The Importance of Creating a Digital Strategy for Online Insurance Companies
With the constant evolution of business and customer care online, insurance companies need to hire or work with a digital architect and develop a digital strategy to modernize their core business.
Why insurance companies need an online architect
Traditional insurance companies have been surprisingly resilient considering how digital technology has started impacting the sector through Insurtech - but this is starting to change. The rise of digital technology is affecting how products and services are delivered, the products and services themselves and even the business models.
Consumers are now living in a ‘’one click world’’, demanding instant access, transparent pricing, clear product information and offers more tailored to their needs. In this respect, traditional insurers have been lagging behind but are now realising that digitising their business improves their bottom line. For example, it has been shown that digitisation can result in a 30% saving in customer claims costs1 as well as improving customer satisfaction though faster processing times.
A new digital strategy
Insurance companies need to develop a digital strategy in order to digitise their core business. A digital strategy involves looking at where and when the company makes money, the forecast of how that changes in the future, the strategies to achieve that and the initiatives that need to be implemented to drive the change. As the Covid 19 pandemic spreads, insurers are seeing a plunge in travel insurance which can typically account for 80% of their online business. On the other hand, insurers are experiencing the highest levels of consumer search traffic ever for life insurance specifically. Compared with the past several years, volumes in the first few months of 2020 are 25 to 50 percent higher and conversion rates remain strong, giving insurers a driver to put more life insurance online.
The implementation of a digital strategy alone will not be enough. Companies will need to frequently review their strategy as technology advances, customer behaviour changes and competitors emerge. Attacking the digitisation of an insurer is a multi-step process starting with getting the portfolio online in the current situation. Down the line the focus should be on digitally redesigning entire customer journeys - from purchasing a policy or making a claim to the moment of reimbursement. Those insurers who are unwilling to face the digitisation challenge are going to find themselves in the “also rans”.
For many customers, interactions with insurance companies can be frustrating - complicated form filling, duplication of information to be entered, and long drawn out claims processes to name but a few. Digital technology and the redesign of the customer journey should allow customers to engage effortlessly over touchpoints and engage customers on a personal level.
Claims customer journey
Let’s take a look at the customer journey for a house contents insurance claim. This can involve a phone call to the insurance company to register the claim. The need for an assessor to visit the property to take photos, assess the claim and generate claim reference. Submission of quotes by customer for repair of damage. Telephone calls / emails to check the progress of the claim. Long drawn out process to agree reimbursement. Reimbursement confirmed and finally paid. The process has any number of touchpoints and for many proves to be a time consuming and frustrating process.
Now, let’s look at how the customer journey might be redesigned. Instant reporting of the claim through mobile application. Information relating to the claim collected by simple Q&A along with photo documentation upload. Calculator tools for adjusters to assess damages more accurately, faster and more consistently. Claim updates are sent by SMS, Whatsapp or Facebook. Communication with chatbot through digital channels. On settlement, payments are automatically made into a customer’s bank account. Redesigning the customer journey should focus on increasing customer satisfaction, improving efficiency by reducing claims expenses and improving claims handling accuracy.
Whether looking at the customer journey for taking out a life insurance policy, a house insurance renewal or making a travel insurance claim, insurers need to make sure that they adopt a customer centric approach and an end-to-end assessment of customer interactions.
From this, a true digital value proposition and transformation roadmap can be developed to bring the insurer into the digital age.
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U+ has worked with global brands on bringing new digital products to the market and helping them get their existing products and services online using the same process. Let’s work together.