People
One notable finding from the newly released third annual AlixPartners' Disruption Index is that 72% of CEOs are worried about losing their jobs in 2022 because of strategic/technological disruption. This tracks closely with the 94% of executives who say their corporate models need to be overhauled within three years. These are staggeringly high numbers. They are universal across both industry and country.
On the heels of this release, I wanted to highlight how disruption is affecting the insurance industry, spanning all types of insurance company product lines including property, casualty, personal (home, auto), long-term care, as well as health and prescription insurance.
Obvious disruption factors include technology and digitization, but a larger factor is shifting consumer and customer expectations. Technology has brought us to the point where we expect to click an app on our phones, and within seconds be able to see detailed information about anything, whether it's a stock price, the weather, or the balance of our checking accounts. We, as consumers, used to have more patience with regard to checking our account balances or coverage limits on an insurance policy, but that's changed. We now expect immediate access to our information, and that includes knowing if the water damage in my kitchen is covered by my homeowner's policy.
We can group these expectations into multiple themes. The first is personalization. Personalized offers, pricing, and experiences are becoming more and more expected, along with consumers' willingness to share more personal data to have these experiences with the expectation of less expensive insurance. Information is being shared via smartwatches, monitoring devices in cars, electronic thermostats in our homes, among others. Data transparency is becoming more accepted, and transparency between insurance companies and both personal and commercial customers is now the expectation.
The next theme is omnichannel engagement. In the past, insurance products were marketed directly, either face to face or over the phone. Expansion of channels now includes over the web, both in a traditional desktop browser or mobile application, as an extension of employer benefits, or via direct marketing and advertising. This theme is enabling access to younger generations (e.g., Millennials, Gen Z). Generations who have grown up with technology now expect direct, personalized offers based on their digital behavior. In fact, this engagement model has become a preference for Gen Z, as social media and real-time personalized communication is expected. Leveraging data and digital behaviors, insurers will connect with specific customers and customer segments more effectively. Data captured through all channels can be aggregated to measure and improve marketing tactics, insurance product demand and effectiveness, and overall insurance business strategy.
Improved intelligence is the last theme I'll highlight. As omnichannel expands how to engage with customers, aggregating data across those channels becomes simplified for some channels but requires improved data capture for others. Centralizing and aggregating data from each channel doesn't need to be complex and in fact, can be automated in most cases. Building a centralized set of data can be implemented along with automation and process modification. Social media insights and data can be monitored and captured and aggregated. As data is collected analytics enables key business insights. Within insurance, this includes monitoring product trends including customer analytics and cross-generational policy trending, analysis and refinement of underwriting policies, and rate and claim validation and refinement. These insights will allow insurers to refine their business models, go-to-market strategies, and product line investment. Analytics and insights enable the agility insurers will need to have to remain competitive and respond to disruptive forces.
Gone are the days when we walk into an insurance broker to talk about life insurance. Today is about customization, immediacy, and transparency. The customer of today doesn't need shopping malls and department stores, today's customer needs to be catered to, both with customized products and access to their information at all times. All industries are adapting to this new reality. The financial services industry has been at the forefront of this change and the insurance industry needs to follow.
