When it comes to insurance firms, the policies and products used by their customers are often central pillars of their long-term financial strategy. Providers have found a lot of success and improved their competitiveness by operating this kind of business model.
Unlike other firms who are being forced to revamp their central speciality as a business, the insurance industry has the advantage of being able to easily add additional arms, like digital wealth management, without disturbing many of its existing services.
What is clearly vital now, is for insurance firms to take stock of the immediate opportunities before them.
For the customers, for the business
The longer-term, low-touch relationships familiar to insurance pose issues like a low rate of communication with customers and a dormant client base who might not bring new business for years at a time. Rather, with digital tools, you can offer an unprecedented degree of engagement and access to these customers to both interact with their existing policies and to encourage the adoption of more products too.
Unlike increasing your capabilities in other ways, digital platforms are not a zero-sum game - they can do just as much, with fewer resources and time spent.
The competition to angle your business as digitally-capable will be considerable, given a ratio of lower costs to increased benefits. Digital tools are less of a luxury and more table stakes for the new generations of people in the UK who are beginning to make use of them.
Insurance firms that wish to fend off their competitors have to find new routes to diversify, but equally, to try and position themselves in the center of their clients’ financial plans.
Digital wealth management platforms offer a low-cost route to managing a wider aspect of a customer’s finances, offering them the customisation, access, and convenience to which they have grown accustomed.
Beyond a concept
Don’t forget that this technology has been used by retail Fintechs already to attract a younger, more mobile audience. This isn’t an untested gamble but a precise investment towards modernising a business value chain.
If anything, these digital communication applications are quickly becoming performance indicators for insurance providers. It has great potential, but many in the industry are already aware of this and are moving quickly, which adds a degree of urgency.
Diversification is positive for business and customers alike. It produces more robust business structures and giving clients access to more services that can benefit their financial future. Just looking at new ways of skinning the insurance cat is not going to engage the new audience you are looking for but cool savings and investment tools could be.
Seeking out and adopting digital wealth management arms can be a game-changer for insurers because it allows them to become more competitive, without the same cost to their resources that a scale-up like this would normally produce.
Drop me a line if you'd like to chat more or would like to see our case study on how we helped an insurance company diversify their offering.