>Insurance is a complex business that involves multiple processes, such as renewing policies, dealing with customer queries, and processing claims.
This complexity is compounded by the urgent need for carriers, who must shed their old image and embrace digital transformation.
Why? It’s easy to see why. Today’s consumers are well-informed and will compare your services not only with those of your competitors, but also with B2C industries that offer a customer-centric interaction.
To add to the already heavy burden, it is crucial that insurance companies maintain good relationships with their customers throughout their journey and not just during a crisis.
Insurers face many challenges in maintaining their operations in this dynamic environment. It’s not surprising, therefore.
What are the key flashpoints?
1. A customer-centric approach is lacking
Insurers didn’t have to worry about how their customers perceived them. This was the basis of their model for many centuries.
However, times have changed. There is a shift in consumer behavior regarding insurance in this digital age. They aren’t interested in blanket products because they lack innovation and context.
Insurance companies may offer contextual insurance instead of selling accident insurance to 25-year olds. You can inform the individual who is taking a road trip about the availability insurance coverage for the duration of the trip. Insurance companies continue to use the old practice.
Insurers who go online will ask their customers to complete lengthy forms, Q&As, and other information. It is a big investment of time and effort that people will avoid. It shouldn’t surprise that only 20% of Insurers and Reinsurers feel they meet today’s high customer expectations.
Source: Twitter
64% of customers want their insurers understand them. IBM study: Elevating customer experience in insurance.
This video explains how insurance works today.
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2. Data use to improve experiences is difficult
Insurance companies have been collecting a lot of data for a long time. They face difficulties when using data to improve customer experience. These are the reasons:
a. Different channels have been created by insurance companies to communicate with customers
Insurance companies have, for example, established call centers to fulfill customers’ expectations. They also offer lengthy forms online and offline, as well as agents. They lack information sharing and communication between departments, despite having a lot of data.
This creates inefficient organizational processes and data silos, which can hinder healthy communication. Insurance companies are unable to benefit from the vast array of data and analytics potential.
Source: naviant.com
b. Customers expect that insurers’ products will work for them in an individual, data-centric manner
Traditional insurance companies fail to use the data available and push their products based only on trend data. Auto insurtech companies are now tracking customers’ driving habits to determine their premium. Contrary to traditional insurance companies, they do not use data to connect with customers, creating a poor customer experience.
3. Trustlessness
Many people believe that insurance companies don’t provide complete information about policies. Some people are uncomfortable sharing their personal information with insurance agencies. According to the IBM Institute of Business Value, 42% of customers do not trust their insurance company. Trust is more important than ever as the world is changing.
4. Legacy technology challenges
Many legacy systems used by insurers have been around for many decades, with some in use since the 1960s. They use outdated development standards that are limited in functionality and usability. These limitations create the following problems:
High maintenance and staffing costs. Limited innovation and growth
McKinsey’s Digital Disruption in Insurance report found that legacy insurance systems spend more on IT and operational costs than Insurtech companies. Why? The reason? Customers now expect fast, transparent and personalized services that are easy to use.
Unfortunately, IT will need to be the core of any insurance company if they want to keep it afloat. They must invest heavily in IT capabilities and modernizing their core platforms. This level of spending may be difficult for some because digital technology is destined to cause premiums to drop.
Image source: mckinsey.com
Reuter’s events insurer also found that the biggest challenges facing Europe were ‘Lack innovation capabilities’ as well as ‘Legacy system’.
Despite the obvious benefits of legacy modernization why is it still being held back? Fear of disruption in business is the number one obstacle, followed closely by the cost of data migrating.
After we have examined the challenges facing the insurance industry in order to keep up with the modern times, let us now address the elephant in a room: How can insurance companies think like customers?
How can you tackle these challenges?
Insurance has served a wider purpose than just generating revenue, profit or sharing in shareholder value. Insurance’s role in providing security and peace of mind for consumers and businesses has never been more important. It is time to renew your purpose. We’ll discuss the actions that you should take and the potential benefits we should focus on in this short.
Let’s take a look at the digital solutions we can use to solve these problems.
1. Sharpen productivity and realign your costs
Do your agents waste time answering the same questions to every customer? Insurance companies must stop relying on manual workflows and overstaffing, even though it can be mentally draining and demotivating. This can eat into your finances. Consumers today want simple, straightforward, and easy things. These strategies can help you increase productivity.
a. Eliminate redundancy
Make videos that include FAQs about all policies you sell, and put them on your website. If they have questions about the current policy they can refer directly to the website to get the answers.
Image source: allstate.com
Allstate, for example, has videos of all policies so customers can understand the details.
b. Derive instant data
In addition to the previous pointer, it’s important to gain insight into who has watched your videos and how often. Video analytics can be a tremendous help in this area. Businesses can gain a wealth information from this data. You can find details about the demographics, viewer profiles, timeline reports, and other relevant information. This information will allow you to personalize your outreach. This will allow you to personalize your outreach and increase your business productivity.
