Upheaval and uncertainty have been two key themes for 2020 – all triggered by the pandemic, which for some time threw the economy into a state of disarray. Consumers have also had to cope with enormous shifts in daily life patterns, from where and how they work to what and how they buy. Now, as we start to look towards the end of the year we’re beginning to see what a COVID-free future might look like. For any industry, especially insurance, getting to that place is going to mean being responsive to the way that consumer behaviour is changing.
Consumers are changing the way that they buy
Buying habits – and what people choose to spend their money on – are shifting in the wake of COVID-19 and this is something that is essential for the insurance market to bear in mind. Many people are re-evaluating products or services that might previously have simply renewed every year, whether as a result of cost considerations or looking for greater value. Others are looking for a more satisfying buying experience and are rejecting those companies that are still marketing and selling using the same tired old routines. In order to avoid being sidelined by consumers, reacting to this change in buying habits and priorities is going to be essential.
Service expectations are different
The insurance industry has had some challenges to overcome through the pandemic, especially when it comes to policies that didn’t extend to cover COVID-19 or where there was any ambiguity. Consumers – personal or professional – who have experienced being told that the policy they had paid for did not have any flexibility (even if that was legally correct) are unlikely to be renewing for the future. Many have compared their experience with insurers who were rigid about payments to banks that allowed for deferral of loan or mortgage payments. Others who have found their chosen provider was able to accommodate them may feel a renewed sense of brand loyalty. There is certainly a theme that more is expected of brands now when it comes to meeting service expectations.
Disruption is likely to be ongoing
COVID-19 has caused one of the most significant market disruptions in recent history and – even if the worst is over – the ripple effect of this is unlikely to stop for some time. Some experts are predicting market disruption for the next 12-18 months, not just because of the impact of current restrictions and the knock on effect of lockdown but also because we have changed as a society and adjustments need to be made to counter this.
Digital is essential
Although a transition to digital delivery and service was already under way, the pandemic has fast-forwarded this around a decade into the future and many enterprises now need to rush to keep up with the shift this has caused in consumer expectations. Technology clearly has a lot to offer any business model when it comes to optimisation and the time to embrace this is now.
Reacting to changing consumer behaviour is going to be essential for any business when it comes to surviving the impact of COVID-19.