After years in the technology wilderness, the insurance industry has woken up to the benefits innovation can deliver. Last month commercial insurer AdvantageGO’s survey of the sector’s c-suite found upgrading technology was their number one priority. From drones and big data, to artificial intelligence and blockchain, brokers, underwriters and insurtech disrupters alike are exploring how the next big leap will revolutionise the market. And while the opportunities on offer to insurers will continue to expand, customer experience is one area we’ve already seen new technology have a marked impact.
The lion’s share of insurers are now using automation, mobile apps, webchat and online only platforms to push customers down the self-service route. Doing this lowers costs, boosts revenue and lets companies reallocate human capital to handle more complicated, strategic tasks. But, crucially, these customer experience delivery methods are perfectly suited to insurance policy management. Automated claims processing and pricing is fast, convenient, and, in the best cases, highly intuitive and accessible to a broad spectrum of consumers. In a climate where digital is now considered default, insurers would be remiss not to invest heavily in it from a customer experience point of view.
Yet, despite the benefits, insurers should still err on the side of caution when heading down the digital only route. There is a danger that providers skew their offerings towards a younger, more digitally literate demographic and forget the needs of less tech savvy customers, who have deeper pockets and higher expectations of the service they receive from brands. For some time now, big industry players have been segmenting their businesses, product offerings and customer experience strategies to serve specific demographics. The problem with this approach is it can ignore the reality of who is controlling the policy’s preferences.
For example, young people are a lucrative group for insurers to target, especially since new technology like telematics has allowed providers to lower the risk associated with covering them and offer policies that aren’t prohibitively priced. However, this demographic is now less financially independent than previous generations. They’re relying on support from parents for longer. Legal and General’s recent report on the wider issue discovered 25% of 25- to 44-year-olds it surveyed received support for home and contents insurance. This means the consumer ultimately making the purchasing decision could be much older than the demographic the insurer is targeting.
If this user becomes dissatisfied with an online only, digitally focused customer journey that’s been designed to accommodate the preferences of their dependents, they will take their business elsewhere. Insurers can’t afford to let this happen in a market where intermediaries dilute brands down to their price and proposition and make switching policy providers easier than it’s ever been. In the case of parents controlling their children’s policies, this group are far more likely to select added extras, like breakdown cover, making the financial impetus of serving the demographic even more pressing.
To adequately serve as broad a spectrum of customers as possible, insurance providers must ensure policyholders can resolve problems and queries if the digital, automated elements of their experience offering fall down. Doing this requires the provision of a frictionless customer journey that links automated platforms to human staff and an awareness that service must be delivered using the channel the specific customer is comfortable communicating with. This means an investment in digital infrastructure is crucial, but also an honest evaluation of the performance of automated channels must be conducted. If a service isn’t delivering it should be replaced, or rescoped with more human involvement allocated to it to make it effective.
These principles will become even more pertinent as the market evolves. The insight afforded to insurers through big data and sophisticated analytics technology will ultimately herald the end of market segmentation. Insurers are already using the quantifiable, structured information made available through digital channels to tailor customer experiences and products to individuals, not demographics. Personalisation will soon be the norm, but this means the connections between channels that deliver experience will be even more important. Getting this right today will help insurers take their customer experience offerings into the future, without alienating customers that offer an invaluable source of revenue.
The preceding was an opinion piece written by Phil Crossley, sales director of Parseq’s Contact Centre division. The views expressed within this article are not necessarily reflective of those of Insurance Business.