This document discusses how insurers can become more customer-centric in order to meet evolving consumer demands and expectations. It outlines three essential steps insurers need to take: 1) Develop customer-centric operating models focused on understanding customer needs; 2) Apply advanced data analytics and segmentation to improve the customer experience; and 3) Harness digital technologies as part of an integrated channel strategy. The journey to becoming truly customer-centric will be challenging and require significant cultural shifts within insurers, but taking these steps can help insurers strengthen customer relationships, drive growth, and gain competitive advantages.
Digital Transformation In The Hotel IndustryScopernia
Presentation for the GM's of Benelux Accor hotels in Amsterdam. How recognise the patterns of disruption and develop your own plan to understand and deal with transformation.
The power of brand storytelling [research]Headstream
Whilst brand storytelling is certainly alive and well, and increasingly being used by brands as a marketing activity, a Google search quickly reveals how many different definitions there are on the subject.
We therefore commissioned this in-depth research to gain a better understanding of what brand storytelling means from a consumer's perspective.
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The Creative Brief frames the strategy and positioning so your Agency can creatively express the brand promise through communication.
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Digital Transformation In The Hotel IndustryScopernia
Presentation for the GM's of Benelux Accor hotels in Amsterdam. How recognise the patterns of disruption and develop your own plan to understand and deal with transformation.
The power of brand storytelling [research]Headstream
Whilst brand storytelling is certainly alive and well, and increasingly being used by brands as a marketing activity, a Google search quickly reveals how many different definitions there are on the subject.
We therefore commissioned this in-depth research to gain a better understanding of what brand storytelling means from a consumer's perspective.
What's branding? How's to differentiate branding and marketing? Will branding trend change over time? And what's the newest branding trend for now? Hope this slide could help. Contact me at diniprathivii@gmail.com to get the copy.
The Creative Brief frames the strategy and positioning so your Agency can creatively express the brand promise through communication.
1, Marketing Execution must impact the brand’s consumers in a way that puts your brand in a stronger business position. The Creative Brief is the bridge between the brand strategy and the execution.
2. Through our Brand Positioning workshop, you will have all the homework on the brand needed to set up the transformation into a succinct 1-page Creative Brief that will focus, inspire and challenge a creative team to make great work.
3. The hands-on Creative Brief workshop explores best in class methods for writing the brief’s objective, target market, consumer insights, main message stimulus and the desired consumer response.
4. Brand Leaders walk away from the session with a ready-to-execute Creative Brief.
Booking.com - Data science and experimentation at Booking.com: a data-driven ...BigDataExpo
At Booking.com we have experienced what a data driven organisation means for creating business impact. And what looks it like, when experimentation is part of your company culture.
During this session we will share our experiences and learnings on how data science and experimentation go hand in go.
[Eng] The use of consumer insight in Advertising: from classic Advertising to...giulio bonini
This is the English version of my thesis in Advertising.
I point out the role of consumer research in creating advertising and marketing communication.
I give a definition of consumer insight, its 4 properties and applications in many media.
Found out how the Asian-based hotel group with over 65 properties, Shangri-La Hotels & Resorts, got travelers to rethink about their entire decision-marking process.
Brad Anderson Creates Brand and Marketing Strategy Essentials TemplateBrad Anderson Creates
The BA|CREATES FREE Brand & Marketing Strategy Essentials Template gives you the KEY to CONNECTING to clients EFFICIENTLY and EFFECTIVELY.
It demonstrates the proven formula of articulating your brand identity and your target audience and shows the essential pathways connecting the two effectively and efficiently.
Discover the business and marketing tools that are essential to creating a lasting impression, create a competitive advantage and a strong brand identity.
Be seen, be liked, be engaged - it all comes down to CONNECTION.
60 Minute Brand Strategist: Extended and updated hard cover NOW available.Idris Mootee
This book includes the very latest thinking on branding and brand strategy. It has been published in different many languages and use by top global brands to train their brand managers. New updated hard cover version is not available from Amazon May 2013
Pls view in full screen mode. Published in more than 5 languages.
Workshop for Brand Leaders to help define your brand positioning statement, brand concept and organizing big idea.
https://beloved-brands.com/brand-positioning/
In the new Digital economy where Customers are demanding personalised, transparent & seamless customer journeys over multiple digital devices as standard
Are Insurance companies prepared?
What are the key forces driving change in the retail sector?
Where does the opportunity with the consumer lie?
In our Retail Showcase, we share with you our vision of what it takes to win in retail today.
