With 73% of the UK population accessing the internet every day and 61% having access via mobile devices, people expect to be able to transact business and communicate in a digital fashion. Our vision for the future is for customers to use online devices to buy from us, communicate with us, recommend us and build a diverse product holding with us.
The movement of insurance and investment companies into the digital world has recently begun to accelerate with many organisations starting to make strategic investments in the second half of 2013. It is essential that we are not left behind by competitors who build successful digital applications. Many consumers still need to engage with insurers in traditional ways. We have already begun to make strategic decisions and investments to capitalise upon digital opportunities.
ENGAGEMENT THROUGH DIGITAL TECHNOLOGY
The retail distribution review, which was introduced at the end of December 2012, has increased charge transparency. In certain distribution channels this has led to a reduction in the availability of advice, leading to some customers to buy online without advice. We are active in both direct and traditional channels.
We aim to build deeper direct relationships with customers to encourage them to increase the level of their investments and consider a wider range of products with us.
We use search engine marketing as it shows intent of the customer to interact with us rather than us pushing unwanted messages to them. We also seed our insight through online channels to build awareness and we optimise our websites to help our audience engage with us effectively.
For professional investors, digital investing has become the medium of choice with around £270 billion on adviser platforms. Fundscape forecast that assets on platforms will dominate the market and treble in size over the next five years.
Our digital strategy is to help our customers benefit from financial advice, use platforms, or develop direct relationships with us. We focus on the use of insight that we derive from the data that we have on our customers. We then build automated email campaigns to develop these relationships in the best way possible. This includes a knowledge-building campaign where intermediaries get accreditation through viewing our videos, and also increasing the number of attendees at events and webinars through greater targeting.
ENHANCING THE CUSTOMER CENTRIC MODEL
Our digital vision is to use the new skills and assets we have to develop a much closer and digital relationship with our customers. We are investing in new capabilities that increase our ability to provide better digital service and also to personalise a conversation with a customer on websites. We’ve been building on our customer database, consolidating what we know about our customers across the Group and investing in efficient systems to move data around and run automatic campaigns. These systems can then cheaply facilitate campaign and email marketing and help us meet our customers’ future needs.
We also want to develop our existing customer self-service estate to move to a more ‘all in one place’ model where customers receive more information and more content in a digital format rather than through a purely paper-based relationship.
We’re investing in listening to our customers to gain better insight about them. Social media listening means we can understand and respond as appropriate to customer issues as they arise. Our online community enables us to gather up-to-date insight on customer preferences. As such we are starting to transform our conversations with customers on social media.
USING DIGITAL APPLICATIONS TO PROTECT CUSTOMERS
Consumers have for many years been comfortable about using digital applications to buy motor insurance. This confidence is now extending to household cover and life insurance.
We were the fastest growing direct home insurer in 2013 and have introduced many online features to help customers such as our interactive house, which helps customers assess their cover needs. We have also invested in digital communications, delivering digital policy documents and text messages about the progress of claims.
We also remain the largest supplier of retail protection insurance in a market dominated by online and efficient process. Our commitment to this model continues to win us business.
In 2013, we completed the purchase of theidol.com, not only giving us a whole-of-market online protection system but also being able to supply software to many other online brokers or aggregators. We are a major player for sales through aggregators.
“Cofunds became the largest UK platform by innovating and responding to customer needs. We look forward to continuing to extend our capability and distribution reach.”
DAVID HOBBS, MANAGING DIRECTOR, COFUNDS
The purchase of Cofunds in March 2013 gave us full ownership of the UK’s largest digital investment platform, with customer assets of £64 billion. Not only is Cofunds the biggest platform, but the service it offers was recognised in 2013 by the influential Shares magazine, who named Cofunds as the best fund supermarket.
Investment platforms are one of the real success stories of the last decade, with assets on platforms projected to more than double in the next five years. Cofunds’ real strength is its distribution reach, with 7,200 IFAs using the platform.
We are investing to enhance the capabilities of the Cofunds platform, ensuring we take advantage of the significant growth we expect in this market over the coming years. We plan to deliver operational efficiencies to enhance profitability.
We are planning further digital enhancements, including creating branded micro sites for advisers and extending mobile and tablet capability. This will combine with an expanding customer engagement programme, recently shortlisted in the financial services category at the Chartered Institute of Marketing awards.
We’re encouraging investors to make greater use of LGIM’s successful index and fixed interest funds. There’s a huge potential to be the passive provider of choice, sharing insights with Cofunds and developing effective joint communications. In the same way LGIM and Cofunds are working together to consider the best way of helping customers who have the confidence to buy online without advice.
A DIGITAL EXPERIENCE FOR EMPLOYEE BENEFITS
Our corporate businesses work together to ensure that employers have access to modern digital solutions for employee benefits. We won Workplace Savings Provider of the Year at the Workplace Savings and Benefits Awards 2013. This award recognises how our auto-enrolment platform gives employers a seamless front-end process for new schemes as well as offering an online retirement hub, where employees can see how their pension is building up.
As we increasingly digitalise our business, we are exposed to new risks. We are alive to cyber threats in terms of protecting our customers’ data, minimising reputational damage and the potential for financial loss.
We work closely with our IT business partners to manage new threats as they emerge as well as continuing to ensure our broader IT infrastructure is appropriately scaled to support our plans for growth. As digital solutions become central to our business, the management of our IT-related risks will become increasingly significant.