Engage the customers of tomorrow today

Engage the customers of tomorrow today

Insurance has traditionally been considered a grudge purchase, driven by the legal requirements for cover and a desire for financial protection. So much so that 41% of respondents in a Consumer Intelligence poll said "a necessary evil" was the first thing that came to mind when thinking about insurance.

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While this may be nothing new, the reaction of the industry certainly is. With insurtech companies having raised $3.71bn (£2.99bn) in 2016, almost half the insurers responding to a PwC survey feared 20% of their business will be lost to standalone fintech companies within the next five years. And with good reason too. Over three-quarters (77%) of the Consumer Intelligence respondents would consider supporting start-ups who are trying to disrupt the insurance industry.

So what are these innovators doing differently? They have implemented different models, built around customer engagement and aligned to everything else people do in their lives. As a result, the 300-year-old model of customers paying to transfer risk and insurers paying out claims is moving to one of real-time risk management and prevention. 

The development of value added services based on the connected car, home and person will be fundamental in this, but we have already seen the introduction of dedicated on-demand protection for the gadgets millennials own and cheaper life insurance for individuals who regularly exercise at the gym – all of which add value to the customer's lifestyle and move insurance away from being a grudge purchase. 

To remain in the game, traditional insurers must be able to provide a retail-equivalent customer experience and greater levels of engagement and touchpoints. Customers are now demanding the same omni-channel experience from their insurer that they receive in other areas of their life, such as retail. So whether customers choose to go direct online, visit an aggregator or broker, or call a contact centre, they will expect a consistent journey and to be able to hop from one channel to another. 

Moreover, supporting and delivering a consistent look and feel across every device is simply a hygiene factor. Insurers need a responsive website that can be viewed on mobiles, tablets and desktops, regardless of the browser being used. 

In addition to the ability to start their journey on one device and finish it on a different one, if customers have any questions en route, many will want to communicate with a chatbot rather than engage with another human, so that is another channel insurers need to incorporate into their strategy. Gartner predicts that, by 2020, 30% of web browsing will be done without using a screen. Chatbots and intelligent personal assistants, such as Amazon’s Alexa, are moving in and insurers need to be able to engage with their customers via this new route.

By understanding the channels people choose to interact with them, insurers can improve customers' journeys by aligning future communications to the initial engagement. If an individual has chosen their policy online, then they will expect to receive their documentation online and to be texted, rather than receiving a paper version in the post.

 Delivering such a digital experience requires more than simply taking the legacy question set and replicating it online. By incorporating their internal knowledge of customers with external data from, for example, Google Maps, insurers have enough insight to answer a number of these points themselves, leaving a streamlined question set that simplifies the customer journey.

 Taking motor insurance as an example – with just the driver licence number, vehicle registration and cover start date, insurers can quote for a policy. The driver licence number provides the driver's name and address, which SSP then validates through data enrichment via the electoral roll register. From this SSP will do a credit reference check, use MyLicence to return NCD and claims history, and use LinkedIn to get their job occupation. Most of the information required for rating and pricing is available through data enrichment, and if used can transform the customer journey.

This demonstrates there is no longer a need for six pages with hundreds of questions when a single page will do. Moreover, the data insurers obtain in this way is likely to be more accurate. How many homeowners could give a precise cost for rebuilding their property following a flood or fire? 

By knowing their customers in this way, insurers can reuse data, so if the individual's address changes during the term of the policy, this can be updated across all the policies they hold with the same provider. In addition, any new requests that don't fit with the customer's profile should set alarm bells ringing, such as if a parent is fronting a policy for their child who has just passed their driving test. 

All of this might seem a lot for insurers to take on board, but it is the journey that customers have come to expect.  By taking these steps and making full use of the data available, insurers can not only provide an omni-channel customer experience, but also develop innovative products and informed risk rating, as will be discussed in future articles. 

SSP has the unique expert insight to help insurers realise all of these benefits from their digital strategy so, to find out more, please contact us.

Digital and mobile trends in insurance

Capgemini talks digitalisation

How digital are you?

With an increasingly complex regulatory environment and a fast-changing consumer, the need for insurers to reassess digital capabilities and agility has never been greater. Though insurance companies seem to understand the importance of digital transformation, few are capitalising on the opportunity in a meaningful way.