Booking.com - Data science and experimentation at Booking.com: a data-driven ...BigDataExpo
At Booking.com we have experienced what a data driven organisation means for creating business impact. And what looks it like, when experimentation is part of your company culture.
During this session we will share our experiences and learnings on how data science and experimentation go hand in go.
[Eng] The use of consumer insight in Advertising: from classic Advertising to...giulio bonini
This is the English version of my thesis in Advertising.
I point out the role of consumer research in creating advertising and marketing communication.
I give a definition of consumer insight, its 4 properties and applications in many media.
Found out how the Asian-based hotel group with over 65 properties, Shangri-La Hotels & Resorts, got travelers to rethink about their entire decision-marking process.
Brad Anderson Creates Brand and Marketing Strategy Essentials TemplateBrad Anderson Creates
The BA|CREATES FREE Brand & Marketing Strategy Essentials Template gives you the KEY to CONNECTING to clients EFFICIENTLY and EFFECTIVELY.
It demonstrates the proven formula of articulating your brand identity and your target audience and shows the essential pathways connecting the two effectively and efficiently.
Discover the business and marketing tools that are essential to creating a lasting impression, create a competitive advantage and a strong brand identity.
Be seen, be liked, be engaged - it all comes down to CONNECTION.
60 Minute Brand Strategist: Extended and updated hard cover NOW available.Idris Mootee
This book includes the very latest thinking on branding and brand strategy. It has been published in different many languages and use by top global brands to train their brand managers. New updated hard cover version is not available from Amazon May 2013
Pls view in full screen mode. Published in more than 5 languages.
Workshop for Brand Leaders to help define your brand positioning statement, brand concept and organizing big idea.
https://beloved-brands.com/brand-positioning/
In the new Digital economy where Customers are demanding personalised, transparent & seamless customer journeys over multiple digital devices as standard
Are Insurance companies prepared?
What are the key forces driving change in the retail sector?
Where does the opportunity with the consumer lie?
In our Retail Showcase, we share with you our vision of what it takes to win in retail today.
Digital Marketing in Banking: Evolution and RevolutionCognizant
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UK marketing executives are keen to explore the possibilities of marketing in context, but encouraging customers to share contextual information is the key challenge.
"If one word could sum up the focus of insurers in 2015, it is ‘technology.’ With the return of stable economic conditions, it makes sense for insurance companies to invest in digital solutions that widen margins and provide competitive differentiation."
Shaun Crawford, Global Insurance Leader
Accenture Distribution and Agency Management Survey: Reimagining insurance di...Accenture Insurance
The global Distribution & Agency Management Survey draws insights from 400+ insurance distribution executives about connected devices, data and analytics, agent compensation and more. The research covers topics such as the customer experience, channel optimization, the changing role of agents and the Internet of Things, among others and how digital is affecting insurance distribution and customer interactions.
Going Digital: The Banking Transformation Road MapSemalytix
The leaders in digital banking are more client-centric, tech-savvy, and inclusive—and are fundamentally changing to deliver the best results.
Most banks today want to become digital banking leaders—after all, that's where the customers are. And for much of the past decade as digital banking has taken hold, most leading traditional banks have incorporated strong digital strategies.
So what separates the digital banking leaders from the laggards? A new A.T. Kearney study on digitization, in conjunction with Efma, seeks the answer and finds three main findings: the leaders understand the importance of mobile in a digital strategy, they are developing more agile operating models, and, most notably, they have tackled the need for internal culture shifts (see sidebar: About the Study).
With top-down implementation, these leaders have set their paths toward becoming more client-centric, more tech-savvy, and more inclusive. As the market evolves even more rapidly through the end of the decade, all banks will have to adapt to a disruptive model in people and IT—the two engines of retail banking—and must fundamentally adapt to deliver the best results.
This paper looks at the trends and the path forward.
The Evolving Digital Journey
Most banks began their digital journey years ago and have clear digital strategies, yet even those are facing major changes. In particular, as more customers use their mobile phones and tablets to do their banking, and omnichannel takes hold in financial services, the mobile experience is becoming a crucial aspect of digital strategy that banks must address.
Secondly, to keep up in this fast-changing market, traditional banks will have to adapt their operating models. In particular, changes in IT, new products and services development, and changing expectations for time-to-market will be key factors going forward.
Perhaps the most important step, however, is that banking in the digital age requires a drastic, profound reset of how banking staff reacts to customer needs. This means thinking customer first, rather than by channel; as one panelist puts it, "Banks think in channels, but customers don't." It means being conscious that small digital players can gain market share faster and in a manner that is more disruptive to traditional banks' models. It means understanding that organizational silos pose significant obstacles to creating new solutions for customers. Most importantly, it means looking inward, changing organizational beliefs and habits to facilitate clients and drive digital innovation.
