The technology is here – but do we have the will?
About 15 years ago I went to Harvard Business School. It was a cathartic experience and it gave me a new awareness of how quickly and dynamically change could occur.
Afterwards I kept challenging my seemingly conservative colleagues by pointing out that budget airlines now had bigger market caps than British Airways and over the next few years I pointed out that Nokia had the biggest market capitalisation in Europe. My overall message was that in a world where Moore’s Law saw technological potential expand every 18 months any company’s supremacy was shortlived unless they continued to innovate and challenge their own thinking.
My attention was piqued therefore when I read that Nokia were suffering because of the emergence of smartphones (in this market Apple produces close to half the profits with a market share of 4% – as the Americans say “go figure”!).
More than anything this made me realise how technologically backward we are in protection. At a time when we are meant to be considering the applicability of simple products it seems to me that the real trick will be in enabling people to buy protection products via their smartphones. It is the Twitter and Facebook generation who will buy this way and they will only buy without advice from strong, trusted brands. We have very few of them in protection and it seems to me that it is only Aviva and Scottish Widows who understand this or at the very least are prepared to put their money where their mouth is.
Additionally any product sold via a smartphone must be easy to buy with a simple process that enables companies to select with a minimum of fuss. It seems to me that if you sell via a device like a smartphone you will almost certainly be dealing with a young segment where your selection issues will be more involved with lifestyle than health. I’ve banged on before about how we might look at some of the selection and pricing methodology used in general insurance to see if we could adapt it for the purposes of life and simple income protection.
The technology exists but I’m far from convinced that the will to experiment and push the envelope does. Which brings me back to brands again. If you accept that industries are changed by new thinking which usually comes from outside it suggests to me that some of the conservative, unadventurous and passionless protection writers that we have are extraordinarily vulnerable to a radical new proposition in the way that the telecoms companies were to Nokia and now Nokia are to a range of technologically-savvy competitors.
If you believe in the transformational power of technology this is well worth considering at your next strategic awayday – if it hasn’t already happened by then!