How Data Can Demystify Next-Gen Consumers

Generation Y consumers present a unique and fast-moving target for insurers; catching them may require real-time insights and even faster, more agile systems.

Insurance Networking News, February 28, 2013

Justin Stephani

How and where do customers want to do business? This question is plaguing insurers. As one formidable generation grows older and a new one comes of age with completely different lifestyle and purchasing habits, insurers are slowly realizing that they’ll need to abandon traditional business operations in order to keep up. But how do they do that when their new consumers are so drastically different from those they’re used to doing business with? To solve the enigmas that next-gen consumers present to insurers, data is proving to be the path to concrete answers.

Indeed, as younger generations overtake insurers’ radars, they will represent a foreign species—raised online, in an environment insurance executives are still becoming acquainted with. Being a specialty insurer with a mostly defined demographic, Jewelers Mutual Insurance Company started its quest for better customer experience with a bit of a head start.

“Typically, [the company’s policyholders] are early to mid-20s, much more deft in the use of newer technologies, and really want to have the control in their own hands,” says Jared Ashland, Director, Architecture and Integration Services, Jewelers Mutual. “So we’ve started down the path to self-service, and the platform we’ve built will enable us to add more features and capabilities as they’re demanded.” With the more tech-savvy generations in mind, the company decided to make a big investment in customer experience a few years ago, and only recently finished implementing Guidewire’s Insurance Suite, which involved the deployment of new billing, underwriting, claims and policy administration systems for Jewelers’ personal lines.

With this new platform, the insurer expects to reach customers in real time before they have a chance to forget about insuring their purchase. “Most of our customers are in the bridal market or newly engaged and have plenty of other things on their mind, and when they leave that store, insuring their investment becomes an afterthought,” Ashland says. So if they just want to make sure it’s insured and take the deductible, they can have it insured before they ever step out the door with it.” This goal is ambitious but simple, aligning with basic personal lines demands sure to be found among its typically younger consumers: real-time interactions with mobile and online offering a high level of self-service.

Although the deployment is now finished, Ashland asserts that this was only the first step, as there is still much for Jewelers to learn about reaching its personal lines customers. The company asserts that its underlying motivation for the purchase was to build a strong foundation for gleaning customer experience insights and acting on them quickly.

This long first step is a required leap of faith for many insurers. Many are becoming aware that they need to become as user-friendly as possible and anticipate the wants, needs and questions of new, unknown generations of consumers. This presents a fundamental shift in how the business is conducted and maintained needs to take place, a shift that, Ashland points out, puts consumers utterly in control and leaves insurers depending utterly on their foundational technology to deliver insights gleaned from customer data and enriched processes.

CUSTOMER, CUSTOMER, CUSTOMER

Robert Cummings, head of SAP’s insurance business was recently privy to a conversation between insurance executives that coalesced when they determined the “three biggest challenges they see coming up in the future: customer, customer and customer.”

Cummings encapsulates this “sea change” in the insurance business by explaining how a Taiwanese insurer shot to the top of the market in less than two years after being bought from somebody outside of the insurance industry. The problem was that the insurer was avoiding contact with customers—a business tactic that correlated with the old way of conducting business, Cummings says.

“[Avoiding customers] was actually easy when brokers or agents took care of all that, but now that it’s easy for customers to switch carriers and users are becoming much more sophisticated, this makes it easy for carriers to lose touch with their customers,” says Cummings. “The next generation coming is not used to working with middle men but instead going on their social network and saying, ‘ I just bought a car, do you guys have any suggestions of what insurance I should pick?’ It’s terrifying insurers actually.”

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