A new spirit of banking—led by top executives—will lead the way to addressing market changes, becoming more agile, and improving openness in day-to-day business.
- See more at: http://www.atkearney.com/latest-article/-/asset_publisher/lON5IOfbQl6C/content/going-digital-the-banking-transformation-road-map/10192?_101_INSTANCE_lON5IOfbQl6C_redirect=#sthash.oKsJGij3.dpuf
The Impact of Artificial Intelligence on Modern Society.pdfssuser3e63fc
Just a game Assignment 3
1. What has made Louis Vuitton's business model successful in the Japanese luxury market?
2. What are the opportunities and challenges for Louis Vuitton in Japan?
3. What are the specifics of the Japanese fashion luxury market?
4. How did Louis Vuitton enter into the Japanese market originally? What were the other entry strategies it adopted later to strengthen its presence?
5. Will Louis Vuitton have any new challenges arise due to the global financial crisis? How does it overcome the new challenges?Assignment 3
1. What has made Louis Vuitton's business model successful in the Japanese luxury market?
2. What are the opportunities and challenges for Louis Vuitton in Japan?
3. What are the specifics of the Japanese fashion luxury market?
4. How did Louis Vuitton enter into the Japanese market originally? What were the other entry strategies it adopted later to strengthen its presence?
5. Will Louis Vuitton have any new challenges arise due to the global financial crisis? How does it overcome the new challenges?Assignment 3
1. What has made Louis Vuitton's business model successful in the Japanese luxury market?
2. What are the opportunities and challenges for Louis Vuitton in Japan?
3. What are the specifics of the Japanese fashion luxury market?
4. How did Louis Vuitton enter into the Japanese market originally? What were the other entry strategies it adopted later to strengthen its presence?
5. Will Louis Vuitton have any new challenges arise due to the global financial crisis? How does it overcome the new challenges?
NIDM (National Institute Of Digital Marketing) Bangalore Is One Of The Leading & best Digital Marketing Institute In Bangalore, India And We Have Brand Value For The Quality Of Education Which We Provide.
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This comprehensive program covers essential aspects of performance marketing, growth strategies, and tactics, such as search engine optimization (SEO), pay-per-click (PPC) advertising, content marketing, social media marketing, and more
3. The journey toward greater customer centricity 3
01 Executive summary
03 Introduction: evolving consumer dynamics
• Consumer demands and expectations
• Influencing persistency and retention
• Insurers are not meeting customers’ expectations
05 Core principles for redefining customer relationships
07 Protecting the core: becoming more customer-focused
• Customer-centric models
• Data for competitive advantage: advanced segmentation and data analytics
• Harnessing the power of digital as part of an integrated channel strategy
15 Customer-centric innovation
• A significant cultural shift
• Develop a culture of innovation
16 Practical steps on the journey
19 Conclusion
Contents
4. Ernst & Young4
Advances in technology and communication,
combined with the explosive growth in data
and information, have given rise to a more
empowered global consumer.
5. The journey toward greater customer centricity 1
Executive summary
Advances in technology and communication, combined with the
explosive growth in data and information, have given rise to
a more empowered global consumer. Recent economic and political
events highlight the need for insurers to understand how consumers
view the world and the most important attributes for their
purchasing decisions.
Our discussions with global insurance executives, non-executive
directors and regulators corroborate this view and demonstrate,
without exception, that the challenge of responding effectively to
rapidly changing consumer needs is one of the top strategic agenda
items, alongside regulatory change and talent management.
In our Ernst & Young Global Consumer Insurance Survey 2012
report, Voice of the customer,1
we learned about the value of
customer centricity and why it is so important to an insurer. Our
survey probed customer attitudes and behaviors to determine
how customers view and interact with the industry, as well as their
expectations for the future. Our findings confirmed that those
insurers who respond best to what customers want now are most
likely to succeed. A clear understanding of customer needs and
behaviors across the organization will help drive profitable growth
strategies and provide the confidence to invest in opportunities at a
time when staying within budget is extremely difficult.
In this paper, we explore how technology is changing consumer
dynamics and show how insurers have an opportunity to influence
persistency, retention and expectations through improved
customer engagement. We discuss the strategic paradigm and
operational areas where insurers can become more customer-
focused: developing customer-centric models, applying advanced
segmentation and data analytics to design an effective customer
experience, harnessing the power of digital in an integrated channel
strategy, and shifting to a new culture of innovation that will drive
growth and competitive advantage.
