Rise of the sharing economy

IAG Chief Executive Australian Business Division, Ben Bessell, presented on the impacts of the Sharing Economy at the recent Steadfast Convention, exploring how the sharing economy will impact insurance, broking and society in general.

“The sharing economy is based on a model where customers have more power than ever, are more informed than ever, and transactions are more transparent than ever,” explained Ben.

Ben outlined a number of key impacts the sharing economy will have on insurance advisers, including:

Clients will expect bespoke “market of one” service. Brokers will need to customise their advice to meet their customers’ expectation of bespoke solutions that reflect their needs and adapt to their changing circumstances. Clients designing their own products and personal experiences will become the norm, and they will increasingly expect their needs to be anticipated before they ask.

Clients will come to the table as the instant expert. With unlimited information about products and services, customers will be much further advanced in the purchase process when they contact a broker. They know more and expect more, which makes delivering real value even more challenging. Customers will expect advice and insights that they can’t get themselves through Google or from their peers through crowd sourcing ideas from Facebook or Twitter.

Customers will be avid promoters and detractors. Social media and online reviews will drive brutal Darwinian selection with customers ‘swarming’ together to reward brands that deliver and punish those that don't.

A customer’s experience is a more powerful driver of loyalty than price. Investing time into improving customer experience is now more important than ever with the changes in technology.

Ben emphasised that the role of insurance advisers and brokers would continue to be valued and important.

“Brokers will continue to be trusted advisers to their clients, however the way they provide that advice and the types of advice clients expect may shift over time,” he said.

“Increasingly customers will expect their insurance advisers to be technologically adept and work with them through their channel of choice. Brokers who provide great advice or a bespoke customer service experience will thrive.”

In a world of online recommendations and reviews, businesses which meet and exceed customer expectations are going to see an increase in business.

 “The sharing economy is just one of many technological and social forces leading us to re-imagine our industry – building insurance solutions for this new market is challenging and exciting.”

Ben encouraged brokers and insurers to work together to invest and adapt the changes brought about by new technologies, and find ways to build the customer experience that our future customers will be looking for.