Slow, frustrating, disconnected. These are just some of the words I hear regularly from super funds about their experience with their group insurance cover. It’s not surprising when you consider how the operating model of the group risk market compares with other more digitally mature financial service providers, such as banks, health, and general insurers.

We know that 92%1 of people under 35 complete all their financial transactions online, through apps and other digital interfaces. We also know that in 3 years, 75% of the total workforce will be digital native millennials2. We know all this, which is why we talk about the power of digital transformation in life insurance.

As an industry, we recognise the power of data and the amazing new ways in which risks can be understood, managed, and offered to super fund members on a more affordable basis. The discussion typically focuses on building new predictive models, eco-systems, and acquisition channels. However, customers must currently navigate through siloed systems and historical processes that can often result in difficult interactions and long delays in claim decisions.

We are starting from a very low base. We must focus on improving the foundations of our industry and basics of our customer interactions and experiences before we can fully harness the power of data and technology. This is the journey that MetLife has also started first by developing deep understanding of the customer experience and finding ways to create better interactions for them.

When you consider the value chain of the group risk market, there are many inefficient and product design limitations that lead to sub-optimal customer outcomes. The traditional business models must continue to shift to better recognise the importance of customer needs and the desire for instantaneous and frictionless customer experiences. Technology is a key element to achieving this and digital transformation is set to change both individual business such as MetLife and the industry as a whole.  

Integration between stakeholders and digital first products and services are key to improving our customers’ awareness of their insurance needs, and the actions needed to solve for these needs. Importantly, integration also provides the basis for a long-term trusted partnership, which we’ve proven through working hand in hand with our super fund partners

Enable customers to engage when and how they want, keeping critical human interactions for where they matter the most

Group Insurance must become more personalised and tailored to the needs of customers, both in terms of the powerful protection safety net our industry provides, and in relation to the services we provide and our interactions with customers.

Digital first doesn’t mean digital only: A true omni-channel experience will allow customers to interact when and how they want. The objective is to build convenient and trusted connections with our customers. We know that being a digital insurer means we also need to provide personalised interactions where we demonstrate care and compassion that is a hallmark of our business.

Creating mutual value: Solving more protection needs through increasing our relevancy and efficiency

Risk awareness and insurance engagement remain the most important challenges facing our industry. Leveraging off existing data and embracing digital technology can help ensure products are more affordable and more relevant across a customer’s life journey.

Whilst recent reforms have protected customers against the risk of poor outcomes, it has also resulted in many no longer being covered. It is now common to see approximately 50% of super fund members covered by default cover. Market growth is flat and future growth is dependent on our ability to understand customer needs and build more efficient products, new education tools and acquisition pathways.

Digital transformation is more than just technology, it’s a mindset and capability the industry must develop

The group risk market in Australia has been built on auto-enrolment. We don’t have a strong track record in generating customer demand through compelling value propositions and we must evolve our skill sets and approach to product development.

We need to think differently. We need to invest more in understanding customers and have the courage to change our approach from employment-based risk proxies to a sophisticated risk-based approach built from data and technology.

But data and technology alone will not provide the transformation our industry desperately needs to remain relevant to customers and to ultimately grow into the future. Customer centricity and an innovative digital first mindset will help overcome existing barriers that prevent acquisition and protection of more customers.

It’s time to start small. But we must start now.

Dean Mulheron, Head of Group Product, MetLife Australia

 

Reference

  1. Commonwealth of Australia (Australian Communications and Media Authority), 2021.
  2. Digital Marketing Resource Centre, Impact of Digital Natives on Future Business