The journey to customer centricity will not be an easy endeavor.
In building a strong foundation for the future, insurers will need to
focus on a new set of core principles to redefine relationships. There
will be many challenges in developing the critical new capabilities
that align objectives, targets, rewards and recognition with
customer needs.
We offer practical steps for insurers to consider along the way
as they build momentum for customer centricity across their
organizations. Some of the topics will be presented in greater detail
in the months ahead. Look for a discussion of how insurers can
harness digital more effectively in an upcoming 2013 report.
In this paper, we explore how technology
is changing consumer dynamics and
show how insurers have an opportunity
to influence persistency, retention and
expectations through improved
customer engagement.
1. Voice of the customer: time to rethink your relationships, Ernst & Young. Download at www.ey.com/insurance.
7. The journey toward greater customer centricity 3
Introduction: evolving consumer dynamics
Technology is growing at an exponential rate, influencing consumer
behavior and insurance marketing strategies. By 2020, 80% of
the global population will have access to mobile telephony and
more than 60% to smartphones or low-cost tablet computers. It is
anticipated there will be more than 50 billion connected devices
globally, with mobile being the primary internet device for
most individuals.
Social media and unprecedented access to information, such as
peer-to-peer product and service reviews, are giving greater power
to consumers, creating more informed and demanding customers.
These experiences are shaping consumer expectations across all
sectors, including insurance.
Consumer demands and expectations
Although technology is changing the way customers engage with
insurers, our survey indicates that personal interaction is still highly
regarded. The complex nature of insurance products and customers’
need for advice mean that some level of personal interaction will
remain an important component of overall channel strategy.
Customers prefer products to be simpler and more transparent, so
it is easier to make informed choices. This has implications for the
role of insurance agents. In an industry where margins are coming
under increasing pressure, insurers need to choose where they
invest across the value chain to avoid adding extra cost while still
paying agents for services customers may prefer to do themselves.
These changes are forcing a dramatic change in the business
operating model, as insurers need to focus on where their sales
channels add value to the end customer. This will be helped by
greater transparency in the sales process and in product design.
Overall, customers are looking for value to be clearly demonstrated,
reflecting a balance of price, product features and service tailored
to their needs. They prefer to buy more products from companies
they trust. Once they have made their choice and established a
relationship with an insurance provider, they expect the provider’s
products and services to meet their expectations — and through
their channel of choice.
More demanding
Increased expectations:
convenience, flexibility and
personalization are a given
More diverse
Global growth of women
in the workforce
More sophisticated
Emerging middle classes want
more financial services
More hedonistic
It’s all about me
8. Ernst & Young4
Influencing persistency and retention
Recognizing the value of the customer relationship is vital — at
the point of initial sale and over the customer lifetime. Customer
segmentation models, which identify those who have the highest
propensity to purchase, can improve customer satisfaction,
compared to traditional unfocused “product push” cross-sell efforts.
Insurers also have an opportunity to influence persistency and
support retention through improved engagement with existing
customers. This must be backed by flexibly designed products that
respond to changing customer needs and financial incentives to
reward customer loyalty — over the customer life cycle rather than
just at the point of lapse.
But the key to improving persistency is removing the reasons why
customers consider leaving in the first place. Use of predictive
models can target customers based on likelihood of lapse and the
value of retention, but “test and learn” approaches are essential to
determine which interventions are most effective.
Customers are willing to build long-term relationships with their
providers and purchase multiple products. However, insurers must
improve the effectiveness of their communications, as well as
recognize and reward the value of the relationships.
Insurers are not meeting customers’ expectations
Our Voice of the customer survey indicates four dimensions where
insurers are failing to meet customers’ expectations: service quality,
rewarding loyalty, communication and product transparency.
Consumers have a strong sense that insurers could do more to earn
their trust. They tend to judge insurers against other consumer
industries, expecting comparable standards of service and
rewards for loyalty. Yet, in our client experience, insurers typically
benchmark themselves against their peers in the industry. That’s
a big disconnect. Insurers need to continually evolve customer
propositions to meet changing needs and expectations, particularly
by improving information and transparency, and they need to look
outside the industry to do this effectively.
The need for clarity and transparency is also driven by regulators
protecting consumer interests more than ever before. Insurers that
align themselves to a customer-centric model of operation will find
the transition to the new regulatory environment less painful, and
they may even gain a competitive advantage.
Customers are willing to build long-term
relationships with their providers and
purchase multiple products. However,
insurers must improve the effectiveness of
their communications, as well as recognize
and reward the value of the relationships.
