In our summer management meeting of the Customer Contact Center for which i’m accountable, we had an interesting discussion with our staff how insurance firms (i work within the health insurance industry) will develop in the forth coming five years. Within the set up of an insurance firm we noticed fields that are strategic, support only or suitable for outsourcing.
Depending on the business model, such a field could be tagged strategic, support or suitable for outsourcing.
An interesting question also adressed in the recent publication the future of finance. The found post (by Idris Motee) here reflects on what’s the last innovation you have seen coming from the insurance industry.
What’s The Last Innovation You’ve Seen Coming From The Insurance Industry?
I am an Insurance Professional with more than 12 years of experience. I have a good presence and active in a number Social Networks with good number of connections. I am thinking of using them to market more products. I would like to hear your expert views on Social Networks in marketing of Insurance Products. I know you are busy but appreciate any advice you can provide.
Hope to hear from all of you soon.
The question is how social networks and virtual social connections can have any impact on the sales and distribution of products such as insurance as well as other financial services? I don’t have an answer but we take a quick 15 minute analysis of the issues.
Let’s take a step back and look at the challenges around marketing and distribution of life insurance products (health insurance is a different story). Will the traditional model of “advisor-based” distribution will come under some disruption?
With the average age of agents rising steadily; sales is stagnant and margins getting thinner, insurance company needs to rethink “marketing and distribution”. Steady of influx of new investment products from banks that are also competing for insurance dollars. The biggest disruption will most likely remain on the distribution side. The importance of asset accumulation products is particularly noteworthy because this is the market where insurers face the most intense competition from all the banks, mutual fund cos, and investment advisory firms. Because these non-traditional competitors have much lower distribution costs than insurers, insurers face intense pressure to operate more efficiently. Distribution costs are one of the largest expense items associated with life and annuity policies.
Industry consolidation in insurance is different from banking. We’ve seen small banks going away but there are not many changes among insurance players, because it has less restriction and many are successful in operating in nationally. But the restructuring of the life insurance industry primarily tends to involve such strategic objectives as an increased emphasis on core competencies or the expansion into new markets rather than the consolidation of geographically concentrated firms as in banking. Expect competitive intensity to remain the same.
Back to the question posted to me. I think there are two ways the insurance industry can take advantage of social technologies. First is to empowering agents to take advantage of social media as their CRM systems. It is the best way to reach people with common interests, while the other is connecting with people engaged in a similar occupation. Provide them with tools to make content a lot more engaging and tons of training. It is as important as knowing how to use a phone.
Second is the extreme widgetization of the products an services. Innovative thinking needs to be built in the existing products around their “socialabiity” and “connectivity”. Life insurance is a high involvement product, it helps us to prepare for two risks—dying too young or living too long. I think living too long is more of a problem. A recent study done by The Boston College Center for Retirement Research found that 43% of American households are at risk of being unable to maintain their pre-retirement income. And if you take away some optimistic assumptions such as using a reverse mortgage, over 60% are not prepared.
- A socially-enabled annuity product – designed to be marketed through online word-of-mouth?
- A mass produced, multi-component prepackaged one-click solutions – there is a gap in the market place for this?
- A hyper-efficient direct distribution model – a super low cost solution that makes ING looks expensive?
- A direct selling mid-market lifetime income solution – income is now the most practical consideration?
- Plan conversion exchange – allow people to convert defined contribution assets into income for life through annuitization?
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