Embracing new technologies that improve customer experience whilst reducing costs is not simply a matter of competitive advantage in today’s insurance sector, it is imperative for survival, says Giuliano Altamura.
Although digital adoption has lagged that of other sectors, a tipping point has been reached – traditional insurers simply must raise the bar to fend off the new breed of ‘insurtech’ startups whose mobile-first strategies and simplified user interfaces closely match the desires and expectations of modern consumers, especially the younger generation.
Here are three areas ripe for innovation that will help insurance companies remain ahead of the competition.
In the early days of m-commerce, many assumptions were made about consumer behaviour which have not been borne out over the last few years. It was envisaged that we would use our phones for basic research, but before the rise of mobile app technology few people imagined quite how prevalent purchasing via mobile would become. Recent research in the US has shown that mobile consumers are in fact 17% more likely to complete a full quote request form than those using desktop. Also, the average age of mobile purchasers was identified in the research as 29, higher than commonly imagined.
Yet despite the fact that mobile is a vital component of digital transformation, mobile-optimised websites and apps that facilitate purchasing are still not prevalent across the sector, leading to frustration among many consumers and defection to more digitally-savvy competitors. Many mobile offerings could be further enhanced by providing value-added services such as ‘find my nearest’ directories of car repair centres, prompts for renewals or claim reporting.
Lead the way in multi-channel
Mobile might be in the ascendancy but our habit of ‘multi-screening’ is ingrained, with many people even starting a transaction on one device and shifting to another to complete it. Also, consumers are displaying a growing willingness to switch between human and automated touchpoints, with Artificial Intelligence (AI) tools like chatbots increasingly being used to handle enquiries.
Social media as a channel is also playing a more prominent role, and its scope in insurance remains relatively untapped. Conversations can be initiated through Twitter, for instance, and simple queries resolved immediately, or transitioned to other channels for appropriate handling. Such proactivity and digital agility will undoubtedly win customer approval.
Although a properly implemented multi-channel infrastructure poses an array of technical challenges for insurers – not least because we expect joined-up, seamless navigation between channels – it can deliver huge benefits in terms of customer loyalty and cost savings. This is as true for direct as for intermediated providers.
Take a 360-degree view
Being able to access an up-to-the-minute overview of each customer’s buying history, cover and purchasing behaviour across all channels is not a new aspiration, but it has still not been widely achieved. Yet the 360-view is the only way to maximise cross-selling opportunities for insurers and brokers, and to deliver the type of personalised experience that end-customers expect today.
The way in which customer information is stored in ‘siloes’ usually presents a barrier to data insight and the single customer view. Specialist systems integrators are being called upon to help the organisation manage back-end processes and bring separate data streams together – the platform from which new, intelligent front-ends can be created.
The power of Big Data-driven infrastructures could be supercharged if AI is added to the mix, with its potential to deliver predictive analysis to insurers and intermediaries. Already forward-thinking insurers are applying such technology to identify sales opportunities, gain greater insight into client value, and to model risk.
The way that insurers address each of these trends, which together form the backbone of digital transformation, will define their success not only in the long-term but right now. These are not futuristic visions, they are already having a very real impact on the sector’s ability to understand its customers, offer tailored policies through intuitive and appealing interfaces and to drive profitability of the business as a whole.
Giuliano Altamura is the Financial Services Business Unit Manager, Fincons Group