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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.

Engage the customers of tomorrow today

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.

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