9. The journey toward greater customer centricity 5
In this fast-changing environment, insurers need to focus on
a new set of core principles to redefine relationships with
customers and transform business models. To achieve this
new strategic paradigm — and the first step on the journey to
customer centricity — insurers need to take the following steps.
Protect business against disintermediation: Insurers unable to
understand or deliver against current and future consumer needs
and preferences face the prospect of losing the connection with or
being pushed further away from the end customer. Insurers need
to make sure they retain a strong influence on how customers view
their products and services, regardless of overall channel strategy.
Redefine customer relationships: Insurance has traditionally been
a product-centric business, focused on developing the best products
for a given risk and delivering those in the most cost-effective
manner. Now insurers need to better understand the true needs of
their customers in order to redefine the products and services they
offer and the ways in which they interact and serve them. They need
to know their customers better than ever and use the information
and knowledge as a source of competitive advantage.
Increase productivity to gain a competitive advantage:
Historically, productivity improvements were viewed as a response
to adverse market conditions. Insurers typically curtail spending in
times of shrinking revenue or increasing cost pressures. However,
those insurers who are able to view productivity enhancements
with the dual lens of improving the expense position while growing
the top line will achieve a competitive advantage. As consumer
expectations for better levels of customer service grow, insurers
will need to navigate the challenges imposed by large-scale,
paper-based legacy systems. Those carriers that are able to
increase productivity through streamlined business processes and
technology improvements will be able to enhance their expense
positions and increase the quality of their customer service.
Diversify sources of revenue: Insurance by nature is cyclical.
Non-life insurers face hard and soft pricing cycles, while life and
pension sales and profit performance are affected by interest rate
movements and equity market volatility. Insurers need to diversify
to sustain stable top-line growth and earning fluctuations. This
also affects customer centricity, as it recognizes that product
performance and consumer needs shift with market conditions and
life events.
Collaborate with new partners across the value chain: The
shift from pushing products to delivering solutions often requires
insurers to develop new capabilities or provide products outside
the current portfolio. In addition, the adoption of new technologies
(SOA, web services, etc.) is opening opportunities to outsource
non-strategic functions to improve the efficiency and effectiveness
of business functions across the value chain. Successful insurers will
be those that develop capabilities to identify and manage strategic
business partnerships.
By focusing on these core principles, insurers can build a strong
foundation for the future while improving top-line growth and
profitability over the near term. To truly succeed, they must
embrace and embed the concept of innovation within their
organizations. Future industry winners will be nimble and able to
respond quickly and effectively to changing market conditions, new
consumer demands and emerging regulations.
Core principles for redefining
customer relationships
10. Ernst & Young6
The challenge is how to transition
from existing product and traditional
distribution models to those that
deliver what customers want.
11. The journey toward greater customer centricity 7
With these core strategies in place, the focus can shift to operational
issues that will enable change. Insurance companies can drive
growth in revenue and profit by improving their businesses,
attracting customers and strengthening relationships. However,
implementation is not easy, particularly where insurers have
extensive legacy systems and operations. The challenge is how to
transition from existing product and traditional distribution models
to those that deliver what customers want, as well as how to develop
the critical new capabilities to enable this transformation.
We believe there are three essential steps along the journey to
customer centricity. Insurers need to focus on customer-centric
operating models, advanced segmentation and data analytics, and
harnessing digital to better engage with customers at a lower cost.
Customer–centric operating models
A customer-centric organization builds an operating model around
a deep understanding of its customers, what they value and the
contribution each makes to the profitability of the company.
This requires:
• Designing business processes that recognize different customer
segment needs
• Delivering a positive and seamless customer experience at
every touch point across the customer life cycle
• Maintaining an active dialogue with customers (and acting
on feedback)
• Fostering a culture that places the customer at the heart of the
decision-making process
Maturity model assessment
Assessing an organization against a customer-centric maturity
model may provide a better understanding of the relative
maturity of key capabilities such as segmentation or lifetime value
management, as well as offer guidance on where to invest. Through
our work with clients, we have a clear view of what constitutes
different stages of maturity, from undeveloped to leading practice.
Protecting the core: becoming more
customer-focused
Figure 1: Compares how four major global insurers are currently
positioned in the five stages of development. Defining and
understanding what it means to be “emerging” versus “advanced”
can be a process in itself, even before mapping your company
against these criteria.
Indeed, understanding and communicating the scale of the
challenge ahead is the first step of any journey. It is important to
be realistic about expectations — leading customer centricity (the
far right of the maturity model) may be unattainable. However, the
process of considering how to balance customer-centric principles
with financial considerations is critical. For some, the trade-offs
between the level of investment required and realized benefits will
determine how far they progress.