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When it comes to the “why”, the message has definitely landed with CXOs, but the debate is quickly moving to the “what” and the “how”. Clearly, opportunities are being developed based on the internal and external benefits: primary areas are those that impact top line or brand value, ranging from improving customer experience to introducing new product offerings. But digitalisation is not just about customer acquisition (where historically much of the focus has been); it is also about transforming internal processes and leveraging the power of data, which are ultimately the engines that drive organisational performance. In the future, the most successful insurance companies will be those that:

  • Are fast-learning and technology-savvy, and adopt a customer-centric strategy
  • Can foster a culture of change
  • Leverage digital tools to improve speed, agility and insights

Mobile in insurance

Mobile offers multiple opportunities for insurers: it allows them to interact with and service existing and new customers through an additional channel, design new product offerings, and manage internal operations more efficiently. Many insurers have started tapping the possibilities offered by this channel. For instance, 1st Guard Corp., a truck insurance firm, leveraged the mobile channel to reach its ever-mobile trucker customers. It launched an app, called Trucker1, which enabled independent truckers to sign up for products while on the road, reducing cycle time by 10%-20%. An Indian insurance firm ICICI Lombard has used the mobile channel to increase productivity of its surveyors by 30-40%. The firm’s surveyors have been given iPads which allow them to pull up case details, take pictures, tag these to various categories, and complete the process remotely, enabling the firm to manage claims more efficiently.

Even though most insurance companies have taken up multiple mobile initiatives primarily through apps, our analysis of user ratings on app stores suggests that none are really seen by the market as “killer” apps. Most of these apps tend to have limited features, are not well integrated into the insurer’s operations and product lines and do not offer a seamless multichannel experience to the customer.

Insurance firms are now ready to move to the next level of maturity in the mobile channel. However, they need to ensure that their efforts match customers’ expectations. In a recent cross-industry survey conducted in the US, only 39% of insurance customers said that their providers cater to them in the digital channels (SMS, email and mobile apps) the way they prefer - putting the insurance industry behind the banking, mobile and cable industries. We believe that insurance firms now need to consider seven key areas which will differentiate the winners from the losers in the mobile space:

  • Define clear objectives for the mobile channel upfront, which will help in planning activity and assessing results
  • Define a sustainable app platform strategy which is adaptable to the fast-evolving mobile technologies
  • Integrate mobile within the product and omni-channel environment in order to maximise benefits
  • Integrate mobile functionalities with operational and back-end processes to drive operational efficiencies
  • Invest in app promotion, through various mediums, to increase usage and visibility
  • Adapt the organisational structure and governance model of the mobility unit (central, local or local and central) to manage scalability and channel needs effectively

So, what next?

Rapid expansion of digitalisation and ever-changing consumer behaviour are forcing companies to reassess and adjust business models. The truth is that future success - or, indeed, survival - of insurance companies will ultimately depend on how well they are able to serve their customers. Gone are the days where insurers enjoyed a “push model” where a policy-centric and acquisition-focused culture was sufficient to drive sales and performance. Insurance companies will have to undergo major transformations in the next few years. It is vital to make the right choices, and to develop the enterprise capability to adapt and change on demand - a true customer-focused operating model that requires a series of new operating models.

It goes without saying that to operate a customer-focused model successfully, robust customer insights and analytics capabilities are critical. The most successful insurers will be those that are able to capture, analyse and act on insights with speed and precision. Insurers will need to compete and differentiate through a rich customer experience across the entire value chain, from research through to renewal. Tools such as social media and other analytics and predictive tools can help companies serve customers and foster innovation. The new customer-focused operating model will also require insurers to streamline legacy systems to provide a single view of customers.

It is widely accepted that digitalisation plays a key part in transforming businesses today, but few insurers have been able to move beyond implementing simple tools such as social media or mobile applications. With a rapidly-changing regulatory, economic and consumer environment, the most successful insurance companies will not only leverage digital tools to enhance processes, but also actively adopt a customer-centric strategy and foster a culture of learning and change.

Capgemini is at the forefront of defining the digital mandate for our insurance clients and helping to transform business models for the exciting journey ahead.

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