How to build value into life insurance
The life and health insurance industry needs to “tell a story, find the need and the moment of truth”
The life and health insurance industry needs to “tell a story, find the need and the moment of truth” in order to more effectively innovate and connect with customers.
This was one of the key messages from Eoin Lyons, CEO of UK-headquartered technology and administration services provider, OPAL, at the Life Insurance International (LII) Innovation Forum 2016, which was held at The Tower Hotel in London, last November.
The Life Insurance International Innovation Forum & Awards will be held again in London this year on 8 November, and Lyons’ message for the industry still rings through. Full details about this year’s LII innovation forum & Awards can be found on LII’s website.
A challenge facing protection insurance is that it is usually perceived as a non-essential grudge purchase.
However, in Lyons’ view, the industry often tends to focus on designing a better product, making marginal service improvements, rather than telling a story or creating an experience.
In terms of engaging a customer making a grudge purchase, it is also worth noting that that loyalty business models have developed in other sectors, such as nectar points and Avios
At last year’s LII innovation forum, Lyons highlighted the success achieved in getting people to wear seatbelts as a case study for the protection insurance market, and an example how other industries have overcome challenges.
In the case of seatbelts and its relevance for the protection insurance market, he explained that Volvo gave its 3-point seatbelt invention patent to rivals for free.
What protection insurers can learn from seatbelts:
- Seatbelts were fitted as standard in all vehicles from 1963, yet adherence was still less than 10%.
- The government then started educating drivers and passengers about the importance of seat belts and incentivised.
- The result was that in one generation adherence had shifted to more than 85%, said Lyons.
Lyons is absolutely right in saying that disruptive business models share some common themes including:
- They take advantage of existing technology
- They work out how to deliver an easy and immediate solution for their customer
- Service or increased value is offered digitally
- There is some element of trusted information
In order for the life insurance market to grow and innovate, the industry needs to align with other stakeholders. As Lyons said at last November’s LII Innovation Forum: “Play where people play. Make it easy. Digital.”