* By Ricardo Lima
Analyzing and comparing the behavior of generations of consumers is not simple. What will be the distribution channels? What and how will they consume insurance products and services?
Before, generations were formed every 25 years, today a quarter of a century is an eternity. In the digital age, everything changes very fast, so the big challenge is to be prepared to understand and meet these transitions from the insurance point of view.
This article confronts Insurance vs. Technology vs. Consumption of Generations, from the perspective of the insured (individual), it is necessary to understand the behavior of the generations and identify who the future consumer is and who will be.
Generation definition (BR standard)
Generation X (1965 to 1984) - Transition generation that witnessed the beginning of the technological revolution, saw the personal computer appear, had access to the internet via modem cards and the first broadband providers; got to know the first cell phone (voice) devices and the first VOIP services.
Generation Y (Millennials - 1985 to 1999) - Generation of great technological advances, was born with the internet developed, studied and developed with this native culture itself. The concept of shopping has changed, the smartphone has emerged. Live connected 24 hours a day on Social Networks. The era of sharing and services has begun.
Generation Z (2000 to the present) - Called "Nativa Digital", did not know the world without the computer, the internet, the smartphone. It is the generation that lives sharing everything imagined, their travels, their films and music. He prefers to pay for services and not waste time managing idle goods.
Who the new policyholders are and how they will be
The main insurance buyers (in 2019) are, in order, Generations X, BB and Y, but these positions will be reversed in the near future, with the more significant entry of Generation Y. Insurers need to be prepared to offer adherent products, this that we haven't even started to talk about Generation Z.
The current products of the companies, the legislation and the systems of sales and insurance management are not adherent to the needs of Generation Y. This generation is digital, it moves all the time with the smartphone, and generates its own telemetry, makes cardiac monitoring, runs with a performance app and learned to share and pay for what you use, not what you own.
How to distribute, price and what to offer?
Understanding the behaviors and trends of the generations, especially Y (focus of this article), we have to analyze three fundamental points in insurance: how to distribute (sell), price (tax) and what to offer (coverage).
How to distribute (sell) - The broker will continue to be essential, but using all available channels will also be mandatory for the distribution of personal insurance, such as social networks, websites, Apps, agents, stores, physical counters, internet banking etc. Omnichanel “in the vein”.
How to price (tax) - Certainly the most sensitive item of this transition, more and more individualized and based on the habits and needs of each person. The more information, the more assertive the insurance rates will be. Average taxation will have a natural rejection of Generation Y.
What to offer (coverages) - The “product” leaves the scene and enters the “basket of coverings”, to be offered and / or chosen according to the individualized demand and the time of exposure to risk, or even, as mentioned , in the concept of paid for use.
Speaking of technology, how to sell and manage new businesses?
There are no businesses that can be managed without using the famous Information Systems and their alphabet soups (CRMs, ERPs, BIs, BOTs, AIs). Systems practically have life, they are true mutants, and they need to be adherent and flexible to adapt to changes in scenarios, laws and generations.
The current sales and portfolio management systems do not have the functional architecture necessary to mix offers and, mainly, to manage the long life of a policy.
The sales systems do not yet have a focus on the offer, in the assembly of the best “basket of coverages” for this insured, at this time of his life with the appropriate capital and premiums. The current technology is not fit and is still in the tabulated culture of insurance by the average.
In the management systems, the situation is much worse, since most of them are archaic of technology and architecture, still with a philosophy of insurance “products” oriented to Generation BB and X, monolithic and with very high maintenance and support costs, because , rely excessively on experts in the system to provide continuity.
How should the information systems be to serve Generation Y, and transition to Generation Z?
They do not yet exist, they are being designed with modern concepts of micro services, APIs, and groups of publications. But they must use technologies that allow insurers to monitor the applicant and the insured throughout their life and map all their moments.
They must be disruptive from the business point of view, with a focus on the insured, their journey and need, non-structural of the policyholder / policy / product / coverage. Technology companies must be specialists in insurance and have employees who are knowledgeable in this market and must also be attentive to insurtechs and their creativity.
Sales and pricing systems need to be aligned with social networks, collect personalized information, have the intelligence to make the best offer through the distribution channel that best reaches the consumer.
Management systems must break paradigms, make a mix of coverage and services, as well as open horizons, for example, collections, in times of virtual cards, pick pay, cryptocurrencies, among others.
In short, insurers need to prepare for the new and invest in new solutions that serve the new generations, think and develop their platforms with a view to services and then connect them. Insurance companies that have this vision and opt for this investment will certainly start out ahead and will have a broad competitive advantage in the future.
* Ricardo Lima is Director of Pre-Sales at Sistran Informática
Warning: The opinion presented in this article is the responsibility of its author and not of ABES - Brazilian Association of Software Companies
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