2. Digital transformation: Create a digital enterprise.
Legacy systems must think beyond traditional ways of handling insurance. It is crucial to re-engineer claims and customer service in order to improve policy processing and retention. Digitalization is essential for legacy systems.
PWC conducted a survey and found that 41% of policyholders had problems with their insurers. They are more likely or less likely to switch providers because of a lack digital capabilities. Here are some ideas for how legacy systems could go digital.
a. Onboarding of customers
Innovative platforms like Lemonade make it easy to purchase small-ticket insurance. Customers have come to expect the same seamless sign-up process in the commercial insurance market as when applying for any policy. The verification process can be more rigorous, but the onboarding process does not have to be slowed down by paperwork and new technology.
Image and information source:reallygoodux.io
Lemonade is a disruptor of legacy systems and has entered the insurance industry. You can receive an insurance quote in 90 seconds.
b. Underwriting
The most important part of insurance is underwriting. It heavily depends on historical and customer data. These data are kept in different ways in most legacy systems. This data must be checked by the users before they can issue a policy to the customer.
Users don’t need to log in to different systems to use a digital approach to underwriting. This increases efficiency and speeds up policy issuing. Automating tasks in the process can be done by underwriters, including passing information between departments or analyzing documents from third parties.
Future Generali, an insurer solution, has restructured its architecture and replaced paper-based systems by automated and efficient workflows.
This is the end result
In just two months, 38 automated processes were fully functional. This resulted in a 50% reduction in the time it took to underwrite their most complicated offers. Due to improved productivity and shorter processing times, the organization was able to save 60% on its costs.
Image source: life.futuregenerali.in
c. Self-service
Insurance companies can now use interactive videos to explain policies and their complexities instead of having to meet face-to-face or spend hours on the telephone explaining them. Customers have the ability to choose the best policies for them.
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This will help them in the following ways:
The customer can be presented with questionnaires in order to achieve a personalised solution at the end of the video.Customers can also submit questions, or leave comments for the customer service agents to respond to.
3. Prepare your workforce for the new world
Invest in the “digital” insurance sales rep. As sales processes change, you’ll want to prepare your employees to embrace the digital world than ever before. Look for ways in which the processes can be made quicker and easier so it’s easy on your workforce. Investing in videos can not only make them ready to face the demanding customers but also share a wealth of knowledge at a fingertip.
Selling Insurance – What has changed
It is true that the pandemic shook up an industry slow to embrace change to figure out new ways of working in a matter of weeks, implementing major shifts in technology deployment and usage. The pandemic also reshaped consumer expectations, bringing virtual interactions into almost every aspect of life.
Policyholders and insurance aspirants are now expecting a digital approach to insurance. According to a Global Consumer Insurance Survey conducted by EY, it was found that 80% of customers are willing to use digital and remote channel options for different tasks and transactions. This shows that insurance leaders need to be equipped to evaluate and revamp their existing infrastructure.
As an industry that’s traditionally been dependent on in-person interactions, it’s challenging to transition to an all-digital customer engagement process overnight. Hence, the ideal approach is to start by digitizing the most critical parts of the journey – namely claims and underwriting.
With that in mind, let’s look at how the insurance industry can use videos for specific purposes.
Specific video use cases for insurance – where videos can make a difference
Optimize speed and accuracy of claim processing
Handling insurance claims is a costly affair. The longer it takes to settle a claim with your customer, the higher the costs for you. In fact, claims management amounted to 28.5% of total operating costs for European property and casualty insurers.
There is, in other words, a lot to be gained from digitizing your claims management process.
When your customers become the victim of personal injuries or suffer losses to their home and other property, asking your customer to record and send you a video so you can get a first-hand view of the damage will make things faster and quicker.
Watch this video to learn how companies are adopting videos for claim processing:
Are you concerned that you might lose the video after you have viewed it? All evidence can stored in the infinitely expandable cloud library, where it can then be reviewed and evaluated by the appropriate adjusters.
Streamline and improve the training process
Insurance companies must consider the best tools to improve the onboarding process of new employees. This is why leading insurance companies now facilitate newly hired agents with self-paced training videos that can help them learn and absorb knowledge about various information-intensive insurance products or selling how-tos.
Distribute product education videos to partners, sellers, and independent agents
It is difficult to understand insurance products before agents, partners or insurance brokers can begin promoting them. You can address this issue by giving them recorded videos so they have a better understanding of your policies.
Claim walkthrough
Do you remember when customers were required to visit your office to learn about the details of your policies? You don’t have to make that effort. Instead, you can screen record the steps and walk them through their claims. It’s easy to switch on your screen recording device and record the steps.
Conclusion
The pace of technology will continue to change rapidly. Insurance companies must be prepared to guard themselves against being pulled under its wheels. Virtual channels of communication like videos are essential to stay competitive. Insurance companies will have an advantage in the future by being able to customize messaging and experiences.
