Riding the Whirlwind

Strategic Interactive Marketing for the Insurance Industry

Key Points:

Business, including insurance, has a problem in meeting these new demands.
 

Customers adopt the new modes of behaviour patterns at different rates but existing infrastructures cannot be eliminated overnight.
 

Which mediums will dominate is unclear. New technology is risky.

3.3 Industry Response

All the stages outlined above provide increased opportunities for financial services suppliers, but equally failure to adapt to these changes could lead to loss of market share.

3.3.1 Changes occur over time, probably in a fragmented way:

• different consumers move at different rates.
• early adopters demonstrate new ways of buying and followers quickly replicate these.
• laggards may be a problem for established players (e.g. cash collections by industrial insurers).
• new technology provides opportunities for innovative delivery of information, products and services.
• some new technology leads to cul-de-sacs and write-offs.
• unclear legislation does not inhibit adventurous suppliers. They aim to establish new consumer behaviours both as a lever to update legislation as well as ratifying their tactics.

Change does bring opportunities which if not taken will be seized by competitors.

- An Educational Role -

3.3.2 Opportunities include:

• an education role to help consumers adjust to the new era.
• collaborative working with consumers and retailers to identify emerging and unsatisfied needs.
• developing a range of simple commodity products that consumers find easily to purchase.
• greater transparency to raise consumer confidence.
• developing a range of more complex products that are easily customised to suit individual needs and aspirations.

Intuit, developer of the Quicken home accounting packages, is helping consumers gain confidence with financial services. They are even selling insurance! Note the Visa banner ad..

There are structural and image problems across the insurance industry.
 

There is an emphasis on cost reduction, cost justification, and on delivering results in the short term.
 

There are internal problems with existing technology, the calibre of staff and culture.

3.3.3 Failure by providers to adapt could be due to a number of reasons. As well as the failure to seize the opportunities, other reasons may include:

• being unable to rectify a tarnished image that has emerged as a result of mis-selling pension products.
• being unable to justify value for money as a result of the need to be open with commission costs.
• not providing consumer choice in product and service delivery.

- Many Organisational Issues -

• not adapting internal organisational structures, business processes and IT systems to support the new delivery mechanisms.
• not exploiting the mass of existing customer data.
• not changing the organisational culture so that all parts of the organisation feel responsible for customer service.
• not ensuring that all customer contact points understand that they have a marketing role both in:
  • realising the expectations of the marketing messages, and
  • being a conduit for ensuring that the activities of the organisation stay abreast of customer needs.
• not incorporating greater flexibility and faster speed of response for the development of new product and new delivery systems.
• spreading resources too thinly.

There are numerous choices with technology, business models and organisational structures.
 

Without a clear Vision and frameworks then it's easy to dabble and waste resources.

- Many are Dabbling -

• dabbling in new developments without clear objectives.
• not developing suitable strategic alliances with both suppliers and distributors and perhaps even competitors.
• not outsourcing or withdrawing from activities no longer appropriate or economic.

All customer contact points have a marketing role.

Note: we intend to provide a page of more current statistics.
 

Recent Net Commerce Stats
Commerce on the Internet		1996	2000
	UK Internet Advertising	$1bn	$70bn
	UK companies on the Internet	25%
	UK companies using e-mail	41%
	UK companies with Web site	17%
	US large companies spending > $1m on Intranet and > $1m on Internet in 97	17%
Shopping on the Net (WW)		1996	2000
	Travel Industry	$126m
	Computer Industry	$140m
	Estimated year 2000 total		$1.6bn
	Chrysler car sales on-line	1.5%	25%
Sources: Internet Business May 97 referencing   Jupiter Comm. Feb.  97; Internet Magazine May 97 referencing DTI/NOP survey Feb. 97; Computer  Intelligence survey; Forrester; The Economist

Note: this is not a definitive list but one quickly compiled without
too much effort. There are no doubt many more brokers.