The journey from products to customer-centricity
The experience of using digital services has changed consumer expectations beyond recognition. Digitalisation puts the customer at the centre of a service proposition – whether that’s in retail - eg Amazon - , entertainment - eg Netflix - or a host of other consumer services like PayPal, Uber, Spotify and so on. Consumers expect the companies they use to ‘know’ them. They want offers that are built around their specific needs and past behaviour. They demand relevant and tailored information. Such customer-centricity is a hallmark of success in the digital era. But it’s an approach that, to date, is in considerable contrast to most insurance companies.
For many years insurers – in the Nordics and elsewhere - have thought and operated as product-centric organizations. Sales, service and claims have all been based on one-size-fits-all products. However, as we move into the digital age, customer-centricity has become a top strategic priority for many CEOs. Compared to other industries, Nordic insurance providers have a long way to go, but some have started on the journey. Our recent discussions with senior executives show a widespread acknowledgement of the industry’s relatively late focus on customer-centricity as well as the criticality of digitalization initiatives that will underpin any customer-driven transformation.
Accelerating the digitalization journey is important because most customers have already experienced – and warmly welcomed – the customer-centricity provided by other industries. Nordic insurance companies that want to generate the same customer ‘delight’ need to address a number of inter-related elements of their organization, taking in customers, products and channels. A single, 360-degree view of every customer is fundamental. Insurance companies that are beginning to embrace customer-centricity are starting to see the rewards of shifting from selling products to providing solutions based on a connected view of a customer’s needs - across the range of insurance services. That also requires integrated digital channels – social, mobile and cloud - so that whatever the point of contact, or the means of communication, all agents have a single view of a customer’s history and can provide joined up service and advice.
While digital technology is a key enabler of customer-centricity, it’s by no means the whole story. For example, our discussions with the CEO of a P&C insurer highlighted that while they had made considerable progress in using analytics to uncover customer insights from contact histories and social media, they had struggled to act on those insights. Problems often arise because the new initiatives lack the attention and resources to become part of business as usual. Momentum towards greater customer-centricity can quickly dwindle. Accenture’s experience suggests that there are some key steps that Nordic insurers should address to help secure lasting impacts from their good intentions towards transforming their organizations into customer-centric and digitally enabled businesses. ◾First, it’s important for senior executives to develop and articulate a compelling vision that can secure strong buy-in from the whole organization. ◾Second, make sure that the changes are anchored in the organization, progress reported and momentum maintained to avoid slipping back into ‘”the way we’ve always done things”. ◾Third, commit to and invest in the resources, processes and systems to support the new operating model that will deliver customer value. ◾Finally, have patience. While there will be quick-wins along the way, the benefits of increased customer satisfaction and loyalty won’t come overnight.
This is a journey for the long-term. But if the Nordic insurance industry is going to close the gap between customer expectations and current offerings, it’s a journey that they have to embark on. As they do, they should look to the lessons that first-movers offer and incorporate them into their own transformation towards a digitally enabled, customer-centric future. Many have already started. Those that have not, need to begin. There’s no time to lose.