Traditional insurance carriers are facing an imperative to adopt digital capabilities, and many are apt to do so. McKinsey spoke with Yolanda Zono, a partner in the Madrid office, to discuss how digital has changed the insurance landscape and what traditional insurers can do to stay ahead of the curve.
McKinsey: How is digital impacting insurance delivery?
Yolanda Zono: Digital adoption in insurance still lags behind other industries. According to our Findla research, about 30 percent of insurance customers use digital to interact with their insurer, compared to 70 percent of customers in banking. However, the purely offline subscriber is gradually disappearing, giving way to digital customers, which account for 24 percent in the United Kingdom, 9 percent in Germany, and between 2 and 4 percent in other Western European countries for non-life insurance. eat.
Hybrid customers are the largest segment today. In 2020, these clients accounted for more than 50 percent of non-life clients in Europe, including clients who research online and contract through offline or remote advisory services – particularly Southern Europe. A growing trend in bancassurance.
McKinsey: What opportunities do the evolving context bring to traditional insurers?
Yolanda Zono: Traditional insurers have the advantage of establishing relationships with customers. Digital momentum has created an imperative for traditional insurance carriers to re-energize and deepen customer relationships, and has provided a vehicle for reaching potential customers better and more easily.
The purely offline customer… is progressively disappearing, giving way to digital customers.
To take advantage of the opportunity, insurance companies should do two things. First, invest in providing customers with a unique experience by offering digitally enabled and personalized sales and services. And second, they should shape their revenue growth agenda to include bold steps. These may include building a digital sales engine with omnichannel lead management, shaping a unified value proposition beyond insurance, and leveraging distribution partnerships with digital players and non-insurers such as utilities, telecommunications, or real estate agents. Is.
McKinsey: How can insurers establish a successful digital sales distribution model?
Yolanda Zono: Insurers must act on two levels. First, they must learn how to enhance digital sales performance to drive more and better digital traffic for both new and existing customers. They can tap into tools like dynamic budget allocation and micro-segmented analytics use cases on paid channels. They can improve online and online-to-offline conversions through excellent customer journeys in areas such as motor, home and term life, and personalize and index multichannel campaigns and remote sales.
Digital momentum has created an imperative for traditional insurance carriers to re-energize and deepen customer relationships, and has provided a vehicle for reaching potential customers better and more easily.
Second, they must create a digital sales backbone by implementing a marketing technology stack that enables 360-degree client views and fosters campaign automation. This backbone can allow insurers to use data and analytics for real-time decision making and sophisticated targeting and establish capabilities and operating models that drive speed, omnichannel expertise and innovation.
Several insurers have already laid the groundwork for scaling digital sales and delivered impressive results – some sales up to four times – in just a few months without impacting offline results.
yolanda zono Partners in McKinsey’s Madrid office.