McKinsey: Why is an omnichannel experience important?
Eric Gewirtzman: It’s important because although digital will affect the servicing of the customer, it will affect customer acquisition even more. Insurance is being influenced by the way consumers purchase other types of products and services. They say, “This is the type of shopping experience I want to have in insurance too.”
Insurance customers are already moving between various channels. But there’s a big difference between being multichannel and being omnichannel. Just because carriers have, say, an exclusive agent channel, an independent agent channel, and a website, doesn’t mean they’re omnichannel. Too often, consumers will get a different experience and different results depending on which channel they use. This has to change. If there is no awareness between the channels, sales are lost. That’s a problem not least because it’s very expensive to market to a customer through brand awareness initiatives, online marketing, or television ads and then not convert these investments into sales.
McKinsey: How do you see the future role of the agent and broker?
Eric Gewirtzman: The agent population will consolidate, but remain substantial. Even millennials will do their research online but, before they buy, they will still want that grown-up to advise them. So we believe the role will evolve.
However, the sort of agents who, when a customer walks through their door, say, “I’ll get back to you in a week,” will not survive. I don’t know if the timeline is three years or five, but they will have to adapt to the immediacy offered through a digital environment and a new way of doing business.
Agents need a way to bring customers to their doorstep. And customers are looking for that personal service. There are digital ways to combine the two and if the traditional agent doesn’t have the digital expertise, there are others out there that will bring it to them. So the role of traditional agents is important, but they’ll have to retool to get to where the consumer wants them to be.
As for brokers, their large customers will still view them as trusted advisors, as their risk managers. But if brokers want to grow, they have to go into the mass market — the high-transaction, relatively low-premium segment where most of the changes in distribution are occurring — and I don’t see any of them really gearing up for that challenge.
The case for digital reinvention
McKinsey: Can you explain your views on the need for speed and learning to fail?
Eric Gewirtzman: At BOLT we can make decisions fast because we don’t have a huge hierarchy. Every week we make business decisions where we’ll say, this segment doesn’t make sense, but we’re seeing the market move to that segment so let’s put more investment into it. Some in the industry may think we’re zigzagging, that we haven’t figured out what we want to be. But far from it. Our answer is, we know who we are and what we want to be. We focus on distribution. But that doesn’t mean we know how we’re going to look two or three years down the road.
When we see opportunities, we pounce. And my guidance to our team is, you won’t be penalized for failing. You’ll be penalized if you fail over a long period of time. So fail fast. But that is a culture many insurance companies find hard to foster. With its regulatory environment and culture, the insurance industry is slow to change.
People are afraid to make a leap of faith. And if they fail, they feel they’ll be kicked out. In many cases, they are. It would be odd for me to say that fostering a culture of failure is a good thing, but I believe it is. Try, try, try, fail fast. You’ll find what works. Put the pedal to the metal and run with it. I think that’s a strand of DNA that we don’t see a great deal of in the insurance industry.
Agile is critical to the way we work and we move fast. It’s a mindset. We develop processes using agile methodology. We do not revamp and reengineer a whole process over two years and hope it will succeed. I want something that can show me a result and I can take to a customer in 60 days.
A lot of companies make the mistake of developing products in a bubble with a long sales cycle. And when they release the product, the market has changed, the customer’s changed, the business needs have changed. And then it fails.