While digital technology and big data provide powerful tools to understand and meet customers’ needs, the rise of online also increases the risk of marginalisation for a significant cohort of consumers.
With first-party data promising to provide insurers with the granularity of information required to offer customers a fair premium on products which meet their individual needs, overdue efforts by the insurance industry to implement joined-up digital thinking will be welcomed by those consumers who have embraced the technological revolution.
But, with future insurance models focused on the detail, the inexorable growth of online activity also produces a cohort of offline consumers who – whether through choice or circumstance – are at risk of not being served.
For the sizeable cohort which remains disengaged – recent estimates by PwC offshoot DeNovo suggest as many as 42% of the global adult population play no part in the formal financial system – aspirational digital marketing (with its attendant badges, tokens and discounts for desired behavioural change) is utterly lost in the struggle to make ends meet.
Add to that the half of the global population who have yet to climb aboard the mobile phone bandwagon, and it’s clear that for many online transacting is a non-starter.
The shifting sands of marginalisation
Marginalisation has many masters – from the choices made for us and by us to the circumstances we find ourselves in. But why should businesses with shareholders to satisfy care about the marginalised?
In this age of atomisation, in the economy of one, marginalisation is neither narrow nor discriminatory nor fixed.
From minorities to whole communities, we are all, to some extent, at risk of marginalisation. Perhaps not today, but who knows what tomorrow will bring. From that perspective, some degree of collectivity is essential to a thriving future.
As a gateway service to so many important economic and social activities, insurance has an essential role to play in that future.
And, given the connectedness of the global market and the current focus on social enterprise, it is vital that business serves not just corporate interests but broader societal interests too.
Thinking stakeholders rather than shareholders is key to an inclusive strategy.
Reiterating the social value of protection
It’s not a great stretch of the imagination to envisage a more socially inclusive insurance industry.
We already engage in and accept solidaristic principles, evident in the collective benefit that underpins Takaful insurance. Indeed, insurance globally is no stranger to the notion of social value – the concept of pooling resources and risk has always been a fundamental principle of the industry.
A sustainable future benefits everyone, and social enterprises are central to that aim. For corporations and governments across the globe – too long seen as the enemy of the people – inclusive strategies present an opportunity to demonstrate true concern for social inclusion.
That is a noble ambition, but the questions for insurers are many and complex. Is insurance to become a social enterprise? Where on the spectrum from profit to service must the industry sit? And will that decision be voluntary, or enforced?
These are questions which lie beyond the remit of this blog – beyond even the industry in isolation. But to answer the question posed at the outset: in a new paradigm of social enterprise, to serve is to profit.