Be first to read the latest tech news, Industry Leader's Insights, and CIO interviews of medium and large enterprises exclusively from CIO Applications
InsurTech Mary Kotch, Executive Vice President & CIO, Validus Reinsurance
A Practical Approach to Innovation Mark L. Berthiaume, EVP, Chief Information Officer & Chief Technology Innovation Officer, The Hanover Insurance Group
Digitalization is the right step forward for insurers to lower costs, increase efficiency, build customer loyalty, enhance their overall experience, and ensure satisfaction. Given that consumers prefer online marketplaces for all intents and purposes, why not leverage the contactless economy to offer insurance and other related services over the internet? Not only will this approach help companies sustain the pandemic, but it would pave the way for new avenues of growth in the days to come.
FREMONT, CA: Insurance is more important now more than ever. Witnessing the dramatic changes induced by COVID-19 alongside the global economic slowdown that followed, customers across the world are now pondering over what could be next? There is a strong sense of anxiety and stress spreading like wildfire regarding how the events of 2020 could change their lives forever and what they need to do to secure themselves financially. As such, customers are deluging insurers with queries associated with claims and premium payments on existing policies, what it covers, and new products that could alleviate the financial pressure brought on by the pandemic.
In fact, the surge of customer calls coming into insurance companies and associated brokerage firms have left representatives breathless and equally astray due to the sudden change in their modus operandi. The shift to remote working has put insurers and brokers under tremendous pressure, given that they have historically interacted with consumers face-to-face or in a branch. As such, managing sales, customer service, and claims remotely have become one of the biggest challenges they face today. But if perceived as an opportunity, what’s deemed a challenge might become one of their biggest growth opportunities. Given that consumers prefer online marketplaces for all intents and purposes, why not leverage the contactless economy to offer insurance and other related services over the internet?
So if you are jumping on the digital bandwagon in 2021, listed below are some of the must do’s to sustain competitive advantage, increase customer satisfaction, and ensure optimal ROI.
Adopting the Usage-Based Insurance (UBI) Model
A recent customer survey revealed that 27 percent of respondents were anxious and stressed about their finances, while nearly 40 percent struggled to make ends meet. In such trying times, it is perhaps safe to say that many policyholders might miss out on making their premium payments for products that are of no immediate use and repurpose it on assets that matter. For example, consumers might put a pause on their auto insurance as they are not traveling anywhere due to the lockdowns. On the other hand, they are looking to increase their investment in life and health insurance policies. This is where usage-based insurance (UBI) products come into the picture. Through telematics and data analysis, insurers can start modifying the premiums payable based on the extent to which it is used rather than paying fixed premiums over time.
Up until 2020, documentation was a manually-intensive, face-to-face process. Everything from filling, obtaining signatures, checking IDs, and collecting supporting documents, insurers or brokers have on pen-and-paper methods and demanded the consumer’s physical presence to process the insurance further. This dramatically changed as the pandemic hit. As meeting consumers was no longer an option, traditional ways of running an insurance business became obsolete and less feasible. Better late than ever, these changes pushed the industry to finally go paperless and move online for almost all purposes— document collection, claims, signature, and purchase. However, for this transition to be successful, companies need to develop a comprehensive strategy and commit to new protocols. To remain relevant and competitive, companies need to deploy a robust website alongside a mobile application that’s robust, intuitive, and user-friendly—enabling consumers to perform any task associated with insurance without any human interaction.
Maintaining Consistent Customer Experience with Omni-Channel Distribution
As insurers move into a digital environment, they must ensure that the same capabilities are integrated with their broker and agent networks. This is especially applicable in commercial lines where consumers prefer to interact with insurers via brokers rather than directly. Under no circumstances can these companies afford to create a barrier between the two parties while digitizing the buying/claiming process. No matter how the consumer would enter the insurance sales-cycle, their experience must be consistent.
Consumers today want personalized offerings and tailored communications that are aligned with their ever-changing needs. To this end, digitalization is perhaps the right step forward for insurers to lower costs, increase efficiency, build customer loyalty, enhance their overall experience, and ensure satisfaction. Not only will this approach help companies sustain the pandemic, but it would pave the way for new avenues of growth in the days to come.