In a recent carrier survey by Bain & Company, 70% of respondents indicated that they would be willing to purchase related products, such as home security monitoring, from their insurer.[i] For P&C carriers, this should be one of those take-notice moments. Insurers that provide more than one insurance product to a customer already realize an 85% or greater share of wallet.[ii] Imagine the revenue-churning power of delivering a suite of renewable products, each geared to the unique needs of your customer. For insurers, becoming a P&C solution provider could open the door to endless possibilities, as long as they are positioned to capitalize on the trend.
The last time we checked in with Agent Todd, he was happily writing new business and acquiring new customers thanks to the digital capabilities and product selection he’s gained from his digital distribution platform. He knows that nearly 80% of his current and future customers want the ability to interact digitally, and he’s happy to have a platform that finally supports everyone’s needs, especially after talking to his friend Agent Ned who works for a competitor.Todd used to be a little jealous of Ned. His company was a forerunner in the industry, leading the charge toward anything new and better. In fact, they were one of the first to see the writing on the wall about changing customer expectations and decided the only way to reach digital superiority was to scrap their decades-old legacy technology for all new core systems. Well, all of Todd’s envious feelings disappeared today after he learned about the rollout of Ned’s company’s brand-new systems.
Lemonade is making headlines as the Uber of insurance. What does that mean, exactly? Lemonade is expected to disrupt the P&C insurance industry in the same way that Uber transformed transportation services. While much of the talk suggests that established P&C insurers won’t be able to compete in this new environment, many incumbent carriers are already contenders thanks to their digital distribution platform.
If there is one place where P&C insurance carriers really stand to lose in the current customer revolution, it’s in the case of digital distribution. Seeking simplicity, nearly 80% of P&C insurance consumers want to consolidate coverage with one trusted insurer[i] while purchasing their coverage online.[ii] To better understand the impact this has on the P&C insurance industry, let’s follow two separate carriers through a typical day.
Last week, we followed exclusive insurance agent Todd as he stumbled through the day without the digital tools he needs to compete in today’s P&C market. Today, we’ve decided to check back in with him again, to see how his performance is improving now that his company has adopted a new digital distribution platform.
Todd feels like a long distance runner, taking on the race in flip-flops. He’s ill-prepared for the undertaking and encountering frustration turn after turn.
As fall approaches, thoughts turn toward cooler temperatures, shorter days and of course, back to school preparations. For parents of college-aged students or those attending boarding schools, this elicits not only bittersweet emotions, but also thoughts on insurance coverage as students assume residence in school dormitories or off-campus housing.
During the 2016 Olympic Games, swimmer Michael Phelps’ won the 200-meter individual medley, skyrocketing the highly decorated athlete to new heights and breaking the record for the most individual victories—a standing that dates back to 152 B.C. Meanwhile, fellow swimmer, Katie Ledecky, was blasting the historic precedent she herself set in 2014 for the 800-meter freestyle. As insurers vie for market share against new competitors in a changing landscape, it’s time they started setting some records of their own.
Increasingly, consumers view P&C insurance products as a commodity and insurers have had to respond in kind. Focused on providing a limited line of offerings that meet the needs of most consumers, price becomes the primary differentiating factor between one carrier and another. In the quest to gain new business, insurers have been drawn into the price war instead of calling on the strength of their products and service to garner new customers and establish loyalty.
In an era where personalized services and offerings are the norm, P&C insurers have fallen into the commodity trap, failing to differentiate themselves and their products from the competition. As a result, customer loyalty has fallen and price has risen as the primary factor in differentiating coverage.