Digitalising insurance: Laying the foundations for success
There is no doubt that those working in insurance have faced significant challenges in recent months. Like many other industries, one of the immediate hurdles to overcome has been a mass shift to a new remote working model. For those in insurance, a historical reliance on face-to-face communications and physical paperwork has made this transition far from easy.
To make matters even more challenging, many insurers have also witnessed a dramatic increase in the volume of customer enquiries. Whether relating to business interruption and closures, or personal health and life cover, requests for new policies and claims are continuing to roll in.
Across the sector, the pandemic has shone a light on multiple practices and systems that are no longer fit for purpose. It has forced businesses to re-evaluate and evolve in order to survive the current climate and prepare for an uncertain future. For many, part of this evolution has involved adopting new technologies and digitalising services.
The rise of insurtech
Although the insurtech market has been steadily growing for several years, the challenges posed by the pandemic have driven a significant rise in both investment and adoption. As such, COVID-19 has been an unexpected catalyst for innovation across the insurance sector. It’s been that insurtech saw record-breaking investor appetite in the third quarter of 2020, with US$2.5bn raised across 104 deals globally.
There are many different examples of how modern technologies are currently helping insurers to plug the gaps and continue to deliver their services, whilst complying with the latest government guidance. For example, with clients unable to come into the office for face-to-face meetings, authentication processes have had a revamp. Insurers are now implementing identification applications to safely and conveniently ensure that individuals are who they say they are. Meanwhile, and in another effort to limit direct contact with clients, drones are being used in cases of property damage, in order to collect the digital imagery needed to make a claim.
Other insurers are using modern technologies – such as artificial intelligence and predictive analytics – in order to effectively assess risk and set rates. For instance, during national and regional lockdowns non-urgent medical examinations, understandably, could not take place face-to-face. Pre-pandemic, this was often a requirement for life insurance policies. As a result, many firms have turned to previous medical data, using a mixture of artificial intelligence and predictive analytics to gather the information needed.
Starting from the ground up
As insurers continue to realise the benefits of these modern technologies, their use across the industry is only likely to increase. After all, they could unlock a world of possibility for businesses and their employees, both in terms of convenience and competitive advantage. The data-driven insights that they produce could help to increase productivity, improve the customer experience, and increase profitability. However, the long-term success of any modern technology relies on having the right infrastructure in place to support it. In order to reap the future rewards, insurers will need to lay the foundations today.
Traditionally, data integration – or the process by which users can make sense of data – has been a lengthy, time consuming process. Consolidating all data across an organisation in order to provide a single, unified view is challenging and, when new technologies are added to the mix, IT teams can struggle to keep up.
This is where a logical data fabric, which is built on data virtualisation, can help. It creates an architecture that is both agile and able to accommodate modern technologies, while making the technology change impact non-existent. By producing a single logical view of all data stored across an organisation – regardless of its location or format – this technology can give businesses an edge, enabling them to access all information quickly and easily. This is imperative for insurers as every single piece of information needs to be accounted for when assessing risk. Whether its medical records, clickstreams or even sensory data from buildings and cars, insurers need to be able to see the ‘full picture’ at all times.
While recent months have presented many challenges for insurers, they have also created many opportunities. Modern technologies and a newly-established openness to embrace them are likely to have a lasting impact on the entire industry, with businesses continuing to reap the benefits for years to come. However, when it comes to digitalisation, in order to set themselves up for future success, insurers should prioritise creating an architecture with agility – and data virtualisation – baked in. It is only then that they can be ready for whatever comes next.
This article was contributed by Charles Southwood, Regional VP (Northern Europe and MEA), Denodo
4 ways to digitally enhance an insurtech customer experience
Insurtechs run the risk of cannibalising their own mission to boost coverage by getting sidetracked focusing on the latest and greatest technology.
These folks may advertise an end-to-end digital experience, but behind their slick customer-facing portals, they struggle to overcome the same problems that established insurers still face: a broken customer experience.
If an insurtech platform delivers a digitised version of a broken process, shoppers may be deterred by the same pain points that they were hoping to avoid by going with the more modern insurer. This might mean that shoppers are required to fill out a series of confusing forms that don’t apply to their industry or even be required to pick up the phone and wait in a queue to secure the quote they got online. Spoiler: neither experience leads to conversions.
