In my last post, I discussed how insurance companies that demonstrate empathetic knowledge of their consumers and deliver tailored, real-time solutions will build on their noble purpose and gain competitive advantages in a digital operating environment.
So, where can you begin?
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It starts with putting your customer in the middle of your operating model. Instead of the traditional insurance value chain: (Shop >> Buy >> Service >> Fulfill), which was built for carrier efficiency, let’s start by thinking about the experiences that highlight the customer needs and develop interactions based on those:
- Explore: For those of us without an actuarial background, insurance products can be complex. We know we need them, but we don’t often understand the complex terms required to feel confident in our decision. What BI Limits did you choose? Did you select term, whole life, or universal indexed life, and why? Demystifying and simplifying the process to help the purchaser feel confident that the product they purchased is protecting the risk they seek to protect – it ties the experience into insurance’s noble purpose.
- Purchase: Of the 74% of insurance buyers that begin their journey online, only 25% will purchase their policy using the same channel. Therefore, ease of use must be considered, not only from a consumer standpoint but also from the standpoint of agents selling the product. Agents play a critical role in the claims and underwriting processes of a carrier when selling policies, so enhancing their experience can help improve their performance. According to a 2020 study, only 39% of agents improved their year-over-year performance, so there’s a lot of room for improvement.
- Use: There are few things more stressful than having to file an insurance claim. You’ve already had something bad happen, and you are trusting your insurance carrier to make it right. Digital tools are helping improve claim satisfaction with better communication and faster processing. Insurers should also consider how to use the data they possess to help their customers prevent claims (and help control cost!) lowering risk factors?
Carriers that do not adjust to focus on the customer will face strong headwinds. According to JD Powers, only 29% of insurance customers are satisfied with their current carrier, and 65% of customers have discontinued their relationship with a brand after a single poor customer experience.
Customers don’t think digital – they ARE digital; firms must challenge traditional operating models and leverage digital tools to create an authentic relationship and repeatedly earn trust, placing the customer in the middle of this relationship.