When I was a kid, my father – a GP in a small Wallonia village – regularly travelled on the account of some pharmaceutical companies. These hoped that a “seminary” on a trendy topic (like the benefits of red wine on coronary diseases) taking place in an inspiring environment (like a sunny Greek island) would positively impact his willingness to prescribe their product. Twenty years later, my father gives his accountant headaches when he so much as receives a pen from any pharma company. So yes, things have changed. The legislator has struck down on practices that Hippocrates might have disapproved, strictly framing the relationship between pharma companies and GPs.
The new legislation challenged these companies’ marketeers to reinvent the way they interacted with GPs. They needed to create new touch points with doctors, new ways to motivate them and new strategies to strengthen brand image and awareness. This resulted in the emergence of a whole range of innovative services for doctors, but also for patients and for patients’ families. For example, doctors can now call on scientific liaison officers for specialized advisory services. Patients can now visit forums where they can exchange about their conditions. And parents can make sure their child automatically receives a reminder sms helping him to better follow his treatment. These initiatives all have one thing in common: a stronger focus on helping the doctor better serving the needs of his patients; or said differently: a higher end-customer-centricity.
Whereas pharma companies have plummeted in the rankings of incentive-travel organizers, insurance companies are still spending as much as half of their marketing budget on sending their top performing brokers to Gambia or Lapland. But it may not be long before they also revise their budget allocation. The insurance sector in Belgium is indeed about to face a similar revolution as the pharma industry did a few years ago.
In an effort to improve the independence of financial advisors, countries like the UK or The Netherlands now demand that brokers be exclusively remunerated by their clients on a fee base. No longer are they allowed to receive any kind of commission from insurance companies. This guarantees that advice they provide aren’t dictated by any percentage received on a given financial product (or the destination of the trip they’ll be making once they hit their sales goals) but by a careful analysis of their customers’ situation and needs.
How long before Belgium gets impacted, when the EU legislator decides to take matter into their own hands? Nobody knows. But everyone senses that they’d better be prepared for this paradigm shift. And the insurance companies’ marketeers can probably learn a couple of things from what their colleagues from the pharma industry went through just a few years back. Much like the pharma companies’ role evolved to increasingly helping the doctor addressing his patients’ needs, the insurers’ role will evolve to increasingly helping the broker addressing his clients’ needs.
It is high time for the insurance sector to start developing a new range of innovative services. Tax and legal advisory services supporting brokers in setting up complex financial arrangements, on-line platform allowing the customer to have 24/7 access to all aspects of his financial situation, initiatives contributing to people’s financial education are only but a few examples. The key for insurers is to strengthen their relationship with brokers by strengthening their relationship with end-clients. To better address the needs of the customers, the insurers need to start by better understanding these customers. Or said differently: to increase their customer-centricity…
The pharma and insurance industries can seem worlds apart. But they actually share the fact that they are navigating at the frontier between B2C and B2B (working with intermediates but also looking to influence end-customers directly) under the close scrutiny of the legislator. So yes, the imminent turmoil to be wrought by the coming legislation on the independence of financial advisors is poised to have as much impact as the one experienced by the pharma sector in the nineties. The good news is that insurance marketeers can reach out to their peers in the drug sector for inspiration. An even better news is that this will definitely result in putting back the end-customer where he belongs: right in the center!