Check out Ben Ruddle, senior principal in strategy at Publicis Sapient, as he explains the opportunities in focusing on individuals and businesses with unique needs (known as “beyond beige”), the rise of comparison sites and Publicis Sapient’s expansion into the insurance market.
Read the transcriptTo reap the dividends of meeting the needs of underserved customers, insurers will need to ask themselves some hard questions—as this article explains.
The relentless march of price comparison websites (PCWs) has encouraged insurers and brokers to offer increasingly commoditized products to a core group of low-risk, straightforward customers.
This approach has simply pushed the same customers through the sales funnels while identifying which of them are likely to auto-renew and accept higher-margin add-ons.
These “mainstream” customers may see more than 100 quotes on a PCW for their core insurance, but with little to actually differentiate between them besides price. This intense competition and narrow risk appetite have eroded away profit margins, and customers are now offered 100 shades of beige.
A large part of the market is still underserved and overpaying for insurance. These customers fall outside the core footprint of mainstream insurers.
This long tail contains millions of profitable customers, many of whom have no cover whatsoever in key lines of business. The cost-benefit case for serving them simply hasn’t added up for insurers. Getting to the required level of customer understanding, tailored propositions and personalized marketing has been too expensive—but things are changing.
In this multitude of profitable niches, established insurers will need to start thinking like insurtechs. Unlocking the long tail means applying an end-to-end set of capabilities in a targeted way, truly understanding the needs of specific customer groups and designing propositions around them. This will feel unusual to most large insurers, and they will need support from a flexible data and analytics infrastructure that can scale heavily without adding complexity.
Insurers will also need to start thinking like investors. Expanding footprint is not a linear process, and some forays will fail. The challenge is to monitor and maximize the rate of success while minimizing distraction for the core business. Insurers should review their risk appetite and be prepared to invest in a series of niches in a portfolio model, cutting their losses when a venture doesn’t meet its commercial goals and reinvesting in those that are more promising.
Do we have the risk appetite to experiment in new segments, backed up by the ability to build and launch new propositions quickly?
Description: Does our stack have the flexibility to analyze and ingest new data sources at pace and serve up personalized digital experiences at scale?
Can we access the research needed to understand new customers, then immerse ourselves in creating responsive propositions and UX?
Can we mobilize people from across our business around this opportunity in a targeted, cross-functional team?
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A top provider of private medical insurance (PMI) solutions, wanted a better mobile experience and greater member engagement. So they turned to Publicis Sapient, who promptly delivered a new mobile app combined with a best-in-class customer experience.
