The COVID-19 pandemic has disrupted businesses of all shapes and sizes around the world. The impact has significantly impacted small and medium businesses (SMBs) given their typically thin cash reserves and dependence on a small number of routes to market.
However, global accounting firms, KPMG has highlighted five major ways small business can leverage insurance to overcome the severe challenges of the pandemic.
High on the agenda is the need for insurers to bring SMBs more seamless and integrated digital products and services, combining value, convenience and a range of packaged benefits.
To do this, insurers need to leverage the power of data to anticipate and meet emerging customer needs, and work fluidly in a wider ecosystem of partnerships and alliances to bring related and complementary solutions.
These abilities all depend on having a Connected Enterprise that meets customers expectation and needs.
Here are 5 Approaches that can help change SMBs to Winning Businesses
1. Embracing known obstacles
What are the key obstacles that prevent customers and organizations from adapting in a changing business environment?
On the customer side, small businesses have a number of characteristics that commonly create barriers to their take-up of insurance products:
a. Security and compliance concerns
— Concerns around data security and privacy
— Regulatory requirements/ compliance
b. Technology and data silos
— Legacy systems
— Inability to track individual customers across interactions
— Difficulty sharing end customer data/analytics between channels, countries, or locations
— Lack of system integration across channels
— End customer data housed in multiple databases.
c. Strategy misalignment
— Insufficient budget
— Lack of change readiness culture
— Lack of strategic alignment between executives and middle management
d. Business silos
— Siloed business units
— Inconsistency in pricing across channels
e. People/process misalignment
— Lack of qualified staff
— Lack of a cross functional end customer experience team
— Internal processes that don’t align with our strategy
— Lack of alignment with third-party partners
— Brokers/agents who want to minimize any interaction between us and the policy holder.
2. Focusing on Experience Expectations
Sustainable growth depends on a fundamental understanding of where to focus and what to adapt to be more relevant, accessible and affordable. This requires understanding market signals, competitive insights and translating them into tangible products, services and ease of interactions.
3. Adapting the Business Model for Sustainable Growth
There are many reactions and approaches that different companies are taking, and here is a summarized three of the most effective adaptations and shifts in business models.
a. Modular and tailored business models: Unbundle general liability and business insurance policies to provide more modular options that are aligned with specific professions and sub-industries.
Include more wellness, planning, and prevention services related to the policies.
Innovative products designed to be more modular that customers can select and opt-in for coverage and features they require, at price points that suit them, building their own bespoke packages.
b. Digital first ways of working: Easier to understand and more accessible products and services.
Provide options for seamless automation or access to personal help and advice across the relationship purchasing, maintaining, renewing, and receiving services and resolving claims.
Make it easy, make it quick, and help me keep track. Better integrate marketing, sales and operations.
Make the most of automation platforms, process efficiencies, data insights, and aligned and empowered workforce.
c. Affiliate embedded Products & Partnerships: Offer insurance products at point of purchase or specific point solutions for expanded sales channels and ease of purchase.
Expand and integrate agents, service providers, and partners across the ecosystem to focus on core competencies and optimize sourcing.
4. Adapting to a Connected Operating Model
Extend the positive impacts through the wider market ecosystem. In KPMG’s experience, success comes from investing in the right capabilities that together create a more Connected Enterprise.
There are eight key capabilities that help to deliver significantly greater impact and higher ROI. These include:
a. Insight-driven strategies and actions
b. Innovative products and services
c. Experience-centricity by design
d. Seamless interactions and commerce
e. Responsive operations and supply chain
f. Aligned and empowered workforce
g. Digitally-enabled technology architecture
h. Integrated partner and alliance ecosystem
5. Prioritizing connected Insurance Capabilities
The business model of the insurance organization will dictate the relative value and priority of each of the connected capabilities. The eight capabilities are enterprise-wide and will align the operating model to focus on delivering value to the customer and the business.