The journey to deliver a mature operating model may take years.
Such a significant organizational transformation must be broken
down into a manageable, phased implementation. Focusing on
quick wins, key technology decisions and targeted improvements
initially can help to prove the case and garner organizational
buy-in. Prioritizing “high touch, low tech” changes that improve
the customer experience relative to the cost and implementation
effort will further generate momentum for more extensive
technology-enabled change.
Barriers to successful transformation
Typically, most insurers will encounter challenges inherent in their
current operating models due to technological and operational
limitations, as well as cultural constraints. Among the more
obvious are strong organizational silos, which create an inability or
unwillingness to share customer data or cooperate across business
units and functions.
This is particularly common in businesses that historically have
been segmented along distribution channels, e.g., intermediary
and direct. In fact, the traditional insurance customer engagement
model presents significant barriers: in many cases, initial customer
contact and ongoing advice are controlled by an intermediary or
agent — and often, provider engagement at this stage is purely
administrative. Legacy systems and processes, and poor quality
or insufficient end-customer data, constrain many organizations
12. Ernst & Young8
Figure 1: Customer–centric maturity model
Brand and
market
positioning
Low brand equity among target
customers — known but not valued
High brand recognition and strong positive associations
among target customers, based on real evidence and
reputation for customer focus
Customer
segmentation
Broad, undifferentiated offering, not
specific to any distinct customer segments
Clearly defined target segments based on robust
understanding of current and potential customer
lifetime value
Distributor
management
Distributor relationships driven by volume,
little or no provider involvement in sale or
post-sale customer activity
Highly selective approach to distributors driven by
customer and distributor profitability; partnership
approach with selected distributors with joined up
customers engagement model
Propositions Broad range of traditional life products:
complex, inflexible, opaque, capital–intensive
with provider-financed commission
Focused product range based on insight into needs
of profitable customer segments; flexible design with
transparent pricing, supporting fee–based advise
and/or customer self-service
Service
delivery
Transactional and admin–driven, reactive to
customer and distributor requests; low-touch
approach with no proactive contact or value
added interaction
Relevant and value-adding customer contact through
variety of media including phone and online self-service
tools and information
Customer
lifetime value
management
No attempt to manage customer lifetime
value beyond standard service model
Explicit understanding of customer lifetime value with
value–adding interventions at key stages including lapse,
life-stage changes, maturity, retirement etc., tailored to
needs and value of specific customer segments
Culture New business volume and market share are
key metrics; enforce those customers not
actively managed or measured
Customer lifetime value management is key metric: clear
focus on meeting needs of profitable customer segments
across their whole life cycle
Process Product push approach; little or no customer
segmentation; products developed ad hoc;
“One size fits all” service footprint
Tailored product offering based on discrete customer
segments; real–time customer insight supports
personalized interactions; predictive analytics employed
to adjust offers and service actions accordingly;
multi-channel approach based on behaviors and
buying preferences
People No ownership of the customer within the
organization; compensation drives
inconsistent behaviors; customer–facing
employees not supported by back office
functions; lack of authority to resolve
customer issues at point of contact
Customer–centric culture pervasive at all levels of the
organization; customer insight is a key component of
the company’s strategic agenda; employees take clear
ownership for customer problems and manage issues
through to resolution
Technology Technology strategy not aligned with
customer–centric culture; legacy systems
limit ability to meet customer requirements;
customer data trapped in organizational
silos; lack of enterprise–wide data strategy
hampers integration
Unified vision for data management across both
enterprise and business partners; master data is
managed as a corporate asset; proactive measures
are in place or ongoing data quality improvements;
the organization embraces customer–facing technologies
as integral to channel effectiveness
Stage 1: Undeveloped Stage 5: Leading
Stage2:EmergingStage3:DevelopingStage4:Advancing
13. The journey toward greater customer centricity 9
in managing the end-to-end customer relationship. Even when
customers are “orphans” (they no longer have an active agent or
intermediary), many organizations do not, or cannot, seize this
opportunity to re-establish a relationship directly with advice and
service offerings.
One of the greatest barriers for insurers is the business case that
often requires substantial investment. Culturally, traditional industry
focus has been on new business and market share, rather than
deriving value from the in-force book. When viewed with a narrow
lens and a short-term focus, many investments do not make it past
the planning stage. The key for insurers is to shift to a longer-term
perspective and to recognize the opportunity to reduce costs while
improving customer centricity.
Executive management ownership and commitment to driving
customer centricity is imperative. This must be supported by clearly
defined customer-centric objectives and metrics across all business
units, with performance management and compensation aligned
with customer-focused behavior.
