Like all things, customer expectations change. New technology, changing priorities, and shifting preferences drive such changes. A whopping 73% of customers leave a brand if they do not get a satisfying experience across touch-points.
Here’s what the Insurance industry is doing to stay on top of changing customer expectations –
1. Increasing Dominance of Artificial Intelligence in Customer Experience
The use of Artificial Intelligence is rising in the industry. The most common and obvious use of AI in insurance is the deployment of chatbots.
Chatbots automate routine interactions. The underlying AI engine weaves customised responses for customers in real-time. It factors in previous engagement history and other available customer-related information.
Chatbots offer superior service to human agents. It is available anytime, without placing the customer on hold. It integrates with other communication channels and improves the quality of engagement. If the AI engine reaches a dead-end, the bot routes the calls to the agent with relevant expertise.
Even if an enterprise does not deploy chatbots, AI algorithms could route conversations to the most qualified agent upfront. The underlying algorithm also help agents answer the customer’s question. For instance, the system offers agents multiple-choice cues for a question posed by the customer, scouring real-time through the possible responses.
AI helps insurers deliver a consistent experience across various channels. In today’s highly competitive world such consistent experience increases brand retention and eases the way for the customer. Businesses leveraging omni-channel engagement retain 89% of their customers. In contrast, businesses using traditional methods of engagement retain only 33% of their customers.
2. Increasing Popularity of Self-Service Options
Many customers prefer to service their policies by themselves. About 75% of customers prefer self-help to resolve simple issues. 81% of customers attempt to troubleshoot the problem themselves before reaching out to agents.
The increasing use of chatbots spreads self-service. Smart insurers also roll out self-service kiosks, apps, and easy online interfaces to facilitate self-service. Many insurers roll out intuitive apps designed for the customer. The app, with sleek interface, offer easy one-touch options to renew policies, access the most common FAQs, make a claim, register a complaint. Self-service frees up human resources to focus on complex tasks and reduce overheads.
Insurers have to beef up their FAQs and invest in pre-recorded IVR messages to aid self-service. Encouraging self-service without proper supporting infrastructure would more likely mislead the customer or degrade the CX.
3. Increased use of Analytics
Data fuels automation of work processes and advanced analytics. While the underlying data remains the same as before, analytic tools offer insurers new ways to make use of such data. AI-enabled and analytics tools scour available data on a customer and offer a 360° analysis of the customer’s needs which can be applied to create a more personalized service.
Marketers use analytics to understand the customer’s demographics and outlook. They tailor appropriate quotes based on such factors. The location of the customer’s house, the children’s school, club memberships, and more, all provide valuable cues on the insurance products the customer may most likely buy.
Agents apply analytics to unearth the risk factors associated with a customer and price such risks. A customer with a history of parking tickets, or who parks the car in the street at night is a high risk for the insurer. Many vehicle insurers in the US even charge a higher premium for red cars, perceiving a higher theft risk for the “flashy” color.
The biggest obstacle to the use of analytics in insurance is access to relevant customer-related personal data. This will change as customers become more willing to reveal their data in the increasingly interconnected world today.
Wearables offering real-time actionable data may lower premiums of life insurance policies. Conversely, it helps insurers identify high risk customers!
Carpe Data, an online tool, unearths online information on smoking or drug use. A public domain photo of a person smoking raises a red flag, while a photo of the person running a marathon shows a healthy customer.
Commercial trucks in the US have to mandatorily carry Electronic Logging Devices. These devices synchronize with the vehicle engine and record driving time. It offers accurate and reliable actionable data for insurers.
In 2020, insurers will get more access to live audio streams, recorded voice files, social media engagements, emails, and chats. Predictive speech analytics build a customer profile after assessing 200+ prosodic speech parameters. Such profiles illuminate customer behavior and preference with a high level of accuracy. The need to revisit transaction history, much of which is always outdated anyway, will become less important.
4. Enhancing the Customer Experience through Digital Transformation
Integrating CRM and real-time communication tools allow insurers to manage leads with little effort. The customers benefit through faster and more efficient processing.
Technology adoption leads to super-fast claims processing. Many insurers leverage technology to process claims the same day. Peer-to-peer insurer “Lemonade” claims to pay one in every four claims in only three seconds!
New-gen vehicle insurers allow insurers to upload the photo of their insured car involved in an accident through an app. The automated app may process the claim in a matter of hours.
Insurers processing property claims deploy drones to get into disaster zones. Drones capture information from areas and angles that human agents could never penetrate.
Delivering a seamless digital experience warrants a digital metamorphosis for the enterprise. Deploying the latest digital infrastructure and setup is only part of the puzzle. Enterprises have to force a culture-shift. Transparency, openness, and free sharing of information are important pre-requisites.
Smart insurers overhaul their systems to become customer-centric. They redesign systems based on customer convenience. They measure the effects of digitalization at different points in the customer journey. If necessary, they design a different digital journey.
5. The Rise of New, Innovative Business Models
In 2020, insurers will innovate through different business models. A cloud-based model catering to different geographical locations will become the norm.
The “always-on” culture prompt insurers to rely on direct-to-consumer touch points for distribution. Many start-ups position themselves with a digital-only channel strategy, eliminating agents. Many established insurers seek competitive advantage by implementing a digital-first strategy
The changing habits and preferences of millennials is giving rise to new risk categories.
Millennials seek usage-based insurance, episodic insurance and bundled products. They prefer coverage for short-term home rentals, travel delays, and event cancellations. As they prefer the sharing economy over asset ownership, traditional home insurance policy appeal less.
Changing behavioral patterns will soon mainstream cyber insurance, identity insurance, and coverage for cannabis.
Many insurers now allow dynamic change of coverage. For instance, millennials and Gen Z are likely to go on a trip without any planning. They may decide to go off trekking to the Himalayas, on impulse. Standard travel insurance do not cover high altitude trekking. Offering flexible add-on plans is a sure way to rope in and delight such customers. Catering to such trends, “Sure” enables customers to buy travel insurance through their app, even as they board a flight.
Insurers have started to roll out hybrid health-wealth offerings. Innovative products such as Employer-sponsored Health Savings Accounts combine financial planning with health-care. Insurers take up the onus of preparing individuals for future medical costs the way they now plan for their retirement expenses.
As the new millennium unfolds, insurers are busy rethinking their tools. The traditional USPs of a solid product, underwriting, and servicing claims remain the bedrock of the industry. Smart insurers apply real-time data and machine learning atop these basics, for better all-round effectiveness. They try to pre-empt losses rather than pay for losses and cover it up by collecting higher premiums.