Transforming Insurance Distribution in the Post-COVID-19 Era: Embracing a Digitally Enabled Hybrid Model
The COVID-19 outbreak has brought about unprecedented disruptions to the insurance industry, particularly impacting the traditional agency channel. As face-to-face interactions became unfeasible, insurers were compelled to seek alternative distribution models. While physical distancing measures are gradually easing, it is evident that the pandemic’s effects on the insurance landscape will persist. To thrive in this new reality, insurers in Asia must embrace a digitally enabled hybrid model that combines the strengths of agents with comprehensive digital capabilities, enabling seamless interactions with customers across multiple channels. This article explores the imperatives for insurers to successfully build and implement such a model.
Creating a Seamless Omnichannel Journey with Contextual Memory
To meet the evolving expectations of Asian customers, insurers need to provide a seamless omnichannel experience. Customers now anticipate the same level of convenience and personalization they enjoy in other areas of their lives, thanks to the integration of e-commerce and physical outlets. Insurers can start by identifying key touchpoints in the customer journey, leveraging customer personas and contextual targeting to deliver tailored experiences across online and offline channels. Crucially, information handover between agents and digital channels should occur seamlessly to avoid redundant data requests.
Building Affinity-Building Products
In an era where customer acquisition costs are high, insurers can explore partnerships with digital platforms to tap into new customer segments. For instance, a prominent Southeast Asian insurer collaborated with a ride-hailing start-up to introduce micro-insurance exclusively for drivers, providing critical-illness protection on a pay-per-trip basis. By forging such partnerships, insurers can acquire customers more efficiently while addressing specific needs within target demographics.
Tailoring Offerings to Life Moments
Many customers perceive agents as relentlessly focused on selling products rather than understanding their unique circumstances. Insurers can bridge this gap by empowering agents with tools and capabilities that support continuous engagement. Customer portals and other digital tools can assist agents in identifying critical life moments, initiating relevant insurance conversations at the right time. By prioritizing personalized advice and planning, insurers can cater to the increasing sophistication and wealth of Asian consumers.
**Personalizing Advice and Planning**
As consumers in Asia become wealthier, they seek agents who possess expertise in areas such as retirement planning and investments. Insurers should adapt their financial-planning approach to the Asian context, where customers desire flexibility and have limited awareness of available options. Engaging customers in discussions about their aspirations before collecting data can foster trust. Interactive tools embedded in sales tablets facilitate these conversations, allowing agents to map out aspirations and future priorities. Additionally, insurers can leverage remote advisory capabilities and AI-enabled coaching to enhance customer-agent interactions.
Reinventing the Agent Value Proposition
The conventional agency model in many Asian countries faces challenges, including stagnant growth and new-agent attrition. To ensure sustainable success, insurers must transition agents from being mere salespersons to becoming financial advisors. This shift necessitates a revision of the compensation model. Insurers should reward agents not only for customer acquisition but also for providing quality advice. Incorporating fixed salaries and activity-based bonuses alongside commissions and overrides incentivizes agents to develop deep, enduring customer relationships.
Providing Modularized Products with Value-Added Services
Tech players have redefined integration by incorporating solutions into consumers’ lives, promoting engagement. Similarly, insurers can reimagine product development to position themselves as partners in customers’ well-being and wealth accumulation journeys. By delivering customer-centric, proposition-led solutions that integrate insurance products with value-added services, insurers can address diverse customer needs. For example, an insurer collaborated with a wellness partner to offer a critical-illness product for breast cancer, integrating healthcare services such as preventive care, diagnosis, and recovery support.
Enhancing Data Flow and Analytics
less customer journeys require the free flow of data and analytics across touchpoints. Insurers and agents should facilitate the exchange of data to ensure a seamless experience for customers, enabling them to resume interactions effortlessly. Moreover, insurers should prioritize analytics use cases throughout the customer journey, leveraging customer data from various sources to personalize content and facilitate cross-selling.
Adopting an Agile Way of Working
Rapid innovation and response to new trends, regulations, and technologies demand an agile working approach. Insurers should move away from siloed, large-scale developments and transition to co-located, cross-functional teams employing a flexible, test-and-learn methodology. Agile ways of working involve short iterations (sprints) with tangible results and a continuous improvement focus.
In conclusion, insurers must proactively plan for recovery from the pandemic and embrace a new distribution operating model. Remote support for agents, improved customer engagement, and the adoption of digital tools are pivotal to successfully implementing the digitally enabled hybrid model. By doing so, insurers can emerge from the crisis better prepared to cater to their customers’ needs in the post-COVID-19 world.