Too many insurance companies today think digital channels and eBusiness are about adding yet another distribution channel to existing ones. Moreover, they think of digital channels as being about cutting costs, but this is only part of the story. Their true value lies in the fact that customers love digital touchpoints (including mobile phones and tablets) because they perceive them as the gateway to better priced products and to greater convenience. Insurance companies should be brave enough to face the issues of dual pricing and cannibalization or somebody else will disrupt their business. In the Dutch market, for example, companies like Brand New Day and Inshared are combining Internet-only business models with aggressive marketing to challenge the revenue models of the incumbents. eBusiness and channel strategy executives should drive digitization within their companies and:

  •  Get organized and agile. Agility is the driving factor for next-generation insurance companies. The rapid pace of technology change will make the digital agenda and the corresponding organization the top priority for insurance companies in the coming years
  • Mitigate channel conflicts with more support for agents. Agents remain a critical distribution channel for most large insurers in much of the world. Migrating to self-directed channels may risk cannibalizing their existing business. eBusiness and channel strategy executives must digitize the relationship with their agents to make them more productive.
  • Drive customers to today’s digital offerings. eBusiness and channel strategy teams should encourage customers to use self-service digital touchpoints. Cost control is forcing companies to develop more self-service processes; as these become simpler, it's easier for customers to "do it themselves." It's not only cheaper but also adds more convenience and a better user experience.  
  • Build the next generation of digital insurance. Customers expect to be able to interact with insurance companies on a single customer journey via an increasing number of touchpoints, such as mobile devices and social networks. eBusiness and channel strategy executives need to develop a new generation of digital insurance that is SUPER: simple, ubiquitous, personal, empowering, and reassuring. For more details, read our report Next-Generation Digital Financial Services.
    These are exciting times for those companies that understand the true pace of the digital revolution. Firms like Apple, Google, and Facebook are driving your customers to new ways of interaction — ones that they are willingly embracing. You should take note! Read more about this in our reports Trends 2012: European Insurance eBusiness And Channel Strategy and Trends 2012: North American Insurance eBusiness And Channel Strategy. Please call or email me if you'd like to know what it means for you!