How transformation turns insurers into alliesby Nico Rudorf
For many people, insurance is a topic that is not necessarily associated with joy and well-being. Yet at its core, it's about something very personal and important - our security. How do insurers make the leap from a pure service provider to an ally?
Beloved objects, financial futures, physical integrity, asserting one's rights: hardly any other topic is so emotionally charged. So where does the perceived distance between insurers and insurants come from? Why do they often feel they are working against each other instead of with each other? One obstacle could be that most people have already had a bad experience in this sensitive area. When it comes to our health and coverage, we want to be understood and given individualized advice, rather than being a case on file or a number in the system.
Have insurance companies missed the boat?
Mindset shift from insurer to ally.
A first step to close this gap: true customer centricity with empathy and individuality. Customer centricity is unfortunately too often missing in the eyes of many insureds. To correct this perception and reposition themselves internally and externally, insurance companies must first undergo a mindset shift. They must change from being administrative service providers to empathetic allies of the insured. Allies meet their customers at eye level, offer them individually tailored services and opportunities for self-determination. In this way, they convey closeness and empathy. Sincere appreciation, genuine interest and the best possible utilization of services play a role for the insured. Customers should have the feeling that insurers are fighting for their safety and health - not for the highest possible premiums.
An ally takes the insured into the future. The relationship and the points of contact are shaped together, always with an ear to the needs, wishes and "jobs to be done" of the insured. If this is also done with pleasure and is not seen as an additional workload, a first step in the transformation from administrative unit to life companion has been taken.
The insuretech company Wefox is leading by example. The provider has listened to the needs of its customers and taken the leap into the digital world. Without endless paperwork, without mail ping-pong. All insurance policies can be managed digitally and in real time and adjusted to individual needs - simply via the website or app.
Understand what's at stake.
Keywort to have an ear for needs and joint relationship building: the second step is to understand what the insured really wants. If you fall in love with the problem, you get to the bottom of the real pain points and can deliver even better solutions.
Customers attach great importance to being perceived by their insurance company in their particular situation, with their individual needs. They don't need an administrative body, they need someone to take care of them, someone who goes the extra mile for them, away from the obligations and requirements. Only then will the insured feel like an individual and not part of the masses.
Insurers must show genuine interest, pick up on the realities of the lives of their customers through individualized offers and suitable communication events, and find out what their customers really expect by changing their perspective.
A good example of this is "pay-by-use" rates, which have been the subject of intense debate in the insurance world for some time. These are individual policies in which payment is made only for the services actually used. No more, no less. In a survey conducted by the digital association Bitkom in 2020, one in two people in Germany said they felt that this individual distribution was fairer.
The provider Lemonade is currently showing what such fair policies can look like. With "Lemonade Giveback," up to 40% of an individual's annual insurance premium goes to a non-profit organization that policyholders can select themselves when they take out a policy. In 2021, thanks to the program, 1.9 million euros went to a good cause - instead of into the insurer's pocket.
Various tried-and-tested methods and formats can be used to change perspectives and actively involve policyholders. The classic surveys and interviews are particularly suitable for asking customers about their expectations. But regular feedback rounds, roundtables, or co-creative workshops with target groups are also a good way to find out customers' gain and pain points. They also offer the opportunity to involve customers in new product developments, to receive direct feedback from them on new ideas, or to get a feel for moods and wishes through informal exchange. In this way, opportunities can be identified early on and prototypes or service processes can be tested during the development process. If something doesn't work, it can be redirected immediately.
To ensure that the good transformation resolutions do not come to nothing, the research findings must be carefully evaluated and incorporated into the further design of the customer relationship. This is a continuous forward process of designing, testing, learning and improving. This must also not end at department doors. One consequence of this could be that new, overarching units are created to deal with topics such as insight generation, customer journey management, customer relationship design, prototyping or digital product design.
Transformation starts with employees
All of this requires new thinking and new skills among employees. Several things are necessary to turn employees into customer allies:
First and foremost, a common vision is needed to shape the future with and for many people. It is important to show what the transformation is intended to achieve and what the desired target state should look like. When these points are clear, it will become clear to everyone involved why the joint effort is worthwhile. The transformation takes on a sense of purpose.
Second, leaders must shine to make the entire team shine. Leaders must be able to communicate the target picture, derive their own vision from it, and take charge of the change with their teams with a modern understanding of leadership.
After that, it's all about results through experiences. Actively involving employees in overarching lighthouse initiatives, working together in cross-departmental teams, having the opportunity to help shape new paths and develop oneself, using co-creative methods to build understanding together with customers, and trying out new techniques helps to overcome the limitations of one's own desk, a product, or an entire department. This creates space for new thinking and new perspectives. Employees experience directly and immediately how the new target image feels in practice - quite organically and without pressure. They are shapers of the change, not affected parties.
The whole thing is reinforced by a system that rewards change - for example, through new targets and KPIs - that provides a stage for role models and that encourages exchange.
None of this can be accomplished overnight. Steps should be taken with a sense of proportion and patience. It's not about intensity, but about continuity. Switching from clerk to customer companion takes time and a multitude of moments of experience and regular reflection.
It all sounds like a lot of work. And it is. But here, too, the principle applies: The best way to lose your fear of the new is to be open and get to know it bit by bit.