Distilled Knowledge

What the insurance industry can learn from the bourbon shortage

by Greg Ng

It can be difficult to predict trends. Unfortunately, many brands across industries too often find themselves in a situation where they have to react rather than set the trend.

And for some, that can result in being too far behind the trends to catch up.

Take the bourbon industry, for example, which has experienced a recent spike in consumption. While this may seem great for distillers, it takes years to make bourbon. And, because no one could have predicted the sudden popularity, distillers couldn’t get ahead in production, resulting in an industry-wide shortage.

Today, mobile is leading the trend in digital experience, and there is an undeniable demand for mobile in the insurance industry. According to The State of the Mobile Experience study, 62 percent of insurance companies are interested in offering their customers policy management via mobile, and 96 percent of insurance employees are willing to use a mobile insurance app to manage accounts.

However, like the bourbon industry, insurance organizations tend to be slow to react to trends. They recognize the need for a mobile site or app but hesitations have kept them from investing in a strong mobile presence.

While insurance companies don’t need as long as a decade to perfect their product in order to be successful, they do need to possess an innovative mindset to meet their customer expectations both today and in the future.

What makes adoption difficult?

While it’s important that insurance companies adapt their strategy to evolving customer trends, there are roadblocks in the industry that are difficult to overcome.

Insurance is a highly regulated industry. These longstanding regulations and processes can make organizational change a challenge. Not to mention the legacy solutions that many of these companies are still operating on. It can be difficult for insurance decision makers to understand the utility of innovative technologies, let alone the value of changing their current procedures to accommodate these new strategies.

Complacency is also a significant challenge. The current processes have worked well for employees in the past and have allowed them to sufficiently meet their customers’ needs. So why change? Despite seeing a willingness from nearly all employees to use a mobile app, insurance respondents in The State of Mobile Experience study expressed that employee objections would still make implementation difficult.

In fact, aversion to change was the number one reservation insurance respondents cited (65 percent), followed by employees’ fear of losing customer touch points (43 percent) and general discomfort with mobile devices (39 percent). Technical barriers, budget and resources were also obstacles to creating a more ideal mobile experience. The significant resistance to change is not something that will be resolved overnight.

What can insurance carriers do to prepare?

While concerns and reservations are valid, the competition is not waiting. They’re strategizing about how to overcome these challenges in order to provide consumers with the mobile offerings they’ve come to expect.

The highly competitive companies will be those with mobile solutions that provide an elite user experience, and that includes for employees as well. Providing employees and agents with mobile capabilities that make their job easier and more efficient will, in turn, improve the customer service that policyholders receive.

When investing in mobile solutions, an intuitive user experience will help both consumers and employees receive the full benefit of a mobile experience. Speed and access to information while on-the-go will enable services such as smarter claims handling, new customer registration, account management and timely policy updates. Through a high quality mobile experience insurance companies will be able to provide a quick view of information and easier access to customers, winning over resistant employees.

It’s only when employees are fully bought-in to mobile that customers will receive the quality mobile experience that they expect.

Why is the insurance industry out of excuses?

For many years decision makers in insurance would argue that mobile was just a trend. However, with 60% of Gen Xers and 42% of Baby Boomers using a smartphone daily, it’s evident that older customers are now using mobile more to complete daily tasks.

And almost 50% of digital native millennials are now in a life stage where insurance decisions are coming into view. It’s time to look at the warning signs. The industry is changing, the customer demands are evolving and the competition is adapting.

Now is the time to put a mobile strategy into place – before your company falls too far behind the competition. Consumers aren’t waiting. They’ve fully embraced mobile and are choosing to work with providers that have as well. Because insurance is not an industry that experiences a lot of customer turnover, people who open a policy with a particular insurance provider are likely to stay with that provider. Now is the time to adapt. Millennials are just entering the marketplace and making decisions about the provider they’ll choose.

A good thing to remember is that insurance is not bourbon – it’s not going to take a decade to prepare for this new wave of consumers. However, it’s not going to happen overnight either. There are simple steps and initial investments companies can take now to adapt and prepare for the demand to continue to rise. ◊