Driving great customer experience: Three ways technology can help insurers overcome disruption
Traditional insurers are currently battling against a triple threat. First, there is a steady stream of new players entering the industry, with tech giants such as Amazon and Google dipping their toes in the water; creating a whole new range of competition with new advantages. After all, could any insurer claim to match the level of knowledge Google or Amazon potentially have of their customers? Second, customers are evolving along with the industry: becoming more tech-savvy, with growing expectations and a growing willingness to leave if those expectations aren’t met. Last, regulations are changing – from the data protection demands of the GDPR, to the more industry-focused Insurance Distribution Directive.
On top of this, research has found that more than a quarter of consumers in the UK believe insurance is the worst-performing industry when it comes to customer service. While on the surface this might seem bad news, it also represents an opportunity for insurers to use customer experience to differentiate themselves from the competition and strengthen themselves against the triple threat. Developments in digital, from online chat to content-rich emails, have transformed customer experiences in recent years: focusing on this technology represents an opportunity for insurers to improve customer experience and fend off disruptive forces.
With this in mind, here are three key ways insurance companies can use technology to provide an excellent customer experience:
1. Use technology as a friend, not a foe
With the likes of Amazon making inroads into the insurance industry, it would be all too easy for insurers to see technology as an enemy. However, like any tool, technology offers a wealth of opportunities when used correctly: such as new communication channels so insurers reach customers at the right time, with the right message, and over the right channel for that customer. Bain & Company said that “multichannel interactions tend to be more effective in garnering loyalty […] customers want easy, fast, convenient websites and mobile apps, and few insurers have been able to design digital tools that meet these expectations.” This is backed up by a recent Quadient consumer survey, which found 93 percent of insurance customers saying they want more choice in how they communicate with insurers.
The use of new technology to both communicate and provide essential services is a hallmark of the modern customer experience. Insurers that can embrace multiple modes of communication as they appear – whether that’s in the form of a chatbot, a wearable device or even the development of a new app – will find themselves at a considerable advantage. Failing to capitalize on the latest developments is not only a chance squandered, but an opportunity competitors will no doubt appreciate.
2. Harness innovation at the source
The most sure-fire way to get a competitive advantage from new technology is to invent it yourself. Some of the biggest names in the insurance industry have followed this maxim, increasing technological innovation by investing in start-up incubators. AXA has invested in around 20 initiatives, while MetLife hosted its fourth “digital speed dating” event in June of 2018. The event aimed to bring together cutting-edge start-ups and venture capital partners to explore how disruptive technologies could be applied at the insurance company. While not every insurer can afford a fully-fledged incubator, simply investing in partners and events can provide significant rewards.
While investing in new technology is always to be applauded, companies will also need to decide where they want that investment to be focused. For instance, will technology make back-office operations more efficient and accurate? Or will it be used in more directly customer-facing roles? Ultimately, any use of technology should benefit the customer in some way, but companies should ensure they are investing at least some of their resources in services that will provide a visible result – whether that is more accurate premiums, ongoing advice on how to minimize the risk of a claim, or adopting technology to offer a completely new experience.
Finally, companies shouldn’t hide their technology light under a bushel. Instead, providers should use the outcomes of these incubators to open up the conversation with customer: letting them know about new services and ideally upselling to an even better experience.
3. Build relationships on your strengths
The modern consumer is fickle, often prioritizing simplicity and cost over brand loyalty. Often this comes down to accuracy: offering a more accurate, personalized package can help to sway consumers and convince them they are getting the best possible value for money. For instance, Quadient research has found that more than half (56 percent) of current insurance customers would like their insurer to use technology such as health monitors or connected cars to provide a more accurate premium.
Traditional insurance companies should use this to their advantage and combine their age-old experience with new technologies that allow them to provide ever more accurate premiums. This will help to overcome disruption from new entrants to the market which, while they may have an attractive pitch, have no experience in underwriting or even processing claims. It will also help to build a long-lasting relationship with the customer that will keep them loyal for years to come. Failing to provide this kind of personal service will only mean that customers take their business elsewhere when it comes to renewing their policy.
An opportunity to thrive
The digital era has brought about a new generation in insurance, which in turn is an opportunity for insurers to thrive and improve on the service they give their customers. Through the use of technology, insurers can begin to communicate with their customers in a way that suits them; use innovation as a way to open up the conversation even further; and combine new technology with established knowledge to provide more accurate, more affordable and ultimately more attractive services and products.