The insurance customer of the future part 2—What they want
Blog: Capgemini CTO Blog
In part 1—Who the insurance customer of the future will be, we looked at the characteristics that define the insurance customer of the future compared to prior generations, and summarized millennials as smart shoppers, with lower loyalty, who are simultaneously self-centered but also caring consumers. One of the respondents to that blog also added that they tend to be habitually healthy—monitoring, and sometimes publishing, their efforts in that regard.
This blog focuses on what the insurance customer of the future will want from their providers, including their insurers, in terms of the propositions on offer and the way they are sold and serviced.
These are the trends that I see as most important for insurers to take account of.
1) Access not assets
My son differs from me in many ways. Just one of those ways is that he doesn’t have a car. He can’t comprehend why anyone would bother owning something that costs a lot up front, needs maintaining, sometimes goes wrong, and sits in the garage for probably 95% of its life.
His friends are the same. If they need transport they just “rent” it from Uber, taxi services, public transport or, for special trips, maybe a car rental company.
Equally, this generation is less likely to own their own home, let alone a second home. They rent their main home and use AirBnB, or hotels, for vacations.
They don’t care about owning the assets—as long as they have access to them when desired.
2) Gigs are good
Nor does my son have what I, as a traditionalist, would call a “job.” Instead he participates in multiple economic activities generating their own individual income streams. He doesn’t happen to be an Uber driver by day or active on Fiverr at night, but those are the types of highly flexible “gigs” that appeal to his generation.
My generation sees a lack of regular salary as risky. My son points out that we’ve got it backwards; if I lost my job I’d have no income, whereas he’d just spend more time on his other gigs.
3) Experiences excite
As I said under “Access not Assets,” millennials are less interested in owning things. But that doesn’t mean they don’t like spending money. They just spend it differently from previous generations.
Rather than on assets, millennials spend their money on experiences: activities, and adventures that they can enjoy in the moment, but whose memories will last long into the future. Probably much longer than that car or motor bike will last. When insurers develop new propositions, they need to consider the experience at least as much as the underlying product.
I said, under the “Lower loyalty” characteristic in part 1, that the respect these customers have for longstanding institutions and brands is low.
The flipside of that is that their respect for their peers is high. If their peers recommend a brand to them, they will take an interest. If their peers have a bad experience with a brand, then they themselves are far more likely to avoid it.
This means that managing an insurer’s reputation, at a very granular segment-of-one level, becomes more important than ever.
5) Personalized please
When I buy a coffee from Starbucks, I continue to be amazed by the degree of personalization that is on offer to their customers. At heart, all they are selling is coffee. Not so very long ago, the choices would have been with, or without, milk or sugar.
Now the customer is offered virtually any combination of type of milk, quality of milk, frothiness of milk, type of sugar, added flavors, with caffeine or not, temperature, size of cup— and even then, I’ve probably left a few options out.
I’m not sure whether these options were first offered because customers demanded them, or whether it was a case of “offer it and they will come.” But one way or the other, it is changing consumers’ expectations of every other product or service they are offered.
If an offering can’t be personalized to their specific tastes, millennials go to someone else who can meet that need.
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Please come back for part 3—How the insurance customer of the future wants it.