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The Insurance Industry's Next Big Hurdle: Customer Centricity

Roi Agababa
Roi Agababa

Insurers are stuck in the past. Here's how to change that.

The insurance industry grew up as a product-centric industry.

Today, that model is crumbling.


Because consumers are smarter. They expect more. They don't want to do business with a company that only contacts them once or twice a year when premiums are due. They want a partner that cares about what happens to them.

Enter customer centricity.

Customer centricity focuses on putting the customer first. Sounds simple. Intuitive. Obvious. And yet, it’s incredibly rare (at least in the insurance industry).

The outdated norm

Customers are largely disconnected from the insurance companies they do business with.

In almost every other service industry, the customer is doing business with the company they're buying the service from. Or they are buying from a vendor with close ties to the manufacturer.

In the insurance industry, customers buy from an agent who sells them a service (the insurance) as a product (the policy), and then they don't talk to each other until the customer needs to file a claim or the agent wants to sell another policy.

Insurers are stuck in the past, doing business in a way that alienates their customers. Products are often rigid and inflexible. For example, when a customer wants an automobile insurance policy, they have to pay for coverage even when a vehicle sits idle at work or at home. People only drive maybe 3 to 5 percent of the day, and yet they're charged for having 24/7 coverage. The product doesn't actually fit their needs.

What's more, insurance companies and brokerage offices run on outdated technology that doesn't serve them or their customers properly. They run on legacy systems which, in some cases, still require manual data entry for critical tasks like policy billing and renewal.

These systems are costing insurance businesses more than they think, because they're not scalable and cannot accommodate new product innovation. Additionally, they're not flexible enough for easy integration with the rest of the insurance world (think APIs).

Information is stuck in a computer system that doesn't communicate well (or at all) with other computers or offices. Workflows are often predetermined and cannot accommodate individual consumer demands or special requests. They're made to carry out a specific process, regardless of whether that process benefits the customer.

As bad as it has gotten, many insurance businesses haven't given up. They're beginning to modernize and upgrade old systems. They're developing consumer-facing portals and embedding data analytics into their ecosystem.

However, it's just not enough. In most cases, they need a complete overhaul. From top to bottom, the company needs to transition to being more customer focused. And, that needs to be reflected in all its operations, not just the client-facing ones. 

Here's the solution

The insurance industry needs to transform to being completely customer centric. Although you can't do anything about the industry as a whole, you can do something about your own business.

The main goal should be to develop a new, seamless, personalized customer experience that provides value to customers, which implies creating an impact on multiple touch points. This happens by having a customer-focused strategy that optimizes customer value at every touch point.

In practical terms, it means designing everything, including products, to be more beneficial to customers. It means providing the ability to design custom products for customers based on their own unique needs. It will completely change the way you interact with them, but it will be for the better.

But how exactly do you achieve this?

By taking advantage of the innovative insuretech that's available today. 

How to get there

Technology is the key that can unlock a holistic view of the customer journey for you.

Artificial intelligence (AI), such as the use of bots, and data analytics can be used to better understand customers and let them have (mostly) what they want.

For example, let's say that a customer has health insurance and needs to use it. But he wants a choice in the type of care he receives. Instead of going through the usual channels, a more customer-centric approach would be to let him tell his doctor his symptoms and then devise a sensible treatment plan.

In the U.K., this is a problem, because the healthcare system is nationalized. However, applications that meld big data with AI are changing that. Babylon Health is an example of how technology is changing the way people receive healthcare.

Customers can send a message directly to a doctor and receive a fast response without waiting. The tech uses a combination of bots and real doctors to deliver ultra-fast service to patients without sacrificing quality care.

Technology can also be used to understand the most critical information about the customer across all lines of business. With this 360-degree view of each customer, you'll better understand what coverages they have (and don't have) and predict what their future needs might be.

All of this information has to be accessible in a one-touch interface.

Upsells and cross-sells have to be easy and relevant to the customer's needs and financial situation.

And finally, the customer needs to be in control. This usually means designing self-service portals so policyholders can manage and pay bills, make policy changes and contact their agent or even the company (gasp!) directly. 

Utilizing data analytics

Insurance businesses need to take advantage of the data they already have, instead of letting it rot in their databases. Using this data to personalize products will soon become a necessity, as some clever startup insurers are already implementing data they've collected about their market to provide more personalized services.

For example, one insurer in Singapore collects data through wearable devices to provide more customer-centric insurance. They introduced a program providing affordable insurance to diabetics while helping them manage their condition. Portable monitors track their blood sugar and heart rate, and the insurer is able to adjust their risk profile while providing coverage to a decidedly underserved market.

Omnichannel outreach

Customers want to communicate directly with their insurance agent anytime, anywhere. If you want to meet that demand, you have to engage them via email, phone, web-based portals, banking integration and various connected devices.

However, being able to contact you through different channels isn't enough if the service experience through each channel varies greatly. Nobody wants to be told one thing on the phone and something completely different through social media. Your omnichannel strategy has to offer a consistent, cohesive customer experience, regardless of which channel the customer is using.

Artificial intelligence, bots and the internet of things

More companies are realizing the power of the chatbot. Chatbots can intelligently answer questions customers ask and do it in a natural manner. If the bot is set up correctly, people might think they're talking to a live human being.

Bots can be used for routine activities like billing and payments, initiating a quote or canceling a policy, and basic policy servicing.

Bots don't need sleep and aren't restricted to an 8-to-5 schedule. Bots also reduce the need for cross-functional, cross-line-of-business specialization since bots can be little computerized product experts, replacing the need for extra staff.

Finally, bots keep employees on high-value tasks and reduce wasted time and the need for training on new products. Not only does it make the business better by improving operational efficiency and reducing operational costs, it makes the business easier to manage.


Customers freely give away mountains of information online. The next generation of insurance businesses will capture that information, analyzing, organizing, and using it to improve their offers and the customer experience.

There's an opportunity right now for you to design your business differently, sell differently and become more customer centric. Take advantage of the available technology and don't get stuck in the past.

Image Credit: Constantin Stanciu/Shutterstock
Roi Agababa
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