The insurance industry for a long time has been considered to be a largely bureaucratic industry. Paperwork, and a lot of it, have been the typical business mode. That’s now changing, and New Economy insurance companies are taking advantage of technology to grab market share from the old-style insurance companies. All insurance products including car insurance and home insurance are being affected
Another thing being affected is consumer perceptions of insurance policies and options. Insurance can be expensive, and commonly comes in a One Size Fits All mode which are definitely doesn’t fit everybody. The traditional insurance industry is in a situation where its products frequently don’t mesh with modern lifestyles and insurance needs.
The world has changed since the original consumer insurance products came on the market back in the 1960s. People simply don’t live that way any more. Their employment, modes of transport and lifestyle environments are completely different. The bureaucratic approach to policy management isn’t exactly popular either, being approximately 50 years out of date and staggeringly inefficient. In the days of snail mail and hard copy, these methods may have been best practice, but these days they could be appropriately described as worst practice.
Cost and dissatisfaction with products have created major upheavals in the market, and the new model insurers are cashing in. These insurers work on the typical new economy basis, with very low overheads and in a paperless environment. Consumers can get car insurance quotes online and they get backup from customer support systems both on the phone and online.
The new model insurance:
These new policies are extremely flexible, and customers can actually manage their own policies online. A car insurance policy for example can be tailored to meet not only the number of drivers using the car, but the type of car usage. The new model insurers make a point of offering discounts across the board with these products, and that strategy is definitely working.
Going paperless has also drastically improved profitability for insurers. Administration of insurance policies is by definition expensive, and these costs are invariably passed on to consumers. Consumers do not appreciate this fact, and if they can get cheaper insurance, that’s exactly what they’ll do. Given the opportunity to get better insurance as well, and the result is a stampede.
There’s a fundamental fact about this situation which shouldn’t be lost on anybody experienced and marketing. The new model insurers have literally created a better product range, in an environment where demand for improved and customizable products had already created issues for consumers.
It may have been inevitable that the new products would have a major impact, but what’s stranger is that the insurance industry since been remarkably slow to respond to this new challenge. The old-style policies continue to stagger along, regardless of consumer complaints and dissatisfaction. That’s lousy marketing, and it’s definitely hurting the bottom line of some major corporations.
The sooner the industry gets its act together and start concentrating on meeting consumer demand, the better. The highly competitive new insurers are tearing into the market, and the old insurers will definitely go the way of the dinosaurs if they’re not careful.