may revert to an actual phone call to a carrier less reluctantly than the Digital Natives, though.

  • Digital Competent: while this group may not have come of age with PCs and smartphones, they have grown accustomed to and comfortable with emerging technologies. They may not handle every brokerage or banking transaction online or by smartphone app, but they know how to. Even though they may still read a physical paper (sometimes just out of nostalgia), they are regularly reading their morning news on the train on a Kindle or iPhone.

  • Digital Challenged: this group prefers the old ways of interacting with their carrier or agent – by phone or even in person – and eschews (or distrusts) most things digital. They may pay by check (or cash) rather than ACH or credit card, and they want to speak with a person, not some “interactive voice response” system. The dwindling number of the digitally challenged is partly driven by the passing of the Silent Generation (born prior to 1945) but also by steadfast technophobes and those wary of digital transactions in general.

This demographic shift in insurance consumers’ psyche and technological sophistication makes it imperative that insurers and distributors accelerate their digital strategies to provide a more comprehensive, cohesive, coherent, and consistent digital experience for buyers across the insurance value chain. A digital strategy is not developing a new, “hip,” snazzy website or launching a smartphone app. Improving and tailoring the customer engagement experience will be vital, but improved user interface (UI) and user experience (UX) alone will fall short if underlying processes, approaches and thinking do not embrace a pervasive digital approach and evolving customer expectation and need.

Established carriers can learn from, adopt, and improve upon startup InsurTech innovations, much as they did in the e-commerce era. Ultimately, it may be less about “reimagining insurance” than refining, evolving, and adjusting to a digital world, new customer expectations and needs.

The digital era isn’t coming; it’s here.

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