What’s Next for P&C Customer Engagement?
Creating Insanely Great Customers
Creating Insanely Great Customers
Chapter 1
Chapter 1. Identifying Your Insanely Great Customers
At the top of almost every CEO’s priorities are three things: customer engagement, innovation, and operational efficiency. These things have always been critical, but today we are in a digital storm that’s disrupting entire industries, and most CEOs aren’t happy with their progress. Why? Because companies are addressing these priorities as individual initiatives. The solution? Integrate and align these initiatives in every functional area within the company with a single goal: Help customers become Insanely Great by continually accelerating the breakthrough value delivered to them.
Digital Transformation for Insurance 3.0: Digital Ecosystems
Digital ecosystems are taking over industry after industry, especially those with a focus on products and services. From home buying services to banking to insurance, digital ecosystems are changing the way consumers and companies do business.
A simple example is Intuit, the online financial management software. Intuit makes it easy to connect all of your financial solutions and data together into one easy-to-manage solution. Another example is what John Hancock is doing with their life insurance offering. They offer rewards based on healthy food purchases and activities from wellness trackers such as Fitbits.
Insurance and InsurTech innovators are exploring and harnessing the digital ecosystems that surround and support people, their lifestyles, and stages of life. They are also exploring the digital ecosystems surrounding and supporting industries and the businesses within them. Digital ecosystems are composed of cloud-based interoperable platforms, solutions, devices, and data. The impact of digital ecosystems grows as the solutions within them grow in number, capability, interoperability, and the value they create. The solutions these innovators develop and/or become part of will completely upend the world of insurance.
Auto insurance, health insurance, coverage around businesses, and even life insurance will all be dramatically changed by these tech-forward ecosystem-enabled solutions and will set new standards in the value and the digital experience provided to insurance customers.
Participants across the industry are tapping into these digital ecosystems opening the door to growth and innovation opportunities.That includes InsurTechs and insurance companies. It also includes innovative solution providers like Majesco and other solution providers are developing platform strategies that make it easy for their insurance customers to tap into the data, analytics, and cloud-based insurance solutions that are available within digital ecosystems. This accelerates insurance companies’ and InsurTechs’ ability to modernize and streamline their processes and services and bring innovative solutions to market more quickly.
Digital ecosystems are helping insurance companies, brokers, agents, and InsurTech companies to open up new pathways in order to retain current customers and attract new customers with traditional services, as well as modern products.
Customer Engagement
Digital ecosystems are creating a number of new ways in which companies can connect with and stay in touch with customers. Multiple touchpoints, like mobile devices, wearables, social media, email, artificial intelligence-driven chatbots, and more are literally opening up avenues for companies to create new value and engage with customers. That includes value added solutions that become part of a broader insurance offering such as activity and diet trackers.
What’s more, having access to the data and insights that come back from these devices and solutions helps insurance companies personalize the insurance products and customer experience for individuals and businesses. Competing on a successful level in the future will require that insurers develop new capabilities and an ecosystem of partners that enable data-and-analytics-powered solutions to engage and create value for customers.
Risk Identification
Another major way in which digital ecosystems are changing the insurance industry, as well as the customer-consumer experience, is to help identify risks and gaps in coverage, which in turn will personalize and improve the overall experience for the customer.
New policies that adjust the price or overall coverage in relation to changing risk identifiers are creating incentives to manage risk more directly and actively. Some companies are now producing policies that provide premium credits to people who live a healthier and risk-free lifestyle.
Think about how Progressive Auto Insurance provides discounts and breaks for customers who drive better. The company uses technology known as Snapshot to see how their customer is driving and give them incentives based on their driver safety skills. Innovative insurers are exploring more potential around next-generation policies in other casualty areas to adjust price or coverage and use real-time streams to process claims more accurately and efficiently.
Creating Customer Value with Digital Claims Processes
The ability to tap into the devices, solutions, and data in the digital ecosystem surrounding the end insured is changing the traditional claims management system from an adversarial relationship with the customer to one that actually improves customer loyalty. Using data from devices and other sources, claims can be automatically generated and resolved. Examples of this are emerging in everything from flood to crop to auto to home appliances. The most innovative insurance companies are using these data sources and analytics-driven approaches to automate the entire claims-handling and fraud-detection process.
