Insurance's digital acceleration & the customer experience
From the largest, most complex organizations to the smallest and nimblest businesses, nearly every insurance company must consider when and how to transform into a digital establishment if they haven’t already, according to Eileen Potter, director for the insurance field at ABBYY.
Offering digital tools is becoming particularly important to meeting consumer expectations, with research suggesting digital customer service interactions will increase by another 40% in 2021. Demographic shifts among the consumer base, coupled with changes in behaviors and expectations, will drive much of this growth, according to Majesco.
Underscoring the importance of the customer journey, a 2019 TechSee study showed 39% of U.S. citizens canceled a contract due to customer experience during the two prior years. Among those canceled contracts, 11% were insurance policies.
While customer experiences are often viewed through a personal-lines lens, commercial clients are also looking for the same digital capabilities. Global research and advisory firm Gartner reported business customers are developing strong preferences for business-to-business self-service. Further, 44% of millennial business owners said they prefer no human interaction.
“In commercial insurance, customers and employees are asking: why are processes so manual and time-consuming when digital technology is seemingly ubiquitous in all other aspects of our personal life?” Potter asked. “If easy-to-use mobile apps, auto-filled e-forms, instant data validation, automated workflow, electronic payments and real-time status updates are available when ordering pizza, why can’t those technologies be implemented for commercial insurance?”
The client demand for digital tools hasn’t gone unnoticed, with 75% of organizations saying a seamless customer experience is a top or high priority on their digital transformation journey, Majesco reported. As a result, 48% of companies have made greatly accelerated progress in developing these seamless experiences.
To this end, a lot of insurers have been investing in customer experience centers during the past year, according to Iain Regan, chief revenue officer at Semafone.
“I always joke that the best digital journey is only as good as the user; think of an inexperienced driver in a Ferrari,” Regan said. “Buying a kettle on Amazon with one click is different than insuring three cars in the family. Insurers have a lot more complex touchpoints.”
A chief challenge in the digital consumer journey is when the customer simply leaves the digital ecosystem, he noted.
“How do you support them if they want to transact digitally? How can you keep them in that channel?” Regan asked.
One solution is to deploy AI and chatbots, which can handle manual repeatable tasks. However, these tools can only go so far and can struggle when “things stray” from the routine. Regan noted to truly support customers, a merger must occur.
“Insurers, being intuitive and intelligent, are blending that online and offline journey. They are looking to go all the way to the end of that journey,” he said, adding, “Now you can manage multiple customers with digital tools. That is really key.”
A point of entry for many, websites are a key piece to the consumer experience. Research from ACORD found that U.S. personal line websites typically do a better job at engaging customers than they do at enabling, highlighting a need to improve sites’ functionality.
“Delivering a superior digital customer experience is a critical imperative for insurers,” ACORD President & CEO Bill Pieroni said in a release. “The digitally mediated consumer habits developed during the pandemic are likely to persist, particularly as they reflect a previously existing trend toward digitization of insurance processes. It has become increasingly clear that delivering a quality digital customer experience is key for continued success.”
Additionally, aggregator sites, which ACORD included in its study for the first time, ranked relatively low compared to carrier websites.
“While we have seen many websites improve relative to previous iterations of the study, the laggards have fallen even further behind,” said Pieroni. “As in almost all other facets of the insurance industry, investing in digital capabilities — and adopting a new digital mindset — has become a prerequisite for insurers trying to stay relevant and competitive.”