As the Chief Marketing Officer and company co-founder, I’m a fervent advocate for putting small business owners and their customer experience (CX) at the center of insurtech product design. At B2Z, we provide digital, self-driven business insurance to small business owners by amassing digital intelligence through vast amounts of data, then leveraging it to streamline their insurance experience. That’s because our audience doesn’t have time to pick up the phone and wait to talk to an agent or chase emails over days or weeks waiting for a coverage decision.
1. Excel where others fall short
To understand where you can improve your CX, start by auditing the current insurance experience for potential customers in your target market. By identifying the common touchpoints and locations along the customer journey where the competition falls short, you can also find opportunities to pull ahead.
At B2Z, we found that most policy offerings were cumbersome and incomplete, but there were two major pain points we saw time and again:
- Irrelevant questions led shoppers to question whether they were applying for the right product. Small business owners could receive a quote after answering questions in an online form, but the process wasn’t tailored to their business. For example, pet retailers would be asked about liquor sales at their establishment.
- Shoppers couldn’t complete the process entirely online. Even after they were promised a completely digital experience, too many small business owners were required to follow up over the phone to secure coverage.
Why are these such serious issues? Small business owners are busy people. More than 70% of them work more than 40 hours per week as they fill a variety of different roles across their organizations.
This disjointed process left busy entrepreneurs with coverage gaps or uninsured altogether: over 70% of small businesses are underinsured, and 40 percent aren’t insured at all. And having the right kind of insurance can be the difference between a business shutting its doors or enduring. This landscape created an opportunity for thoughtful technology to improve the customer experience.
2. Use technology to solve pain points
In the property and casualty space, insurtechs can shrink expense ratios to almost 40% lower than those of traditional insurers. But they don’t do this by implementing technology for technology’s sake. Instead, they identify and target specific areas where tech can improve the customer experience and they strategically design the right solution for their customers’ needs.
Our work with chatbot design is a great example of how insurtechs can leverage innovative tech to differentiate their products and services.
Most insurtech chatbots are equipped to answer simple, formulaic questions you’d find in the FAQ section of their website. While this type of bot helps shoppers and customers access the right information at the right time, their limited natural language processing capabilities too often means customers must input the exact keywords to get a helpful response.
After examining where other chatbots fell short, B2Z developed Diya, a digital guide to small business insurance. During the application process, Diya chimes in at potentially challenging moments to ensure small business owners quickly secure the right coverage.
For example, when asked to select their business classification code, customers can type, “I cut hair” and select from relevant codes for barbershops or beauty salons.
By being purposeful about implementing new technologies, insurtechs can streamline the customer experience and differentiate themselves from others in the space.
3. Align your CX with customer expectations
The pressure is on for insurtechs to match the digital experience customers now expect when they shop for groceries or refill their prescriptions.
The COVID-19 pandemic changed behaviors and accelerated customer expectations for entirely digital experiences (which have existed since at least 2015). In the US, 73% of customers have tried new shopping behaviours since June 2020 and over 75% intend to continue them.
To achieve this, insurtechs must leverage data to streamline the customer experience. At B2Z, we leverage our digital intelligence to help small businesses quickly identify the right coverage options based on the risks within their industry.
For example, to gauge the right level of coverage for a contractor, we need to know whether their employees regularly work on platforms more than 15 feet off the ground. Rather than asking the business owner to provide this information, we leverage third-party data, and our algorithms review county records of similar businesses.
Then, by collating this information with millions of other contractors across the country, we can automatically match their business up to an existing model from an underwriting perspective. This leaves the customer with fewer questions to answer manually, streamlining the customer experience and shortening the application process to as little as five minutes.
By drawing from all available data sources, insurers can deliver a speedy, fully digital customer experience while holistically evaluating customer risks.
4. Every digital touchpoint is an opportunity to enhance the customer experience
As insurers rush to adopt new technology, incumbents and insurtechs don’t consider how their decisions will impact the customer experience.
By taking stock of the competition, implementing new tools that are designed for a specific purpose, and using data to gauge customer expectations (and design to meet them), you can keep your customers at the centre of an increasingly digital experience.
About the author: Stephanie N. Blahut is CMO and Co-Founder at B2Z Insurance. B2Z Insurance is a new small business insurance company that provides coverage for on-the-go business owners: simple explanations, easy application, digital quotes, and mobile claims. Stephanie is a seasoned digital marketing professional whose experience spans the insurance, publishing, and software industries. As B2Z’s CMO she leads their digital-first customer acquisition and marketing strategy.