In setting goals for customer operating model transformation,
insurers need to ask these strategic questions:
• Why do you want to be customer-centric and to what degree?
• Is there a clear strategic imperative from the board of directors?
• How incremental or revolutionary a change is required, and how
much change is the organization prepared to undertake?
• What are the main barriers and key strategic imperatives?
• Where and how will you start — by targeting specific functions or
business units, or with an enterprise-wide phased approach?
Data for competitive advantage: advanced segmentation and
data analytics
Many insurers grasp the concept of segmenting and tailoring their
service propositions. This is often done based on socioeconomic
factors and product holdings. Leading insurers are grouping
customers based on behaviors and values.
Creating a micro-segmentation model to understand customers
and aligning this with a modular distribution model that allows
customers to access the organization through multiple channels
(when and how they prefer) will optimize customers’ experience.
Data analytics has become critical to designing an effective
customer experience. Insurers need to understand the true drivers
of customer satisfaction — for every segment. What attributes of
their experience (price, personal attention, response time, service
calls, claims, etc.) will have the most impact on delivering a positive
experience? Equally, insurers must identify what is not driving
value, as this presents an opportunity to reduce costs.
Stage 1:
Undeveloped
Brand and market positioning
Customer segmentation
Distributor management
Propositions
Service delivery
Customer lifetime value management
Culture
Stage 2:
Emerging
Stage 3:
Developing
Stage 4:
Advancing
Stage 5:
Leading
Company 2
Company 1
Company 3
Company 4
Figure 2: Customer centricity maturity assessment of four global insurers
15. The journey toward greater customer centricity 11
online tools and calculators, combined with customer account
information, can enable call center representatives to deliver
personalized advice and service.
Data analytics and predictive modeling capabilities can also be
applied in other ways within an organization:
• Behavioral engineering models to unpack the existing risk
culture and its implications, as part of a transition to a more
customer-centric and innovative culture
• Customer retention analysis — why, where and when you are
losing customers
• Customer leads analysis to support development of a fully
integrated distribution model
• Financial modeling (of staff and/or customer base) to inform
customer experience and advisor conversations on how to
improve financial client well-being
• Claims management and leakage analysis
Harnessing the power of digital as part of an integrated
channel strategy
Most consumers want access to a mix of online and personal contact
throughout the product life cycle. Digital is not the panacea, but it
is a critical enabler to delivering the experience customers want.
The key insurance challenge is how to harness the power of digital
to better engage directly with customers and lower costs. Digital
technology will complicate the process and frustrate customers if
it is not joined seamlessly with other channels, recognizing that
existing channels or access points will also need to adapt and, in
some cases, play an alternative role within the business.
The effective integration of channels across sales and service
activities is critical to delivering a positive, brand-reinforcing
customer experience at every touch point in the customer
Applying data analytics to the customer
service front line can be powerful. Analysis
of call center transactions, combined with
customer behavioral insight, can help
insurers better route customers to the
appropriate type of support.
relationship life cycle. As digital channels continue to grow in
importance, insurers need to define a strategy for integrating these
touch points as part of their overall distribution infrastructure.
Insurers should focus on two critical enablers. For those utilizing
third-party channels, engaging channel partners early in the
process and communicating a clear value proposition are essential
to successful integration. This could be in the form of leads
generated through digital channels or time-saving customer service
activities handled by the call center. Second, it is imperative that
customer information be handed off between channels with
limited consumer effort. In addition to slowing response times,
redundant steps communicate that the needs of the customer are
secondary to investments in capabilities required to streamline
business processes.
17. The journey toward greater customer centricity 13
Call centers will continue to play a critical role through the life cycle
and must be adapted within the business to respond to evolving
trends and drive greater value at lower cost. Currently, call centers
operate in a telephone-dominated world with little data integration
between other channels, and they are viewed as an expensive
mechanism to service basic customer queries. Additionally, call
handlers are not always equipped with the right skill sets and tools
to support a multichannel offering.
Launching digital channels for many insurers with an agency-based
distribution model is an enormous challenge, requiring changes to
agent segmentation, customer management and communication
protocols, training, incentives and rewards. Agents will need to
become more technologically savvy and connected, as they will
be positioned on the front line to supply the unstructured but rich
customer data required.
An agency force with the “listening” capabilities and agility to
play this role can become a key strategic asset. Agents who were
primarily producing sales volume may soon be more focused on
information collection and relationship management. They will
produce leads to the digital channels and, in turn, receive them
from online browsers as customers ask to speak with an agent.
