How can insurers and InsurTechs deliver better customer experiences?

Customers have raised the bar on the level of service they expect from their insurance provider. Faced with the industry’s historic reputation of working against the customer, insurers and InsurTechs must raise their customer experience game if they are to come out on top.

Many insurers and InsurTechs have witnessed an undeniable change in the demands of customers in the past two years. Ruth Fisk, vice president of insurance marketing at Smart Communications summarised this shift aptly, “Today’s digital savvy consumers expect two-way, interactive conversations, a far cry from the one-way, transactional communications of the past. Customers want that “Amazon-like” service. They expect their specific preferences and details to be known and incorporated into personalised, thoughtful digital interactions.”

There is a consensus in the industry that consumers have indeed raised the bar of the level of service they expect from a company. Christopher Sanders, head of customer intelligence solutions at Quantexa, said, “Customers now expect completely seamless experiences via web and mobile, and are less patient and forgiving when it comes to clunky processes and poor experiences – customers will quickly become frustrated and either take their business elsewhere or switch to more costly email or phone channels.”

Jimmy Spears, head of automotive at Tractable, agreed that the increased use of digital mobile services, such as Deliveroo and Uber, has meant consumers are more accustomed to, and expect convenience and speed. Driving this, Spears continued, are three main demands: greater accessibility, customisation, and ease of use, with speed and convenience being the outcomes.

Not only are consumers demanding more seamless and convenient experiences, but they are also expecting experiences customised to them. In the case of the automotive industry for example, Spears added, “They expect carriers to know how many vehicles they have, where they live and other information if they have interacted with you before.”

Quantexa’s Sanders concurred, “When they [consumers] pick up the phone they expect to speak to someone with an understanding of their relationship with the company – for example what products they use, when they last called, if they’ve complained, details of recent renewal offers. They do not expect to have to repeat the same information to multiple people.” At the same time, Sanders added, they are demanding simplicity – that the products and services are easy to understand and quick to purchase.

Meeting the demands with digital

Delivering a fast, personalised, and convenient customer experience is intertwined with the drive to digitalise. Smart Communications’ Fisk said customer interactions should form a key part of an insurer’s digital transformation. Namely, insurers should have digital tools that support hyper-personalisation and two-way customer conversation, offer easy-to-use interfaces, self-service functionality, and have omnichannel capabilities.

“The number of smartphone users in the world today is 3.8 billion – meaning that most of us carry more computing power in the palm of our hands, than all of NASA had back in 1969 when it sent two astronauts to the moon – and we can get nearly anything we want at a touch of a button, everything except perhaps insurance… Self-service functionality is critical, with omnichannel capabilities that allow interactions to continue across devices 24/7.”

Insurance software company Earnix champions the use of AI to meet personalisation demands. Udi Ziv, CEO, said insurance providers need to accelerate their time-to-value abilities to deliver smart, fully dynamic offers. “This requires agile and automated business processes, driven by AI, with the capability to identify in real-time the right offer for every single customer. All while being fully integrated into an insurer’s existing tech infrastructure.”

One such example of this data-led insurance, Ziv said, is Earnix’s partnership with INSHUR, where rideshare, courier and food delivery drivers can obtain personalised insurance products within minutes. In turn, this drives customer retention and loyalty, Ziv added.

The make-or-break moment

A key focus for many insurers when looking to bolster the customer experience, is the claim process. Often as the only time a customer has to contact their provider, it is a crucial point.

When a claim occurs, Tractable’s Spears said, the policy immediately becomes real. “Until a loss event, the policy is a piece of paper filed away, or a digital file attached to an email. The insurer is well aware of this. A poorly executed claim can drive a customer to shop around. A well-handled claim will drive the customer to tell others and share the experience even on social media.”

According to Smart Communications’ Fisk, the claims process is an opportunity for the insurance company to provide exceptional care and is a make-or-break moment. Quality communication is key, “Claims handlers need to be accessible, enabling two-way conversations while also providing succinct and timely communications with speed and transparency. They must make sure to also monitor sentiment.”

Moreover, Quantexa’s Sanders said since the claims experience is likely to be a time of high emotion for a customer, the impact of a positive or negative experience at this time is likely to be amplified. What’s more, is that significant life events that might trigger a claim are one of the few times friends and family are likely to discuss insurance, “so as well as improving customer retention a positive claims experience can drive customer advocacy, ultimately resulting in better outcomes for customers and growing business.”

Challenging a bad reputation

However, the insurance industry can oftentimes suffer from the reputation of difficult to navigate. Brad Medd, chief technology officer at SE2, parent company to the Breathe Life origination platform and the customer engagement platform, said, “We view insurance as an essential financial product that protects families by providing income replacement when they need it most. We also know that historically, finding the right policy and buying it could be a cumbersome and confusing process.”

