The conundrum facing insurance [courtesy of Clay Shirky]
Saturday, 7 January, 2012 Leave a comment
If guys like Clay Shirky and Seth Godin “did” economics we wouldn’t be in the mess we are in now! These guys don’t think about critical issues in the conventional, College-taught, manner of an unreal world. They focus upon the world AS IT IS, AND NOT HOW WE CONVINCED OURSELVES IT WAS!
The challenge for, such as insurers, is how to embrace the lessons of the “the Digital Age” and to redesign the current, unsustainable, model.
Let’s face it, people don’t want to pay a premium to organisations that they don’t trust/value/respect; for cover that they believe they are unlikely to need, may not fully understand and, in the event of a loss, cannot necessarily rely upon; that is calculated, based upon the historical performance (claims cost) of the “average” profile of organisations, that the risk carrier have determined, are similar to your own; but that vary wildly according to factors unrelated to the ” contractual relationship”…
I could go on but the point is that the, self-induced, effect of Gresham’s Law – quantity pushing-out quality – upon the current model is such that it carries both threat and opportunity. The firms that LEAD the industry to, credible – affordable – tailored – sustainable, solutions will be those that provide the “peace of mind” that customers are ENTITLED to expect [from firms prepared to re-focus upon customer needs ahead of their own financial demands].
An industry so prescriptive as to be fearful of exaptation!?
A major part of the problem is, the lack of collaboration and, through that, innovation (that benefits the customer). This bears testimony to how marginalised contrarians have been – as popular as an objective risk manager at a bank boardroom! – so there is a lack of, influential, original thinkers able to identify a destination on the horizon and to plot a course, that relies less upon a the view in the rear view mirror and more upon a new, multi-dimensional, observation of the appropriateness of the mode of transport, the road immediately ahead and a rapidly changing landscape…
There has never been a mass market for good journalism in this country. What there used to be was a mass market for print ads, coupled with a mass market for a physical bundle of entertainment, opinion, and information; these were tied to an institutional agreement to subsidize a modicum of real journalism. In that mass market, the opinions of the politically engaged readers didn’t matter much, outnumbered as they were by people checking their horoscopes. This suited advertisers fine; they have always preferred a centrist and distanced political outlook, the better not to alienate potential customers. When the politically engaged readers are also the only paying readers, however, their opinion will come to matter more, and in ways that will sometimes contradict the advertisers’ desires for anodyne coverage.
It will take time for the economic weight of those users to affect the organizational form of the paper, but slowly slowly, form follows funding. For the moment at least, the most promising experiment in user support means forgoing mass in favor of passion; this may be the year where we see how papers figure out how to reward the people most committed to their long-term survival.