5 Growth Strategies from Top-Rated Insurance Companies

Insurance is entering a new era. And while the industry has been inching toward modernization over the past decade, the pandemic has amplified the urgent need for insurers to adapt and innovate. In this article, we’ll explore the business continuity strategies some companies are using to persevere in these rapidly changing global conditions.

Many insurers have had to accelerate their technology timetables to facilitate remote access functionality. Others are taking the opportunity to restructure their organizations to accommodate the growing demand for more flexible products, services, and processes. But if your company isn’t ready for a drastic overhaul, you can still make an appreciable difference by concentrating on individual changes with the greatest potential to create a positive impact for your policyholders and business.

So what is the best way to triage your transformation? We analyzed some of the top-rated insurance companies and identified five common factors.

1) Strong Digital Capabilities

Consumer demand has been driving digital adoption for years, and the insurance industry has become more innovative – and more competitive – as a result. As the gap between the digital-haves and the have-nots continues to grow, the more technically inclined insurers are beginning to outperform their non-technical counterparts.

According to the JD Power 2020 U.S. Auto Insurance Study, for the first time in the study’s 21-year history, website functionality has surpassed direct agent-to-client interaction as a contributing factor toward customer satisfaction. It’s therefore no surprise that Geico earned the top spot in the 2020 Insurance Digital Experience for service, in addition to achieving the highest possible ratings from both NerdWallet and AM Best. From quick online quotes and a robust policy management app, to “DriveEasy” telematics and digital claims disbursements, Geico’s reputation as a technology leader is undoubtedly a large part of the company’s massive success.

Two notable recent market entrants, Lemonade and Hippo Insurance, have made their mark as insurtech unicorns for their digital-first approach to insurance. Consumers have overwhelmingly embraced Lemonade’s “instant everything” and Hippo’s “smarter insurance,” as evidenced by each company’s latest valuation - $4 billion and $1.5 billion (respectively).

Even without a strong digital foundation, you can still update your processes and elevate your customer experience by integrating single solutions into your current core systems via API. Whether you bolster web capabilities, digitize payments, expand online communication channels, or automate different parts of the claims adjustment process, you and your policyholders can reap the benefits of modern insurtech without the cost and disruption of a total systems replacement.

2) Corporate Social Responsibility (CSR)

Not every transformation requires a digital upgrade. A recent Capgemini study reported that 79% of consumers prefer brands that prioritize corporate social responsibility (CSR). Other studies have linked CSR to increases in employee productivity, work quality, and revenue. As the world continues to face multiple crises – the pandemic, economic uncertainty, and increasingly severe weather events, just to name a few – opportunities abound for companies willing to roll up their proverbial sleeves and participate in the solution.

Authentic community engagement has been a longstanding core value among the industry’s highest-ranked performers. Earning top honors from JD Power, Consumer Reports, NerdWallet, and the U.S. News and World Report, Amica lives and breathes their company mission “to create peace of mind and build enduring relationships." In addition to a strong customer-centric focus, Amica is known for giving back to the communities they’ve served for over 100 years. Between charitable grants, donation-match programs, and direct volunteer work, Amica’s presence in the community clearly demonstrates their commitment to building trust and fostering relationships.

Adopting a corporate responsibility initiative is a simple step any insurer can take – regardless of company size - to become more involved, build a strong brand identity, and inspire loyalty among employees and customers. To get started, the Insurance Industry Charitable Foundation (IICF) is a respected philanthropic resource that helps insurance companies coordinate volunteer efforts and fundraisers, and they can also help direct your donations toward a cause or event that is important to your community.

3) Hyper-Personalization

After years of enjoying tailored experiences from corporate behemoths such as Amazon and Netflix, consumers have come to expect that same level of personalization from all their brand interactions. In an industry built on a one-size-fits-all economic concept, insurers now face the challenge of pushing the business model beyond that of pure risk mitigation.

Enter the new insurance ecosystem.

USAA, the U.S. military community’s provider of choice, recently topped Forrester’s 2020 CX Index, and regularly receives the highest accolades from JD Power*, Consumer Reports, NerdWallet*, and AM Best, among others. To say that USAA has expanded the scope of what it means to be an insurance provider would be an understatement. The sheer volume of financial products and services - with over 50 million possible configurations - allows USAA to provide a unique experience for each of their 13+ million members.

Customizability doesn’t require a broad product line, however. John Hancock, winner of eleven 2020 Stevie Awards American Business Awards, is one of the largest life insurance providers in the country. Instead of spanning multiple lines of business, the insurer is sharply focused on an ecosystem of complementary products and services, all of which support their core function of helping people plan for success throughout life’s major milestones. In addition to wealth management services and life insurance, the company offers innovative wellness programs to help customers live their best lives, with discounts on healthy foods, fitness trackers, meditation apps, even a program designed specifically for people with diabetes.

