The Future of Risk: A Customer Centric View Article written by Rebecca Bell At a recent conference, an insurance executive described this as being the most disruptive era our industry has seen in the last 35 years. Those comments are not made lightly. The business model of risk as we know it is changing, driven by a number of immutable forces: digitization, big data, the development of new vehicle technology and connectivity, the rise of the connected consumer, changing vehicle ownership patterns, and major shifts in mobility habits. And for an industry where managing and minimizing risk is the core of your business, these are indeed challenging times. I want to explore one of these forces - the rise of the connected, empowered consumer - and reflect on how as an industry we can turn the challenges it presents into potential opportunities for growth and differentiation.
The empowered consumer When I first got my driving license, I saw automobile insurance as nothing more than a driving tax. I was young, sure of myself and the very last thing I thought would happen to me was a collision or an incident where I had to file a claim. I am certainly not alone. Few drivers think it will happen to them. And from our research and work with clients across 5 continents, drivers in
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Photo by Ben Kolde on Unsplash
most markets share one opinion: most of them have a pretty high opinion of their own driving skills and capability. So the relevance of paying out cash for an incident that you think probably won’t happen to you is far from compelling to most people. At the same time, and apologies for the awful pun, the consumer has been thrust into the driver’s seat. And it’s technology that’s doing this. There’s literally an app for everything. Smartphones give you access to insights about anything, and services to help you do almost every task, are literally right at your fingertips. And it can all be personalized. I can order my pizza my way, tailor my vacation and get my work done without ever having to speak to a person if that’s what I choose. So is it any wonder that a consumer’s expectation for convenience, fairness, cost-effectiveness and transparency might start to influence their insurance experience too?
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