Chatbot-based systems, for example, are offering customers an automated claims payout process within a matter of seconds. This can be seen in digital native companies like Lemonade, a young startup insurance company that utilizes technology and behavioral science in every aspect of its services. Lemonade works actively with its customers to prevent claims and provide services that add value to customers.
Strategy and Partnering
Insurance companies and InsurTechs (and the tech vendors that support them) that want to succeed in a digital ecosystem market need to develop a culture and strategy that continually evaluates the ecosystems surrounding customers for solutions and data. Doing so will enable them to optimize the value they create and the experience they provide for customers as well as improve the effectiveness of internal processes. Companies like Rein provide insurers and other InsurTechs a next-generation platform and ecosystem that enables companies to bring digital generation insurance solutions that leverage ecosystem solutions and data and machine learning to market faster. From regulatory compliance to risk selection to security features, companies like Rein are helping accelerate the ability of insurance innovators to tap the power and speed of innovation provided by digital ecosystems.
The world of insurance is changing, and doing things the traditional way won’t take companies far enough. With the availability for more digitally-connected data and services and customer experiences, the consumer is demanding products and services that provide them the benefits provided by ecosystem enabled solutions.
Developing a digital ecosystem strategy is a necessity in today’s world. It requires thinking about the customer in a digital world and how the insurer can create value for them by becoming an integral and interoperable part of that world to see how they can successfully support their customers with effective insurance options and services. When this is determined and outlined in an effective way, insurance and InsurTech companies will be able to develop the right strategies and the right partnerships with which to develop products and customer experiences that give them a sustainable competitive advantage.
Emerging Distribution Strategies and Solutions: Competing in a Digital Customer-Centric Market
The insurance industry is rooted in tradition and has been consistently devoted to its tried and true processes. But with the advent of mobile devices, digital data and an analytics-based approach to working with, serving, and retaining the customer, insurance companies must embrace digitally-enabled distribution strategies or perish.
Digitally transformed insurance products, customer engagement, and processes are impacting everything from auto to life to home to commercial insurance. Personalized bundles are being developed to create streamlined offerings for customers. Leading insurance companies are coming to the understanding that they need to develop next-generation distribution strategies that can effectively sell and support these next-generation products if they are to remain at the forefront of the digital insurance industry.
But it’s not just the fact that the industry is changing, the customer and their expectations are changing as well. These changes are being driven by the customer’s experience they have within closely aligned industries such as banking, as well as, the experience offered by the big tech giants like Amazon, Google, and Apple. These expectations change the customer expectations about everything from where and how they are made aware of their needs and solutions that address them, to how they are onboarded, serviced, and supported as a customer to their expectations about how insurance-related solutions create value for them. Insurers will need to develop distribution strategies and capabilities that can address these needs by identifying new digital touch points in the ecosystems surrounding insureds, improving the flow of information between the customer, distribution partners, and the insurer’s various departments and processes. The ultimate objective is to deliver greater value, be faster in a more personalized manner, and do that far more effectively than current approaches. All of that will need to be executed through touchpoints and processes that span a myriad of digital ecosystems.
What’s Needed to Win: A Customer-First Strategy
Insurers, brokers, and agents that expect to survive and thrive must take the steps to understand the particular needs of both current and target customers and begin to build a strategy around them. Customers are already reliant on digital products and services at this point, and there’s no going back. They expect a fully personalized service meant to provide the easiest experience when inquiring about and applying for new insurance services. Expectations are high to receive the level of service and support they need that fits into their everyday personal and business lives.
And while customers are wanting to handle a lot of options on their own with self-service and tech, they still want the personal touch of an agent ready to help them when they need it. When it comes to more complex issues, customers would much rather speak with a live human who can make things simple for them.
That isn’t so different from what agents and brokers provided in the past. What is different is that in today’s world, the customer rightfully expects the person they reach to know far more about who they are, what their needs are, and where they currently are in their journey as a potential or existing customer when the person responding picks up the phone. They don’t want to repeat information and the last thing they want is for the person they speak with to be less informed about the topic and their situation than they are. The digital products, solutions, and broker and agent platforms that are emerging from the innovation being driven by InsurTechs use next-generation data sources, machine learning, and predictive analytics to provide automated insights and make connections to provide a more user-friendly experience. Within a few clicks and swipes, they enable agents and brokers to give customers completely personalized information based on the data that’s been provided previously.
