Insurance is nearing a significant turning point, one that has the potential to revolutionise the sector’s relationship with customers and the public in general. Those with foresight, initiative and more than a little single mindedness will transform the sector.
At the heart of this revolution will be big data. Yet it will not be the data itself which will drive events. The sector’s been through several data revolutions before and while this one will certainly be big, the game change will come not from how much can be accumulated but how it is used the forge a new relationship with the customer.
Data counts for nothing. It’s the information running through it and the insight that can be drawn from it that matters. And such insight matters not just to the insurer, but to the customer as well. The game changing insurers will recognise that dual dimension and use it to forge that new relationship with the customer.
Rather than hiding that information away down dark and mysterious data mines, in the hope that tight control over it will yield some form of competitive advantage, game changing insurers will actively share it with customers and use it to extract information and insight that customers value. Transparency will be at the heart of this new engagement with customers. It will be a more personal engagement, tailored to the particular needs and preferences of customers, who will have given it their consent in return for a clear exchange of value.
Is it too much to think of a Twitter or Facebook of the insurance world emerging over the next five years? I think not.
Insurance will come closer to customers, like an virtual passenger in the car, or a virtual nurse at home. Customers will allow that closeness to develop if they feel confident that it will be helpful for them. Declarations that confer open ended rights to insurers will go out the window, to be replaced with clear levels of agreed consent. Gone will be annual renewals that look more like legal documents than inviting offers. In their place could be online dashboards highlighting key aspects of your driving performance over the past few weeks, with plenty of drill down options to find out more. Or online health profiles highlighting the implications of your recent exercise regime or festive blowout.
That closer relationship between insurer and customer will come to rely on an openness that the sector has never experienced before. The game changing insurer will recognise that to deliver that openness, it will need to develop not just new ways of thinking, but new ways of behaving with customers. Ethics and insurance will never be more reliant upon each other than they need to be in this new world of insurance.