This article originally appeared on LinkedIn on 2018-03-03.
A few nights ago I watched the movie The Post. Directed and produced by Steven Spielberg, it stars Meryl Streep as Katharine Graham, the first female publisher of a major American newspaper, and Tom Hanks as Ben Bradlee. The movie is a true story of how The Washington Post attempted to publish the Pentagon Papers: a top secret and classified analysis regarding the United States’ 30-year involvement in the Vietnam War. The movie reminded me of the crucial importance of a free press: the media’s noble mission as a check on government power. In the words of the US Supreme Court:
“In the First Amendment, the Founding Fathers gave the free press the protection it must have to fulfill its essential role in our democracy. The press was to serve the governed, not the governors.”
Source: Judge Hugo Black, writing for the 6-3 U.S. Supreme Court majority that decided in favor of the press in the case of the Pentagon Papers.
The Newspaper Industry#
Watching The Post was nostalgic: set in the 1970’s, it featured scenes of reporters at typewriters, staff running to hand deliver the typewritten pages to the press room before printing deadlines, the setting up and running of the huge mechanical printing presses. A whole era lost. Indeed, the Washington Post is an old company. It was founded in 1877, It is now over 140 years old. Ironically, the Washington Post is now owned by one of the biggest digital innovators of our time, Amazon’s Jeff Bezos.
Like many industries, the internet era brought the long term viability of the newspaper business into question as journalistic content could be distributed and consumed inexpensively online. The New York Times, in an internal innovation report (leaked to the public) made the challenge clear:
“The New York Times is winning at journalism. Of all the challenges facing a media company in the digital age, producing great journalism is the hardest…At the same time, we are falling behind in a second critical area: the art and science of getting our journalism to readers. We have always cared about the reach and impact of our work, but we haven’t done enough to crack that code in the digital era.”
Source: The New York Times Innovation Report.
Parallels with the Insurance Industry#
The parallels between the newspaper and the insurance industries are incredibly similar: a long and storied history, with many companies well over 100 years old, serving a noble purpose. In the case of insurance: to protect society, businesses, and individuals from financial loss and to help them recover when such loss or damage occurs.
Similar to the Times, the insurance industry has always cared about the reach and impact of the protection and peace of mind it provides. But, have we done enough to increase our reach and protect even more people, more effectively, in the digital era? As Manulife’s Roy Gori bluntly noted:
“We need to become a much more customer-orientated organization and quite frankly the entire industry does. In many ways, if I‘m absolutely honest, our industry is still in the dark ages.”
Source: Reuters (emphasis mine).
It’s an exciting time for insurance as we transform our industry. I believe we can model the way forward in a similar manner to how the newspaper industry has begun to transform itself in the digital era.
Grow our Reach#
There is a saying that “insurance is sold, not bought”. This is a terribly limiting premise for an entire industry! Why is it said? On the surface, insurance is an intangible product. It is often perceived as complex, at times confusing, and as a result very difficult for many to understand. Does it really have to be this way?
Distribution & Packaging#
We have to make it easier for consumers to “discover” the value of insurance. Foremost is how it is packaged and how it is distributed. Digital or digitally enabled distribution is the obvious opportunity. Traditional intermediaries such as agents, brokers and bank partners have only so much reach without leveraging digital. Insurance company websites and apps are often passive, either modelled on, or reinforcing existing heretofore non-digital distribution models. Digital natives are more adept at leveraging social, optimizing search and building communities where qualified prospects are already showing up digitally. Digital content can be much more context appropriate and personalized at scale.
The real value lies deeper though, in the “packaging”. Products are often too complicated, predicated on old sales and processing models, with corresponding jargon that inevitably develops over the years. Often what is sold is in many cases essentially the same kind of product that my parents bought 50 years ago. What is equally concerning is the suboptimal impact complexity has, not just on our customers, but potentially our own distribution partners. It is a challenge to be trained on, and sell, complex products. Increasingly, customers are only willing to buy well designed, simple solutions. This is a prerequisite for digitally enabled distribution. There are many promising examples emerging in the industry such as Manulife’s GradMaker and MetLife/LumenLab’s Vitana that address this challenge.
Promotion#
How many people who need or can benefit from our product are actually seeing it? How do we call attention to our value? In the digital era, we need to become experts at digital! For example, by leveraging search optimization and network effects through social (to the point: identifying and engaging with influencers on these networks is paramount). Cost of acquisition/conversion through digital channels needs to be measured and leveraged for running experiments that optimize digital promotion.
At one point on their own digital journey, the New York Times implemented a policy where reporters had to submit five tweets along with each story they file. This kind of front-line promotion can be one powerful way to leverage the social networks of your stakeholders. However, establishing guidelines, the “what” and the “how”, is crucially important - especially in a regulated industry. Technology helps: Hearsay Systems is but one example of a solution that allows carriers, agents and advisors to manage promotion over social in an effective yet compliant way.
Connection, Engagement, Relationship#
This may be the most difficult: connecting with, engaging, and establishing true ongoing two-way relationships with customers. As Kyle Nakatsuji, founder and CEO at Clearcover points out:
“This is because customers who see insurance products as something intangible, commoditized, and compulsory end up satisficing. They aren’t seeking a relationship with an insurance brand.”
Source: Engagement isn’t always the answer (emphasis mine).
Even if it is a case of “less is more”, how insurers can create an effective two-way relationship with customers that deepens their loyalty is a key outcome. It also circles back to discovery and promotion: the value of insurance will probably reach the broadest audience through other customers. There is also an opportunity to expand engagement beyond advice and service: by having customers “co-create” solutions that add even greater value. In this way, engagement circles back to packaging as well. The industry needs to get more comfortable with pulling back the curtain a little and giving customers more visibility into how we develop solutions and do our work. This, by definition, can only deepen customer connection to insurers.
Strengthen the Customer Experience#
Regardless of channel, customers today expect to engage with organizations in a seamless way: transparent and efficient. Customer experience is the totality of all interactions a customer has with an organization. Whether the industry instigates it, or it comes from the outside, insurance will be disrupted. New players - digital natives - have an inherent focus on customer journeys and experience. As I have mentioned before: insurance companies have traditionally been designed to sell and service “policies”. We need to change that and redesign insurance companies around serving customers and their journeys: providing an exceptional customer experience over the lifetime of the customer relationship.
There are many functions within insurance companies that are implicitly focused on elements of the customer experience: marketing, training, product development, distribution, customer on-boarding, claims processing, technology and customer service. There is a clear opportunity for more collaboration and better integration. This could mean significant reorganization, or incentivizing new ways of working: agile methods, integrating technology directly into operations and a ruthless focus on improving customer journeys and experiences vs. functional efficiencies.
What do you think? What is the insurance industry doing well? How can the insurance industry improve awareness of its value? How can we better distribute and package our solutions in the digital era?