Why Isn't Customer Experience Better?
Whether you're browsing an article concerning the latest trends in insurtech or hearing a panel of insurance industry disrupters discussing customer acquisition strategies, it's hard to prevent references about emerging technologies such as machine learning, artificial intelligence, chatbots and knowledge analytics. But, have these digital advancements truly transformed the experience for purchasers shopping for insurance? Are insurers, agencies and consumers benefiting from such enhancements in technology?
Arguably, the reply is yes. The insurance buying experience has evolved dramatically within the last decade, and insurers, their agents and consumers have all benefited. However, whenever we examine the actual products and the various touchpoints throughout the customer journey, we are able to see there are significant opportunities for improvement.
Insurance Shopping: Consumer shopping patterns and expectations have changed in most industries, and insurance is the same. The enormous dollars spent by top insurers are pushing more consumers to start their shopping process in a digital format, where speed and accuracy are paramount in keeping customers engaged. Consumers have become accustomed to selecting from multiple product options and also to one-click shopping, but replicating an Amazon experience of the insurance market is extremely challenging.
For one thing, insurance products are highly complex and controlled, and premiums can alter based on a multitude of variables that aren't immediately transparent to consumers. Variables for example: age, coverage limits, credit, driving history, prior claims or age of home can dramatically affect eligibility or policy premium. Even though these 4 elements are key data points for underwriting, verification of these inputs usually leads to lengthy question sets and inaccuracies in pricing at pos and beyond. There are the expense associated with verifying reports such as credit, MVR, CLUE and prior carrier through third party vendors, which add friction and cost in the shopping process.
These are among the challenges that a few digitally focused, independent insurance companies such as Gabi Insurance are planning to overcome. Such digital platforms can simplify the quote process while representing both traditional carriers and newer entrants to the market like Clearcover. Digital agencies stay engaged using the customer through the lifetime of the policy and could help reduce the price of third-party reports, that are currently passed on to consumers.
Beyond the Quote: While the point-of-sale experience is crucial in effective customer acquisition, the whole customer journey — meaning all the touchpoints on the way — help maintain customer loyalty. Digital distribution channels that leverage emerging technologies can track customer interaction and employ the data to identify improvement opportunities up- or downstream. While some insurers make significant improvements within their frontline underwriting and product design, most still rely on products that were designed for traditional distribution channels (physical) and wish some level of post-sale verification of policy attributes. As a result, customer experience can easily shift from digital to paper-intensive, snail mail and the requirements can vary based on the kind of products purchased. Consumers may be required to transmit proof of discounts, photos or proof of insurance that were unverified during the time of the quote.
In such cases, digital agencies like Gabi might be better equipped to quickly engage customers via text, chat or email and expedite requirements on behalf of their insurance partners while adding to higher net promoter scores (NPS) and improved overall retention.
Ultimately, to produce an optimal insurance shopping experience that's more aligned with customer expectations, insurers have to invest in revamping their products and procedures for digital distribution channels. That's easier in theory, as bringing products to market takes multiple years to deploy and millions of dollars in investment. Large, established insurers may require additional purchase of core technologies, rebranding and potentially cultural and ideological transformation, while new insurers such as Clearcover, Hippo and Lemonade are not encumbered by legacy systems.
Adopting the whole digital transformation ecosystem is difficult and costly for insurers and involves multiple departments inside an organization, which frequently have competing objectives and be employed in silos. Insurers may have much to gain from partnering with digital agencies his or her distribution models provide growth opportunities and turnkey use of customers who're not as likely to buy from brick and mortar agencies. Further, insurers can gain valuable understanding of customer demographics and behavior that are unique to internet buyers and employ this information in future product and process improvement strategies.