As with many other sectors, the banking and insurance industries have experienced tremendous changes over the past few years. Consumer demands, behavior and expectations have put pressure on these businesses to adjust, adapt and ensure that they remain relevant and helpful for their target customers.
Those interested in succeeding within the industry must prepare for the avalanche of new technology and the transition as the millennial generation begins to dominate the workforce and baby boomers begin to retire. Some of the latest trends in the insurance industry have forced even the most established organizations to look carefully at the changes that this generation brings to their businesses, including what these consumers want to see from brands and how they engage in daily business.
The number of organizations within the insurance and banking industries that compete for the attention and revenue from their customers is drastically growing. This situation is pushing all organizations to make sure they track and understand some of the key changes and trends that millennials bring to the finance and insurance industry analysis sector.
Here is what all businesses should know about changes in this field and the increasing role of hospitality in how businesses engage and interact with their customers.
How millennials are changing the insurance industry?
Millennials, a term which includes those born from around the beginning of the 1980s through the mid-1990s, have begun to have an increasingly prevalent role in the modern workforce. These individuals consist of the first ‘digitally native’ generation. In other words, they were exposed to many forms of technology, such as the internet and mobile phones, during their formative years. As they have grown up, technology has only become a more important aspect of their daily lives.
As these millennials have entered adulthood, they have called for changes in businesses, including those in the insurance and banking industries. With their higher technological aptitude, these younger adults have seen the convenience that technology can offer to their lives in a variety of ways. They have more expectations of digital transactions and digital capabilities across all of their interactions with businesses, including insurance.
As a result, the millennial generation demonstrates a great interest in how they can use smart devices to fulfill their needs without increasing their risk. The more often they can use their smart devices and quickly take care of necessary tasks on their own, the more positively they see the experience with the business.
These adults are less loyal to a company in particular. Instead, they place a greater priority on what companies can do for them. They are not likely to continue using an insurance company because they have always done so, but rather if they feel they get personalized attention and a quality customer experience.
At the same time, millennials also feel concerned about risk and want to make sure that the processes and operations they are taking care of through their devices do not represent unnecessary dangers regarding their sensitive, personal information.
What are the technology trends in the insurance industry?
As a result of the heavy use of technology by the digitally-native millennials, some in the insurance and banking industries have begun to adapt and increase their usage of newer capabilities in their processes and offerings. They have uncovered several different ways that technology benefits their businesses, building a better experience for customers and enhancing the performance of the companies themselves.
The benefits technology has offered the insurance industry
Organizations have found that technology does enhance their ability to detect fraud. Computers that can track customers’ spending habits and patterns significantly improve the ability of brands to uncover potentially compromised information. This, in turn, protects customers and gives the brand a boost to its reputation.
Technology has also reduced some of the costs associated with running the company. Since technology can help handle some of the more routine and monotonous administrative tasks, the employees have more opportunities to focus directly on customers and handle other processes that cannot be done as easily. This reduces overheads and frees up the budget for the business to grow.
Similarly, companies can adopt more of a start-up mindset, as they do not need as much of an upfront investment to launch and grow the company. The internet can help them begin and then expand new services significantly easier and without as many associated fees and costs.
Finally, technology also improves the ability of companies to engage with their customers. They can track customer trends and understand what their prospect and leads want to see from the companies with which they do business, both in terms of marketing messages and service offer. Through social media, they can engage directly with existing and prospective customers as well, answering their questions and providing a more personalized form of service.
Using technology to improve product offerings
One of the most significant ways that millennials and technology have impacted insurance industry trends has been the overall customer experience itself, including the products offered. The organizations that rise to the top understand how to use technological capabilities to create and offer more personalized products based on customer usage data. They can use this insight to create value add-ons and build a more engaged customer model.
These leading businesses use technology and the information it provides to track and measure the customer experience. Knowing precisely how customers interact with the website and employees themselves throughout their touchpoints with a given company can empower the organization to adjust and change their processes. They can ensure they regularly meet and exceed customer expectations.
Those who are more technologically adept and ready to seize the new opportunities available in the digital age can use this insight to create a more user-friendly presence online and products ready to serve customer expectations. They can use customer data tracking to see how customers behave at various points in the buyer’s journey and what matters the most to them as they engage with the organization.
What insurance and banking companies do to thrive?
Given the growing importance of technology and technology adoption in the insurance and banking industries, we have identified three main traits that companies should focus on in terms of nurturing and building within their organizations. These key ideas can help businesses to grow and adapt to changing social demands. As these businesses understand the trends in the insurance industry, they will be prepared to keep their organization at the forefront.
