one click, receive personalized financial tips and suggestions, plan
spending based on previous months’ behavior, get overspending
alerts, redeem location-based shopping offers, manage transactions
with voice control, and withdraw cash from an ATM using a phone
rather than a card. The app entrusts the control of money entirely
to the customer, thus providing an elevated banking experience.
Atomizing for Insurance Experience
The interactions shared between insurers and customers
have always been transactional and never relational,
and hence customer experience generally has
been an afterthought. Most of the insurance
products have been sold by focusing on one
basic human emotion—fear. In the customer’s
mind, insurance remains positioned as something
that cannot be avoided and has to be addressed with
all seriousness. This setup has confined customers to the
state of a reluctant and a relatively indifferent stakeholder in
the insurance ecosystem.
It has taken many decades for the insurance industry to wake
up from the deep slumber of customer indifference to the new
experience-driven economy. With the absence of proper customer
engagement models, the make-believe experience of an insurance
customer has revolved around limited touch points, journeys, and
the most important “moment of truth”—claims settlement. As the
business axis shifts from company-focused to customer-oriented,
the basic reference frame alters to plot where the company is
positioned in terms of the customer experience realms. Insurers
are trying to develop customer experience models from scratch
by critically evaluating all the building blocks of their business.
Insurance customers are, for the first time, being exposed to engagement models that facilitate continuous interactions.
Many insurers, start-ups, and insurtech companies are lining
up with industry-disrupting offerings that are created by questioning the customarily accepted ways of insurance. By atomizing
everything from business models to products, services, and technology, they are creating solutions that can gratify the what, when,
where, and how needs of the customers to provide an elevated
experience that is personalized and contextualized. Insurers are
starting to introduce solutions that require varying degrees of
customer participation that ranges from being passive to active.
Figure 2 gives a generic, indicative view on atomizing insurance.
The atomization initiatives by few insurers, startups and
insurtech companies are depicted in Figure 3: New Initiatives in
Insurance and the Atoms. Many of these offerings are focused on
providing the sales and service through D2C channels.
A common thread across many of these initiatives is that to
create the experience-based offerings, companies are atomizing
products that have been already commoditized and offered through
D2C channels. The perceived challenges for atomizing other
products is that customers are still dependent on intermediaries
for purchasing them and that the products are not yet D2C-ready.
Insurers with a mindset that atomization is only for D2C offerings
have not been able to atomize these products. By shifting the
focus from D2C and starting to conceptualize atomization for an
intermediary, insurers will be able to atomize these products and
stage experiences comprehensively through intermediated sales.
Offering insurance as experience is relatively new, and many
experiments focus on how insurance products are packaged, pre-
sented, or consumed, and hence the experience is predominantly
cosmetic in nature. With the passage of time, few of these trials
will succeed, stabilize, and mature, thus leading to the emergence
of competition. In due course, these atomized offerings that are
focused on staging experience will end up being selected based on
price—resulting in the commoditization of experiences.
To avoid another crowded marketplace, insurers would be wise
to find the core purpose of providing such experiences. Though
atomizing is a way for staging experience, offering a personalized
experience is also just an interim stage and not the final destination.
Insurers should create many continuous engagement models to
partner with the customers to guide them in creating memorable
outcomes that result in life transformation. In these outcome-based
engagements, the initiatives providing personalized experience and
the resultant transformation take the driver’s seat and insurance
may even become invisible. In these redefined insurance products,
the major chunk of the premium will be charged for the experience
and transformation rather than the routine risk factors.
Though insurers are always concerned about the outcomes
that impact them financially, they never heretofore owned any
responsibility to modulate them. Due to their all-pervasive presence
in the new engagement-driven insurance landscape, insurers will
be mandated to play the unenviable role of a chief orchestrator