In June 2008, insurance giant IAG noticed an important trend: some consumers were looking for an insurance company that does everything online. To meet that demand, the company has therefore created an internal startup, called theBuzz Insurance, to capture the new market.
“IAG operates a portfolio of insurers, each aligned to different channels and consumer types,” Boru Kagho, IAG’s Leader of Sales, Service and Distribution told last week’s RightNow APAC Summit in Melbourne. “As a group we insure 200,000 businesses and 5.5 million cars in Australia.”
In May 2008, IAG IAG said “Go create an online business to hit that niche and gave us a blank sheet of paper,” Kagho recalls. By June 2008, an executive team visited Silicon Valley to learn about technological possibilities and to plan a company culture. One result was www.myinsuranceideas.com.au, a community engagement effort since rebranded as www.thebuzzexchange.com.au that was designed to elicit feedback from the community and help IAG to design a product its customers wanted
“Customers influenced our business model and strategy, and let us sample the appetite for interaction with insurance companies,” Kagho told the Summit. “Customers can play a key role in creativity if encouraged to do so.”
Feedback generated by the site revealed that customers felt insurers are “patronising and do not listen,” Kagho said. Inflexibility was another theme, with customers wondering why they were forced to purchase cover they did not want.
The team used that fe3edback and tried to “look through the eyes of the customer,” concluding that “If you provide what customers want but don’t remove the irritants [in the customer service experience], they’ll criticise you for the irritants [even though they like the product].”
Kagho and his colleagues therefore “rated irritants on severity and frequency, and how much customers rate the value factors attached to each.”
“We based our business model on those needs,” and also designed products and made technology choices based on customers’ expectations.
“When establishing a new brand it can be tempting to go for the latest and greatest technology,” Kagho said. “But must keep in mind speed to market and the fact that anything we acquire has to be supported by existing technology teams.”
The result, at theBuzz, is “a mix of tried and true plus new technologies.”
“As a start-up can try new products from a lower risk profile than the group,” Kagho said. But when taking on any product, theBuzz looked for vendors that were after more than a quick sale.
“We don’t have vendors, we have partners,” Kagho told the Summit. “Partners understand our culture and can adapt to the way we work.”
RightNow is one vendor to have won that status, thanks to products that “had the functionality we needed.” That includes live chat and a knowledge base, the latter made searchable by Google in order to make the brand more accessible and also to assist with search engine optimisation strategies that drive traffic to its site.
Keeping track of social media is another tactic. “We monitor what people are saying about insurance in the cloud,” Kagho said, in order to learn about their attitudes and also to participate in conversations if it is practical to do so.
“Poor customer service will not be tolerated – you see it on the blogs,” Kagho told the conference. And if complaints go viral, competition is not far away: nine new online car insurance companies have entered the market since theBuzz launched.
But Kagho said his team believes its model of constant engagement can sustain this level of competition.
“Being community-minded and offering co-creation is at the heart of everything we do. We work hard to create connections that let us co-create with consumers to create products for the future.”