CX consulting firm Walker predicts that by the year 2020, customer experience will overtake price and product as a key brand differentiator.[i] To remain competitive in the consumer-driven era, EY advises insurers to provide an omni-channel environment where consumers can move seamlessly between channels.[ii]
It’s a difficult feat for insurers to accomplish given the siloed nature of their legacy systems and lack of digital readiness, but according to Rick Huckstep, industry influencer, there is a way to leverage these massive core systems while gaining digital capabilities, through partnerships with InsurTech digital platform providers.
Huckstep says that digital platforms allow insurers to capitalize on investments already made in technology by building the agility and responsiveness necessary for online distribution into the new digital front end. But what should insurers look for in a digital platform to ensure they can deliver the omni-channel environment consumers are demanding?
Excel with Digital Platforms
A global study of 1,000 insurance executives conducted by Insurance Nexus revealed that 59% of insurers are already relying on relationships with third-party resources to realize digital innovation goals.[iii] In PWC’s CEO survey, over 80% of the executives responding plan to do so over the next three to five years.[iv]
That’s because digital platforms can speed the transformation of insurers and put them on the fast track toward digitally-enabled direct-to-consumer distribution, but simply offering online channels of engagement won’t necessarily ensure carrier success.
To meet consumer experience standards in today’s world, insurers should seek partnerships with digital platform providers who focus on providing the following key attributes.
Consumer-Centric Online Storefront
Accenture surveyed over 32,000 consumers globally and determined that as many as 50% are already purchasing online.[v] As insurers improve the strength of their digitally-enabled direct-to-consumer channels, those numbers are sure to escalate. Executives surveyed in predict that 90% of interactions will occur through digital channels within the next five years.[vi]
As consumers move from the more personal experience of researching and purchasing coverage through an agent to digital channels, the insurer’s online storefront becomes representative of their brand. Whether consumers establish a relationship with the insurer and become a loyal customer or seek out other insurers who offer a more personalized online experience, will all depend on the strength of the online store.
Big Commerce found that 78% of consumers feel more comfortable buying online when pictures that depict personal interactions are included as part of the online storefront. This highlights the need consumers have to feel connected to their insurers while still engaging in anytime, anywhere purchasing.
Digital platform providers who focus on creating a customer-centered buying experience by improving the efficiency of the quote-to-issue lifecycle, demonstrate a respect for the consumer’s time and instill good will. Automated prefill capabilities, for example, take much of the burden of completing an application off the customer and put it on the insurer, demonstrating that the customer comes first in the insurer’s operations.
The ability to automatically quote multiple policy types from a single application is another way insurers can attract consumers to the online storefront and establish loyalty.
A leading insurer who sells property lines through digital channels recently offered consumers the option to receive quotes on homeowners and auto by filling out one simplified application. The insurer now consistently provides 80,000 quotes a month to online insurance consumers.
Uniting Operational Silos for Cross-Channel Consistency
According to , the largest group of insurance customers use both online and offline channels when interacting with insurers. This is particularly true in distribution where J.D. Power found that 74% percent of shoppers purchasing coverage start transactions online, but only 22% actually close the purchase through a consumer-facing call center.[vii]
The situation becomes complicated for insurers when you realize the fluidity required to meet consumer expectations for cross-channel engagements. Too often the consumer is asked to restart the transaction when changing from one channel to another, negatively impacting the customer experience.
This happens because of the disparate and distributed nature of insurers’ back-end systems. With customer information locked up in operational silos, insurers have a difficult time creating a cross-channel experience that meets customer standards.
According to Huckstep, digital platforms can solve for operational silos by using existing core systems as the system of record and building the agility and visibility necessary for omni-channel engagement into the digital front-end.
It’s easy to envision the process by breaking it down. The web front-end is consumer facing, acting as the online storefront for consumers and agents alike. Information entered into the storefront is automatically updated across all core systems, courtesy of the digital distribution platform, creating a consistent source of data that is visible from a single vantage point.
When consumers move from an online channel to the consumer-facing call center during the purchasing process, agents have complete visibility into information entered online, facilitating a seamless transition from one channel to another.
Managing the Digital Transformation
Aite Group has found that only 20% of auto insurers and 7% of homeowners carriers are currently selling products online,[viii] but Accenture reports that as many as 51% of consumers are already purchasing online. That’s a large chunk of revenue being distributed between less than a quarter of the market’s carriers.
To grow their digital footprint, insurers will need to change the way they engage with consumers. For instance, Mintel’s study of shoppers who have property and casualty insurance, revealed that a growing number (39%) feel that insurers should provide apps to make buying and managing policies easier.[ix]
Progressive has recently introduced HomeQuote Explorer, an app that simplifies the purchasing of homeowners coverage by offering consumers a simplified application and four quotes on coverage.
According to Tricia Griffith, Progressive CEO, “You fill in a couple fields, and you get a home quote from one of four companies. One of them is the Progressive home quote and then [quotes from] three other companies that we work with closely.”
The service is free and allows consumers to comparison shop coverage from a group of carriers that Progressive trusts to provide quality customer service.
Digital innovations like these have broad implications across the organization. Seasoned digital platform providers, who have undergone many successful transformations, understand the challenges. They’ve created transition plans and have the talent on hand to guide the organization and ensure results following implementation.
Fast-Tracking Omni-Channel Distribution
Accenture reveals that to their competitive advantage.[x] Platform-based business models are the goal of 94%, creating ecosystems where insurers and outside digital resources join forces in synergistic relationships that promote asymmetric growth.[xi]
As insurers embrace relationships with InsurTech providers on digital distribution platforms that unite back-end systems and provide a single vantage point to the information contained therein, they are able to rapidly evolve into omni-channel insurance providers, seamlessly meeting consumer needs as they move across various mediums.
A top-five insurer partnered with a digital platform provider. They built combined teams with shared strategies and goals to meet the insurer’s objectives and enable an initial rollout of digital capabilities within two months. Since that time, the insurer has doubled sales on a year-over-year basis.
Because the platform is scalable, the insurer continues to experience growth by adding agents, products and markets with no down time or service interruptions. As consumer preferences evolve, the insurer is able to expand channels and products to ensure future profitability.
Omni-channel engagement is the way of the future for the insurance industry. How is your organization meeting the demands for change?
Kathleen Garlasco | Executive Vice President of Marketing at BOLT
[i] “Customer Experience – the New Competitive Battleground.” Guardian News and Media Limited. The Guardian. Web.
[ii] “Digital Transformation in Insurance.” EY, 2017. Web.
[iii] “InsuranceNexus Global Trend Map 2017.” FC Business Intelligence. InsuranceNexus, 2017. Web.
[iv] “Insurances’ new Normal: Driving Innovation with InsurTech.” PwC, 2017. Web.
[v] “The voice of the Customer: Identifying Disruptive Opportunities in Insurance Distribution.” Accenture, 2017. Web.
[vi] “Opportunities Await: How InsurTech is Reshaping Insurance.” Global FinTech Survey. PwC, 2016. Web.
[vii] Paul Lucas. “Why Auto Insurance Agents are Still Needed in the Digital Age.” Key Media. Insurance business Magazine, Jan. 25, 2017. Web.
[viii] Jay Sarzen. “Disruption in P&C Insurance Distribution.” Aite, Feb. 25, 2016. “Web.”
[ix] Caitlin Moling. “Insurance Marketing Trend 2018.” Mintel, 2017. Web.
[x] “Insurance Technology Vision 2017.” Accenture, 2017. Infographic. Web.
[xi] “Insurance Technology Vision 2017.” Accenture, 2017. Infographic. Web.