Why Transparency Could Change Insurance as We Know It
Let’s be honest: transparency is scary. No one likes to show their hand until they have to. That said, it’s also really valuable – and we’re going to be seeing a lot more of it in the future. In fact, transparency could be changing the face of insurance as we know it.
Insurance is moving (or being pushed) toward transparency
One of the first reforms to be implemented by the Affordable Care Act was the requirement that insurers must present the pricing and benefits of their health plans in a standardized format, so consumers can compare policies in an apples-to-apples sort of way. Now, in a new stride toward transparency, the law is requiring hospitals to make their prices for medical services public.
Then there’s Google Compare. Perhaps the most visible beacon in the march toward transparency, this aggregator grabs rates from various auto insurance carriers and sets them, side-by-side, in front of consumers.
That’s disruptive. Historically, the insurance industry has not been known for its transparency. Given that knowledge is power, it’s no secret why: there are advantages to be gained in playing a more opaque game.
But like it or not, it’s getting easier all the time for consumers to find straightforward comparisons of the products and services they’re shopping. That knowledge is empowering, and they’re thirsty for it.
“It’s well known that the modern consumer wants quick and relevant results based on their online search intent,” said Lauren Yildirim at Captricity. “And of all the people using the internet, we now know that 73 percent use it to gather direct information on their insurance options, and 65 percent of new business in auto insurance is derived from comparison shopping.”
Transparency is here to stay. The good news is, it’s bringing some important opportunities with it.
Three benefits for insurers playing the transparency game
1. Customer satisfaction. “Instead of being scared by transparency, businesses should embrace it as way to improve service and increase customer loyalty,” said Robert Craven, CEO of MegaFood and contributor to Entrepreneur Magazine. For example, when a restaurant allowed cooks and customers to see each other during food prep and dining, Harvard Business School found a 17 percent spike in customer satisfaction.
2. Lead quality. Playing the transparency game can also improve lead quality. Aggregated comparison websites like Google Compare vet customers with a series of pre-qualifying questions. Those who move deeper into the buying process are “extremely qualified,” Yildirim said, which not only provides insurers with better leads, but offers them with deeper insights from the data captured during the process.
3. Millennial attraction. Lest it go unsaid, transparency is a big one for millennials. Today this is the demographic that’s most desirable – 60-70 percent of Google Compare users are between 20 and 40 years old, Yildirim said – and hardest to reach (both distracted and skeptical).
In short, greater transparency is not to be feared. It’s to be harnessed. Just make sure you have the insurance technology to compete in a market moving toward direct-to-customer selling and transparency at large: Click here to learn more about Silvervine – a technology that achieves those goals and more.