Whether your company offers a wide variety of services or a single product, look for ways to give your policyholders something they won’t be able to find at just any company. Even the smallest touches, such as birthday cards or personal emails, can provide unique value and strengthen your customer relationships.

*Because USAA serves only members of the U.S. military and their families, the company is technically not eligible for ranking by JD Power and NerdWallet. However, the company consistently receives honorable mention for its top scores.

4) Diversity & Inclusion (D & I)

Although the two terms are often used together, ‘diversity’ and ‘inclusion’ refer to two distinct, yet interrelated concepts. In the context of employment, diversity refers to a workforce made up of people with a variety of backgrounds and characteristics, which may include multiple races, genders, ages, ethnicities, religions, sexual orientations, abilities, and other personal, social, and cultural attributes. Inclusion involves an environment in which all employees can feel comfortable and confident knowing that each of their individual perspectives, lifestyles, experiences, beliefs, qualities, and talents are equally valued, supported, and celebrated.

Research consistently demonstrates that workplace diversity and inclusion produces multiple benefits for employers and employees, such as increased creativity, innovation, employee satisfaction, economic growth, profitability, and competitive performance in the market.

Exemplifying these benefits, The Hartford has been named on the 2020 Bloomberg Gender-Equality Index (GEI), Forbes’ 2020 Best Employer for Diversity and Best Employer for Women, and Ethisphere Institute’s 2020 World’s Most Ethical Company list. The company has also earned 100% on both the 2020 Disability Equality Index (DEI), administered by Disability:IN and the American Association of People with Disabilities, as well as on the Human Rights Campaign Foundation’s 2020 Corporate Equality Index (CEI), a national benchmarking survey and report measuring corporate policies and practices reflecting LGBTQ equality in the workplace.

Organizational psychologist and executive consultant Dr. Laura Gallaher offers advice for organizations seeking to enhance their company culture through diversity and inclusion.

1. Develop an inclusive hiring strategy.
2. Offer diversity education and training.
3. Embrace workplace flexibility.
4. Create a culture of inclusion.
5. Track and measure progress.

For a detailed breakdown on each step, you can find Dr. Gallaher’s full article on Business.com.

5) Flexible Pricing Structures

According to the 2020 J.D. Power Auto Insurance Shopping Study, the importance of price as a deciding factor among auto insurance customers has steadily climbed over the past decade. As of April 2020 – one month after the pandemic began to take its toll on the American economy – that rate-sensitivity jumped an additional 20% from the previous month, and shopping for a new provider more than doubled in the same time-frame.

With more policyholders shopping around for better rates, direct-to-consumer insurance has become increasingly popular. The self-service nature of direct carriers means lower commission costs and admin expenses, allowing insurers to pass the savings along to their customers. Though the J.D. Power study predicts this trend will continue to grow, direct models are not the only way to reduce rates. And in fact, some of the industry’s top performers still rely heavily on traditional channels.

Progressive Insurance, for example, has seen two-digit YOY growth in net written premiums since 2015 using both agents and direct channels. The five-time winner of World Finance’s Global Insurance Award has invested heavily in system enhancements to support their agency channels - boosting digital efficiency while maintaining the agent-policyholder relationship many consumers still prefer – in addition to supplementing that service with direct-to-consumer solutions. The company's flexible pricing structure also includes a wide variety of discount options, usage-based rates, as well as their aptly dubbed “Name Your Price” tool.

However, Progressive's competitive rates are just part of a much larger value proposition. A holistic approach to the customer experience is essential for attracting and retaining policyholders in today's economic and cultural climate.

Bottom Line

Each of the organizations named in this article employ most or all of the five growth strategies, earning industry accolades for their achievements. Many other insurers (too many to list here) have already put these practices into place, and some are in the process of adopting them.

Looking at the industry leaders can be helpful when building a successful growth strategy. But ultimately, your company’s values and resources will drive your own action plan. Whichever step(s) you take – digital upgrades, community involvement, creative new products and services, enhanced diversity and inclusion, or a revamped pricing structure – moving forward swiftly and earnestly is key for ongoing success in the New Normal and beyond.

DISCLAIMER: All content is provided for informational purposes only, and any specific reference (or lack thereof) does not represent a One Inc endorsement of one company over another. The organizations named in this article were included as examples because they employ most or all of the five growth strategies and have earned industry accolades for their achievements. However, many other insurers exemplify these qualities as well.

At One Inc, we help insurers create a frictionless payments experience. If you’re interested in learning more about our inbound and outbound payment solutions and how to leverage payments and digital engagement to create an extraordinary customer experience, contact us today.