For customers, insurance has long been a hands-off relationship. Most commercial insurance customers only interact with their insurer when they need to obtain coverage, renew existing coverage or file a claim.

As our personal and business lives move online, however, customers’ expectations have changed. Accustomed to personalization, easy information access and quick responses from other online businesses, customers expect the same features from their business insurer — and they’re willing to switch insurers until they find it.

The COVID-19 pandemic has cast this in stark relief. With millions of Americans suddenly experiencing hardships, business owners — and Congress — have turned to insurers for help.

But this isn’t a claims conversation. After all, it’s difficult to make money available for risks unaccounted for in policies that were already underwritten. Rather, this is a conversation about responsiveness. By building a more agile and responsive customer relationship, commercial insurers can also build customer loyalty and attract new business.

The Customer is Always First: Changing Customer Demands in Insurance

“While technology is transforming the insurance industry, customers are becoming just as disruptive,” say David Rush and fellow researchers at Deloitte.

According to a Deloitte survey, 45 percent of insurance industry executives believe changing customer expectations and needs will provide their top growth challenge over the next three years.

Customers Expect Personalized Service

Customers expect personalization, especially in the form of tailored notifications and prompts delivered to their smartphones. Customers who have already integrated information like traffic and weather updates into their daily digital lives are more likely to accept similar messages from insurers targeted at helping them reduce risk and save money, say Peter Manchester and fellow researchers at EY.

For insurance companies, customers’ preferences for personalized messaging offer a chance to improve the customer relationship by improving risk analysis. “The next major innovation opportunity with data and analytics for insurers involves rapidly identifying and precisely measuring risk, and then using that insight to proactively meet customer needs,” they write.

Customers Expect Today’s Risks to Be Covered — Now

For decades, business liability coverage took a one-size-fits-all approach. As the economy has continued to emphasize gig work, part-time work and a blurred boundary between personal and commercial use of cars and real estate, yesterday’s liability coverage options are an increasingly poor fit, says Jay Bregman, founder and CEO of on-demand small business insurance policy provider Thimble.

Business has changed, and so have the risks that require coverage. Meanwhile, customers’ ability to receive services instantly in other industries has changed their expectations of insurance coverage as well. Because insurance coverage doesn’t require consumers to possess a physical object, consumers don’t see why placing coverage should take days to complete.

“The modern consumer (and broker) expects an instant, on-demand product. Not days. Not hours. Not minutes. Seconds,” Bregman writes.

The Elements of a Strong, Agile Customer Relationship

Insurers who seek to respond to changing customer demands must address one question: What does a strong, agile customer relationship look like in a rapidly-changing digital world?

Answering this question enables insurers to move with and ahead of customers. Insurers can meet customers where they are now and better predict what customers will need and want in the future.

Connect Early, Often — and Digitally

First, a strong, agile customer relationship focuses on connecting with customers via digital channels. A study by management consultancy Bain & Company of small business owners’ insurance buying habits found that “consumers who own at least one connected device interact with their carriers an average of 19 times a year, more than five times the frequency for customers who do not own any connected devices,” say Henrik Naujoks and fellow Bain partners.

Commercial insurance customers who communicate with their carrier more frequently also tend to stay customers longer, buy more insurance products from the same insurer and recommend that friends or colleagues do the same.

Embrace Data

Smartphones, embedded sensors and a global network of interconnected devices make it possible to track, capture and analyze more data than ever. The rise of big data also offers opportunities for insurance companies that take a data-first approach, says Tim Ogilvie, founder of strategic service innovation consultancy Peer Insight.

Embracing data’s ability to personalize coverage and speed the process of purchasing or renewing that coverage is a must for insurance companies seeking to keep up with the demands of today’s small business owners.

“Any business that wishes to stay competitive in today’s marketplace must meet customers where and when they need something,” says Jonathan Yundt, senior presales architect at Hitachi Solutions America. A robust digital platform offers one place to start by modernizing legacy systems and giving insurers the tools to allow other digital options like artificial intelligence, predictive analytics, mobile service and online chat options.

Realign Your Methods With Your Mission

One of the biggest challenges for insurers in the coming years will be to embrace new ways of doing business that align with the demands of a changing world, say Will Pritchett and co-authors of a KPMG’s “Insurtech 10: Trends for 2019.”

To meet customers where they are and leverage digital tools to do so, insurers may need to rethink their own internal structures. Methods used to form teams, respond to customer needs and place insurance coverage that worked in the past may not meet customers’ demands in the future.

Insurers may not have to completely overthrow their existing methods, say Pritchett and co-authors. Insurance companies should, however, be willing and able to welcome radical change where necessary. “Decoupling from existing governance structures can be uncomfortable, but organizations must push for this in order to break down the cultural obstacles that are holding them back,” they write.

Best Practices for Meeting Customer Demands

Selling insurance for insurance’s sake is a tough proposition in today’s marketplace. Today, business owners want carriers who help them meet their own goals — and who will go so far as to build ecosystems with non-insurance providers in order to do it, says Naujoks.

“Insurers will need to move away from focusing on providing a product and towards an emphasis on what the products enable customers to do,” writes Rush. For example, a small business owner may see workers’ compensation coverage as a tedious chore but may be very responsive to messages that focus on injury prevention and helping workers maintain or regain their health.

Since customers are less interested in coverage for its own sake, insurers will need to focus on speaking to customers’ true interests, such as the success of their business. Building a digital ecosystem allows commercial insurers to address these interests more readily. The ecosystem, with the insurer at its core, becomes a one-stop shop to improve business success, making it a more attractive proposition for customers.

Ultimately, putting the customer first when choosing new digital tools and platforms will enable agile relationships. “Carriers that can envision the future and have the courage to invest in thoughtful, customer-focused transformation will overcome today’s threats and seize the next wave of opportunities,” say Isabelle Santenac and fellow members of the EY Insurance Advisory team.

Commercial insurers with an agile approach to customer relations position themselves to form and maintain these relationships in the long term. A reputation for prompt, personalized customer responses is required in order to build strong customer relationships.

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