This is definitely an open letter to everyone writing about “disrupters” and also the insurance “customer experience,” citing “industry experts” and “top insurance executives”:
For the love of God, please, please, PLEASE stop comparing buying insurance to buying a consumer product on Amazon!
Case in point – from an “industry expert”:
“What's holding most insurers back from meeting the rate and gratifaction of the customer experience leader like Amazon? In a nutshell, siloed legacy systems.”
No, siloed legacy systems are NOT why the insurance industry doesn't satisfy the “customer experience” speed and gratifaction of Amazon. The reason the insurance coverage industry doesn't meet the “customer experience” provided by Amazon is because We do not SELL WHAT AMAZON SELLS! Amazon sells consumer products. Insurance is not really a product. If you're compelled to label insurance, it’s a process, not a product.
Another case in point from a recent Reuters article that quoted Ajit Jain, Berkshire Hathaway’s “top insurance executive”:
“Amazon.com can deliver something for you in 4 hours. If people can buy sponges on the web, why not insurance?”
Sorry, sir, but buying insurance coverage is NOT the same as buying paper towels. Yes, technology can – and really should – be used to enhance the effectiveness and efficiency from the insurance process, but phone apps and large data are not going to create a silk purse from a sow's ear. (BTW, there are some great silk purse bargains on Amazon at this time if you hurry, and the good news is that choosing the wrong one likely won't bankrupt you, just like happen when you purchase the wrong insurance “product.”)
Not every buying transaction can or ought to be reduced to an Amazon-like “1-click” purchase. If I are interested sponges, does Amazon have to ask me to explain what I'm going to utilize them for? Or who's going to use them? Or where I will rely on them? Or-? The insurance coverage PROCESS begins with assisting individuals, families and organizations in identifying their many – and often unique – exposures to financial loss. That details are then accustomed to determine what is the greatest combination of insurance plan forms and risk management techniques to minimize the probability of a significant or perhaps catastrophic financial loss. And if there is a loss occurrence, the process continues both in a financial and emotional way.
“Insurance” isn't a commodity product. It is a regulated, service-oriented process where the “product,” if you will, is really a complex, detailed legal contract that is highly litigated. To check it to sponges or other online consumer purchase is infantile.
How many bad Amazon purchasing decisions can lead you to financial ruin?
Why will we pay attention to and enable people who lack historical perspective and clearly are fundamentally clueless about how the insurance coverage industry works and why it really works this way, who really don’t understand the overriding mission of the industry? Technologies are a tool and a means to an end, the “end” being protecting individuals, families and organizations from financial catastrophe. Unless it's the product “disrupters” and consultants are selling… then it’s the end in and of itself.
Caveat emptor.