This type of focus on service can help brokers and agents provide all kinds of new highly contextual support and value to the customer experience and will help them remain relevant in the digital market that is coming. Deploying these kinds of systems will help insurers preserve a critical source of new revenue and partnerships that help them build and retain loyal customers.
Setting Data Free: Supporting Next Generation Business and Distribution Models
Information has traditionally been siloed across the insurance industry. Brokerages, agents, underwriters, and claims management have all siloed this information behind legacy systems and legacy ways of thinking about the business. Companies who expect to survive break those silos apart and begin sharing that information based on its ability to provide greater value and support to the customer. Yes, the customer’s privacy still needs to be protected, but those who want to compete successfully will need to find ways to share the right information on a prospect or customer at the right time in real time. No one in insurance can expect to compete using the old ways of having to search through a number of actual paper files or departments and/or to call others who have to do the same to meet the customer’s needs. Digital sharing and protection of data is becoming a competitive weapon and is more streamlined than ever, reducing errors, and removing tedious manual tasks from day-to-day work.
Technology is changing at a rapid rate and isn’t going to let up anytime soon. This is where cloud-based solutions being introduced by InsurTechs have a huge advantage over legacy systems that are difficult to work with and upgrade. Platforms that are used today must be future-proof, designed to roll out automated updates in the years to come and keep from having issues with servicing customers.
Why the Sense of Urgency? The Future is Already Here
The change taking place in insurance is accelerating. Many of the leading insurers and InsurTechs have completed the work on the basic digital capabilities they need to compete. That means they are ready to undertake and deploy the systems and capabilities that will truly set them apart from their competitors and give them a running start against the big tech players that are circling even closer to the insurance market.
Customers are getting younger in the insurance market, and if they’re not getting younger, they’re still operating with a younger, more modern outlook. The future of insurance consists of lower rates, better service, and personalized counsel to grow off of. Brokers and agents need to have this understanding to meet the growing needs right now before they are left behind. This can be done by looking at how Millennials and Generation Y are operating since they are the ones driving the trend away from traditional models and toward a more digital-friendly landscape.
Customers want their information and digital insurance services supplied to them quickly and in a personalized way. But it’s the human touch that will never go away as customers also want to be able to get in touch with a human being who understands their needs when they want it. To do this, companies in the InsurTech market need to design a data-driven approach to the user experience and engagement models that keep everyone up to date on the modern customer’s needs.
This can be seen in the way people communicate with each other, such as the use of mobile devices, chatbots, and social media. Tech-savvy customers, especially Millennials, are entering their mid-career stage and are working with these technologies more and more in their everyday work tasks. Mobile devices, including phones and tablets, can get employees the information they need while on the go, heading into or out of the office or going from meeting to meeting.
Customers are increasingly putting the importance on the speed of service as well as the ability to tap into self-service options. The insurers and brokers / agents that emerge as leaders will have done the same.
Examples of companies bringing these capabilities to market include Bolt, who is providing a platform that enables insurers to quickly set up and provide new distribution channels, to Digital Fineprint that provides data to support commercial brokers and customers, to Certua, who is finding new ways for life insurance agents to create value for their customers.
Companies are starting to install more Saas (software as a service) technology in driving the new insurance process for customers. And data is playing a huge part in how insurance companies are working with their clients, enabling insurance companies to better understand their needs with a more analytical approach.
Come listen to topics like this and others from innovative industry leaders at InsurTech FUSION Summit on June 18 -19 in San Francisco.
Digital Engagement: The Empowerment of Insurance Customers & Communities
It’s hard to look at any industry in today’s digitally connected world and spot something that isn’t being guided, influenced, or altered by technology. In today’s fast-paced economy of digital connectivity, it’s all about personalization and the push toward a more hands-on method of customer engagement, the business and communication strategy that connects an external stakeholder and a company through constant communication and the creation of value for the customer. Think about companies like Amazon, eBay, Apple—all stalwarts in the customer engagement community, bringing a hassle-free experience right to their fingertips and doorstep.
