TURKEY: Fast fish will eat the slow fish in Insurance business
As a customer, what do you see when you look at the insurance business? Complex processes, hard to read and hard to understand policies, strict procedures... As a person working in this sector for 16 years, I must admit that this is the picture in my mind.
Insurance is a business "a bit" distanced with the customer not only in Turkey but also in the world. The main reason behind this distance is in the components of the business model of insurance.
Once and for all, the distribution channel model distances the end user and the insurance company unavoidably. Unlike banks, insurance companies rarely have direct contact with its clients.
The fact that the very existence of insurance companies is the need for risk management makes this distance grow a lot more. How? "Risk management" requires a consistent and risk-avoidant attitude and therefore a more conservative behavior. Thus, insurance is not able to react fast in the face of major changes such as consumption trends. Another reason is the fact that insurance companies are not in direct contact with their clients due to their "transaction-based" structure rather than a "product-based" structure.
McKinsey, a management consulting firm, has conducted a research on the number of contacts made annually between companies and their clients based on the sector. It is not hard to imagine, the results of the research showed that insurance companies are the ones least in touch with their clients. Read the full story