It’s a new dawn … It’s a new day ... It’s a new life ... For me … And I’m feeling good.
These lyrics from the song “Feeling Good” were composed by English songwriters Anthony Newley and Leslie Bricusse for the musical The Roar of the Greasepaint – The Smell of the Crowd, and the song was first performed on stage in 1964 by Cy Grant. This classic song has since been reinvented and re-released, by singers Nina Simone, Michael Buble, and Muse to name a few, and has become a part of pop culture, used in films and TV shows. Just like this song, it’s a new dawn, a new day and a new life for every business, including insurance. But the question is … are you feeling good about it? I mean good about competing with new industry challengers?
Today’s new challengers may not compete directly by offering and underwriting insurance, but they are competing in more profound and disruptive ways that capture customer relationship, loyalty, pocketbook and much more through innovative offerings, engagement and business models. These new challengers are the big tech and Silicon Valley companies, Google, Amazon, Twitter, Apple, Facebook, eBay, and others.
Why do insurers have to compete with companies like these? Because of the massive numbers of users the challengers have as engaged and loyal customers. Insurance companies’ numbers pale in comparison. This disparity between the growing numbers of challenger versus insurer customers highlights the dramatic foundational shift occurring in terms of customer engagement, loyalty, and expectations. It also shows why these technology and Silicon Valley companies pose a competitive threat to insurance.
So how can insurers and independent agents and brokers prepare and respond? In an SMA research brief, The Shifting Competitive Landscape: A New Breed of Industry Challengers, we identified and discussed key attributes that contrast the differences between these new challengers and insurers. The differences could not be more stark. If knowledge is power, then insurers, independent agents, and brokers should be gathering all the facts and making all the plans and strategies they can. Here are some good places to start.
1. Customer vs. product
In today’s digital world, it’s all about the customer. Customers seek simplicity, personalization, and connectivity, and they demand value-added services. No longer is it just the product; it is about all the services built around, included within or leveraged by the product. How will you redefine your insurance products? Wrap them with new, personalized services or build a digital platform that engages the customer? Might you need to seek new partners for services?
2. External vs. internal
Look beyond the traditional boundaries of insurance. What companies can you partner with to reach new customers or expand what you can offer to your customers today? Think of new startups like overstock.com and traditional retailers like Walmart. Could it be automotive companies, home repair services, grocery stores, a local community or crowdsourcing groups? What others?
Think outside the box.