The same can now be said of leading insurance companies that rely on technology, or Insurtech, to deliver positive results and engage with customers in a more proactive, omnichannel way. In the world of on-demand and connected insurance offerings rapidly coming to market, a competitive customer experience will make all the difference. The most innovative of those are combining insurance with added value, added services, and benefits from ecosystems outside of insurance. These services will improve customer engagement and quality of product and require thinking through a totally new approach to the customer journey and the customer experience.
Redesigning Customer Expectations
First, it’s important to look at how tech companies that are unrelated to the insurance industry have changed the consumer experience from top to bottom. Tech giants, as alluded to above, have completely upended expectations that customers have in obtaining practically any product or service they need or want. By developing a truly digital and mobile experience, these tech companies have redefined a new customer engagement and experience standard. It’s results: instant gratification, immediate connectivity and a new set of expectations among the consumer base.
Companies like Apple and Netflix have not only changed what customers want and expect from their products and services but the entire customer experience. They are using, big data, social media, and artificial intelligence (AI), as well as other advanced technologies to more deeply understand the customer, anticipate their needs and recommend next steps. Insurance companies that don’t create digital-first strategies when looking to attract or retain customers will find themselves rapidly falling behind their more advanced competitors.
Consumers are also becoming more comfortable with trading their personal information for these more personalized faster and efficient experiences. Ease, convenience, and value across the customer journey are now king and are shaping connected and on-demand insurance which will become the new normal over the next few years. With data-driven insight and artificial intelligence, insurance companies that use this data and these technologies to anticipate and deliver personalized experiences and value their customers’ needs will emerge as the winners.
A New Thought Process
Customer engagement in the insurance sector is evolving thanks to InsurTech’s like Lemonade, with renters insurance or Ladder in life insurance or Next in Small Business Insurance. Even large carriers like John Hancock with their Vitality program are changing the game. The emerging paradigm changes the relationship between consumer, insurer, and increasingly the community surrounding the insured. New and innovative customer engagement paradigm starts by engaging the end insured through the ecosystems that surround them. Those include not only smart homes, smart cars, smart factories, and smart mobile devices but also the places online where users search for, purchase or use goods and services. This new engagement paradigm is moving insurance from a sterile relationship of premium payments and claims checks to a relationship in which insurance combined with other services helps the user more effectively achieve their life, health, and business goals.
Insurance companies are utilizing modern methods to work with the consumer and altering their entire business process to include forward-thinking on-demand insurance. Leading Insurance companies are investing time and effort to research to understand the touch points and services in the digital ecosystems surrounding their current and prospective customers.
Customer Engagement in Insurtech
With that information, leading insurers are now able to define new customer segments and risk pools: Information they are using to develop new products, new business models, and new engagement models. Customer engagement is now being leveraged by insurers in the on-demand insurance world through a digital-forward methodology. By combining big data, with social media engagement strategies these companies can now understand and provide personalized coverage and engagement models that align in real time with the customer’s life stage, style, and circumstance or activity.
The major impact of staying connected with customers through engagement has been the increase in retention ratio. Pleased customers help an insurance company get ahead of their competitors in the connected insurance industry because personalization has already been built out. This approach not only increases the loyalty and retention of customers it’s also increasing underwriting profits while at the same time reducing customer acquisition and support costs.
Looking Toward the Future
This is the perfect time for insurance companies to capitalize on the digital ecosystems and services surrounding customers to drive new revenue and profits through new customer engagement paradigms. Customers are looking for experiences and products in the insurance industry that meet their personalized needs and can keep them engaged with not only the company but the products and services that are being offered.
Digital generation customer engagement is the first move toward the completion of a digital transformation. As Insurer’s taking this step to find that it’s helping them develop a far more customer-centric strategy and even more importantly a customer-centric culture.
While insurance companies are seeing new threats and challenges coming from the digital ecosystems surrounding customers the leaders are also capitalizing on new opportunities to connect with customers and position themselves as leaders at the next frontier of the industry.
Come listen to topics like this and others from innovative industry leaders at InsurTech FUSION Summit on June 18 -19 in San Francisco.
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