Prepare to adapt to the changing technology culture
The key to understanding how millennials are changing the insurance industry is in their adoption of technology.
The internet makes it easy for more start-ups to begin building. Additionally, it allows customers to access businesses around the world. They no longer feel limited by geography. Therefore, those in the insurance and banking fields need to be aware of the potential for these competitors.
To stay well-informed of these insurance industry trends, organizations should dedicate resources to researching and understanding the latest available technology. Dedicated staff in marketing, sales and customer service teams should study how it has been successfully adopted by other companies, as well as ways that emerging technology might have the capacity to be incorporated into their operations moving forward.
Research services that can be completed digitally to see how you can safely incorporate tasks and services to smart devices. The goal should lie in providing convenient and intuitive services for customers so they can complete their tasks on their own schedule.
Remember that although millennials want to use their smart devices when possible, they do not want to compromise their security. As technology develops, so too will the security systems in place. The staff members who focus on learning about technology should also incorporate security concerns and protections.
Employ the technology to better manage resources and bring in tech-native adults
As previously discussed, one of the benefits that organizations notice about the growing technology trends in the insurance industry has been its cost-saving potential. With the ability to handle more administrative tasks through the latest software and devices, brands have more resources they can allocate in other directions.
Businesses need to recognize the growing importance of the millennial generation and channel resources towards building technological capabilities. They can employ automation to help them cut costs, accelerate their internal processes and better meet their customer expectations. Simultaneously, high-powered marketing and advertising can use data to better target prospective customers and provide them with relevant information. Thus, as the company uses the budget wisely, businesses will find themselves with more resources to allocate towards investing in further technological development and attracting the emerging generations of adults.
As technology becomes increasingly prevalent throughout all aspects of daily life, it emerges as the expectation rather than a nice benefit. The brands that are able to capitalize on these opportunities will be better positioned to remain at the forefront of the industry.
Incorporate the importance of customer engagement and hospitality
Customers today, particularly millennials, place a large emphasis on the importance of customer service. They want to know that the brands with whom they do business place their individual needs first. With the internet, consumers have the choice of countless brands and companies within a given niche to fill their needs, and they know that they can go to another organization when the first one does not prioritize their business.
Therefore, the insurance industry needs to understand the importance of hospitality and a customer service model. Technology provides these businesses with the chance to gain an intimate understanding of customer needs. They can track how customers move throughout the brand website and their progression through the buyer’s journey. They can also use personal customer interactions with representatives of the organization to better gauge their satisfaction with the experience they receive.
This can then inform the company’s understanding of how their prospects feel throughout their journey and what points and actions have the most success in encouraging them to become and remain a customer. Hospitality skills will play a large role in the transition.
Specifically, organizations in the insurance industry will need to focus on building a service model of their processes. They must place the customer experience first, building out their processes and products from there.
Rather than making a list of products and then determining how to market them, they must instead identify the needs and pain points of the customer and create customer touchpoints, interactions and products that focus on these key areas.
Training staff and employees in hospitality best practices will help to create a superior customer experience. Training on management, organization as well as operations best practices will act as the bricks-and-mortar business for customers who come to the door, the ones we engage with on the phone or online. This will help customers feel they personally matter to the brand use technology to track how the changes reflect in customer behavior and how consumer actions adapt based on the new policies. This will help your organization better understand the success of your efforts and where the customer service-oriented practices will help you tap into the commercial insurance industry trends.
The changing insurance industry and the intersection of technology and hospitality
As technology continues to become an increasingly prevalent part of daily life for people around the world, no industry can expect to move forward as they did before. For those in the insurance and banking industry, the latest insurance industry trends speak clearly to the importance of adopting technology. Those who can meet and exceed the expectations of the emerging millennial generation position themselves to move forward with confidence.
The changes within the industry are inspiring, as organizations have the chance to get to know customer behaviors even better and serve them with a new level of personalization. Seeing the interaction between technology and providing customer service excellence through acquired and practiced hospitality skills should help all brands grow confidently.
Those interested in improving their standing within the industry and retaining a competitive edge should think carefully about how they can introduce and adopt more technology into their processes. They can focus on training their team and helping each employee understand the importance of hospitality in every customer interaction.
Source: Catlin T., Lorenz J-T., Münstermann B., Ricciardi V. (2017) “Insurtech – the threat that inspires” [online] McKinsey&Company.