Call centers will continue to play a critical
role through the life cycle and must be
adapted within the business to respond
to evolving trends and drive greater
value at lower cost.
18. Ernst & Young14
Embedding innovation throughout
the organization will involve tapping into
external discovery centers and industry
research labs to regularly gain insights
from other sectors.
19. The journey toward greater customer centricity 15
These activities will only provide insurers with the ability to catch up
to the leading competitors and to “protect the core.” To genuinely
leapfrog the competition and generate significant growth, a new
culture of innovation is required, along with a significant change in
approach to strategic decision-making.
Embedding innovation throughout the organization will involve
tapping into external discovery centers and industry resesarch labs
to regularly gain insights from other sectors. It will also require
introducing internal test-and-learn processes that generate ideas,
test their feasibility and pilot initiatives in a rapid and agile manner.
A significant cultural shift
For many insurers, this represents a substantive and significant
cultural shift. The risk-averse nature of most insurers is a key
inhibitor to innovative thinking and stifles the experimental launch
of new products, processes and other business changes. The
required change in culture must be driven from the top down.
Senior management must instill and clearly communicate a
corporate strategy focused on customer-centric innovation and
recognize and reward efforts to deliver this. Collaboration and
empowerment of employees to spot customer improvements
and act upon them must become the new norm, as well as
physical spaces such as innovation centers to help develop and
incubate ideas.
One of the most significant cultural changes will be a shift from
short-to long-term strategic decision-making. The traditional
industry focus (and one that is embedded in most performance
management and compensation systems) has been around new
business and market share rather than deriving value from the
in-force book. This often means it is difficult for customer
proponents within an organization to secure investment in
enabling capabilities such as data analytics or long-term customer
relationship-building activities, as these may not present the most
compelling short-term revenue-generating business cases.
Customer-centric innovation
A change in mindset is required. Rather than the traditional
“what will I get?” question, organizations need to consider “what
is the opportunity cost of not doing this?” in terms of financials,
competitive positioning and customer experience.
Above and beyond customer-centric innovation, some players are
thinking more disruptively, developing radical new customer value
propositions that move beyond the traditional confines of insurance
and address customer demands in other industries. This requires
new business models and competencies but can generate significant
revenue streams by tapping into new profit pools. There are unique
opportunities to enter other industries, often by establishing
alliances and collaborating with new partners.
Develop a culture of innovation
Three stages of innovation are depicted in Figure 5 across the
dimensions of business models and competencies. Protecting the
core is about getting the basics right, becoming more customer-
centric and, where appropriate, adopting the leading practices
that competitors or other industries have demonstrated. However,
this relies on largely existing competencies and business models
and could be a catch-up strategy. Only genuine customer-centric
innovation that is embedded into the organization will produce
significant growth and deliver competitive advantage.
CompetenciesCurrentNew
Business models
Insurance
as a service
and hybrid
models
Customer–
centric
innovation
Significant
growth
Protecting the c
orebusiness
Disrupt
ive
growth
Current New
Figure 5: The stages of innovation across competencies and
business models
20. Ernst & Young16
Practical steps on the journey
Define your target customers
and their needs
Take a realistic look at your
propositions (solutions, not
products) — what will it take
to deliver what customers
want at a price they want to
pay and still make money?
Generate customer
engagement across their
life cycle — this is vital to
building loyalty
Involve distributors and,
together, build stronger
partnerships
The journey to customer centricity will not be easy. We offer these
practical steps to help you understand the process and guide you
along the way.
Involve
Generate
Define
Take
21. The journey toward greater customer centricity 17
Learn to be adaptive — use
detailed customer insight
to test, learn and act
quickly, accelerating the
process with prototypes
Start to build a culture
that puts the customer
at the center and aligns
objectives, targets, rewards
and recognition with
customer needs
Focus on some key levers
and build momentum
throughout the organization
Focus
Learn
Start
22. Ernst & Young18
Many insurers are not keeping pace with
changing market and consumer dynamics
and are far behind other industries in
meeting customer expectations.
23. The journey toward greater customer centricity 19
Many insurers are not keeping pace with changing market and
consumer dynamics and are far behind other industries in
meeting customer expectations. To succeed in this fast-changing
environment and achieve sustainable top-line growth, insurers
need to focus on redefining customer relationships, transforming
business models to embrace data and digital and introducing an
innovative culture in support of strategic decision-making.
Achieving customer centricity is less about implementing a grand
vision than about building cadence today, next week, next month
and next year. But the time has come when the journey is a
strategic necessity, and all insurers need to be clear about where
they stand and what steps lay ahead for them.
Conclusion