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12:18 PM
Rod Brooks, PEMCO
Rod Brooks, PEMCO

Can Your Insurance Company Be the Next Coinstar?

Identifying how consumers are changing and leading in meeting their new and unique needs is something any company can accomplish

Fifteen years ago I was finishing a four-year career stop at a young start-up called Coinstar. Back then, Coinstar was little more than an entrepreneur's dream of eliminating the need to count, roll and hand-carry coins to the bank. Today it makes life simpler for tens of thousands of people throughout the United States, Canada, Puerto Rico, Ireland and the United Kingdom. Each year, the company's self-service coin-counting kiosks process about 50 billion coins--creating more than $3 billion in spendable consumer cash. All of this happened in the 20 years since the company's conception.

Now let's switch gears to the world of personal lines insurance products. What's different in our world, individually and collectively, from where we were 20 years ago? Have any of our companies created $3 billion of incremental consumer value? I don't think so.

Unlike Coinstar – a feisty young company that imagined an opportunity for a better way and then embraced technology, innovation and change to make it happen – most insurance carriers still adhere to time tested methods that have become the (much too comfortable) status quo. With few exceptions, we're still metaphorically hoarding our lose change until we're forced to reluctantly count and roll it when our containers are overflowing. The fear of risk that might come from new ways can be paralyzing.

[For more on the intersection of insurance and kiosks, check out What Insurers Can Learn from Blockbuster's Demise]

Whether we like it or not, the world has moved into a new millennium and it likes its new address! The newest generation of consumers have grown up with enhanced communication platforms, superior connectivity, and the emergence of true mobility. Social responsibility and engagement are no longer theories of what might be possible. To the contrary, they are the new table stakes – the new normal. Insurance carriers and agents who linger in the past will not be invited to celebrate the future. Industry regulation along with a reluctance to move quickly and nimbly, has made insurance one of the most socially challenged industries of all.

Just as the decades-old process associated with recycling coins presented an opportunity for Coinstar, long-standing insurance practices have set a noticeably low bar from which to improve. I'm convinced that the winners in our industry will ultimately be those who find opportunities to differentiate their offerings in ways that are more about consumer engagement and less about a focus on improvements in the coverage and protection that our promises are based on. Ironically, it's those same opportunities that seem to frighten veteran industry insiders the most.

Now more than ever it's important that we shine a bright light on the intersection where marketing and technology meet. It's critical that go-to-market strategies be well understood by those who make their careers in technology departments. It's no longer enough to be functionally effective, financially efficient, and fast to market. Add to the mix that we must be incredibly socially aware and involved. Social engagement and brand positioning needs to be built into I.T. strategies and deliverables on the front end. It's time to challenge the status quo and join thought leaders from other industries. It's no longer enough to be incrementally better at what we do. Now is the time for CMOs and CIOs to join forces and design new ways to meet the wants – not just needs – of 21st century consumers.

Twenty years ago there were very few automated coin counting machines available for public use. Due to one man's vision and a small team of technologists, engineers, and marketers responding to an opportunity, there is now a Coinstar machine in nearly every community in America. Having that vision and desire are critical to success. So is the need for collaboration and compromise. Perhaps more than anything else, implementing successful change requires the courage to take new paths and act on the vision and opportunity that is present. Is your organization courageous? Will you be part of social change?

About the author: Rod Brooks is VP and CMO of PEMCO, a regional P&C insurer in the Pacific Northwest. Read his previous article, Why Shrink Wrap is a Metaphor for Insurance Differentiation

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