In addition, the industry has been plagued by a bad reputation of working against the customer, not for them. Smart Communication’s Fisk added that the insurance industry has indeed suffered an erosion in trust “It’s true, long call centre wait times, frustrating chatbot experiences and adverse publicity about disappointed claimants have all undermined customer confidence,” she said.

The good news is that change is on the horizon. Quantexa’s Sanders said the industry is starting to see a shift in focus towards greater customer centricity and customer experience, both from incumbents and new InsurTechs. In time, this should result in changes to the customer experience which will help reinvent the industry’s reputation.

Max Stratmann, chief sales officer of Scanbot, explained why this bad reputation may have emerged. “The market position of traditional insurance companies grew historically over time. These billion-dollar enterprises grew organically and added massive value to their brands, gathered loads of data but failed to adapt to changing consumer demands and actually capitalising on the amount of knowledge they gathered. Rather than using that knowledge for their advantage, they focused on increasing value.”

Today, with new types of companies such as lemonade, Hippo, or ottonova entering the market, Stratmann continued, insurers need to act quickly because their “old-fashioned” image fails to amaze the upcoming generations. These new providers, start-ups that grew to unicorn status rapidly, impress consumers with fully digital approaches to insurance and “wow” their insureds. That exact same “wow” feeling is what the old carriers need to chase now, he added.

Keeping up with the customer

So, what can insurers do to change the narrative? According to Oliver Bath, head of customer success at Sentiance, in order for the “dinosaurs” to keep up with the “new kids on the block”, incumbents must be laser focussed on the customer and the experience that this new type of customer expects.

“Gen Z and millennials expect the same experience they receive from their favourite social platforms, online retailers and neobank. For insurance, this means, mobile-first, fast, flexible and on-demand policy options with easy-to-make claims and near instant settlement. The insurer of tomorrow will need to go even one step further by leveraging their knowledge of risk to mitigate disaster for the customer altogether.”

Quantexa’s Sanders believes the crux of the issue is that insurers have to deal with uncertainty around which claims are valid, or even fraudulent. “This uncertainty manifests itself in what feels like resistance to the customer. Insurers and InsurTechs need to make better use of data to reduce this uncertainty so more valid claims can be processed without query.”

For Smart Communications, Fisk said optimising customer communications and touchpoints would go a significant way to building trust. “It is no longer enough to just offer a digital-centric experience, it also needs to be customer-centric. Becoming more responsive by providing clear, concise, and timely communications that keep customers informed. By providing convenience through speed, transparency, and ease of interaction.  By adopting frictionless processes such as personalised intelligent adaptive forms and initiating two-way conversations in real-time.”

Scanbot also champions a customer-centric approach, Stratman said insurers must strive to quickly develop an optimal omnichannel customer experience that puts the insured first. “The customer is always right” matters more than ever. Forming strategic partnerships with InsurTech will help these firms deliver this.

Both Earnix and SE2 believe companies must look to level up their technology infrastructure. Earnix’s Ziv said, “Legacy IT systems and manual processes are limiting carriers’ ability to meet customer expectations. Disjointed rating and pricing systems are another challenge for insurers. Combining rating and pricing within a composable, agile and dynamic technology infrastructure that is pre-configured for rapid integration within existing tech infrastructure, allows carriers in near real-time, to be able to offer contextually based, highly personalised offers, aligned with consumers’ needs.” SE2’s Medd said, “By leveraging technology and offering enhanced UI/UX design, insurers and InsurTechs can improve the claims process for consumers by making it more accurate, streamlined and efficient.”

Could InsurTechs be the pioneers?

Jamie McDonnell, sales manager at Novidea, said that firstly it is important to differentiate between InsurTech challenger brands and InsurTech enablers, which are helping incumbent insurers, MGAs, and brokers to catch up and compete.

“Many challenger InsurTechs have been inspired by the Open Banking revolution and the formation of Neobanks, or ‘challenger banks’. The key advantage for them is their zero dependence on legacy technology. Instead, by creating and using next-generation platforms they can seamlessly integrate best-in-breed plug-ins as part of a wider ecosystem to provide the best possible customer experience, in an agile and scalable way,” McDonnell said.

On the flip side, McDonnell continued, InsurTech enablers, such as Novidea, are enabling the incumbent market, particularly brokers and MGAs, to overcome its reliance on outdated legacy systems, to leverage the advantages that digitalisation has to offer.

SE2’s Medd agreed that InsurTechs do not face the same challenges of managing a shift from old technologies to digital ones, “InsurTechs have the advantage of building customer experiences with more modern technology and not being hindered with legacy technology. SaaS products enable InsurTechs to continually evolve and deliver better experiences to the consumer and the carrier.”

On the other hand, despite being less encumbered by legacy technologies, Quantexa’s Sanders said that InsurTechs have a disadvantage in the scarcity of data. “Traditional insurers have huge customer bases with historical behaviour providing a treasure trove of data that could be harnessed to deliver exceptional service to customers.”

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