How insurers can meet the needs of mindful new consumers
It’s been a turbulent year for the insurance market, with losses estimated at . From paying out on wedding and special event insurance to getting stranded citizens home before travel bans were implemented, COVID-19 has caused financial damage to carriers. However, some good news is that while recovering from this disruption, insurers are also set to see even the most complacent consumers begin taking out insurance policies for holidays or large purchases. It’s estimated that some new UK consumers will be driven to the market, many for the first time.
While the opportunity of new customers looking to engage with insurers may seem like a blessing to the industry, there will be new challenges to face in winning them over. The new consumers entering the market may not be so insurance-savvy, and so will be looking for a slightly different experience. Insurers must begin looking at how they can provide the information these customers will need, and how to do so in an engaging way. This will be crucial if they are to fend off competitors, stand out on comparison sites and survive in what is undoubtedly a difficult time for the entire industry.
Speaking their language
The insurance battleground will intensify in the coming months; being able to communicate quickly and without industry jargon, with new customers as they look for policies will be critical for insurers to capture market share. Insurers that make the policy purchase and onboarding experience easy and simple will have an advantage. This involves preparing for consumers less well-versed in what policy they need, or how the process of taking out insurance works. Knowledge shouldn’t be assumed and insurers that identify confusing policies or processes, and take steps to make them more accessible, will stand out among the crowd for new consumers.
For example, terms and conditions, policy and claims information could be re-assessed, with insurers offering them in a simpler, clearer and more concise way, through the right channel. Speed will also be of the essence, as these consumers will likely ask several insurers for a quote. Reputation matters less for consumers unfamiliar with the industry, so if policy information isn’t delivered quickly and in the right way, some may prefer the insurers that responds quickest with a clear quote.
Beware the millennial mindset
Value for money is often a key component of any decision, and buying insurance is no exception. At present, and new quotes are quite similar. New consumers are entering the market looking for a good deal, while existing customers re-assess if they’re getting the best coverage for their car, house or family. This can cause a race to the bottom on price-point. To differentiate, insurers must therefore look at how they can provide a best-in-class experience; this can be achieved by harnessing the right technology. While insurance has often been seen as a traditional industry, a ‘’ is starting to gain ground, with consumers increasingly confident in using digital challenger brands, rather than playing it safe with traditional market leaders.
If insurers do not give customers the slick digital experience they want, they will lose market share to newer insurance providers, and tech giants. At the same time, they should try to avoid getting caught up in the latest digital gimmicks. Carriers need to assess which technologies will enable them to improve how they deliver useful information and guide customers through application and claims processes. To make the often-stressful claims experience seamless for customers, video could be used as a form of evidence and submitted online. Technology can also be used elsewhere, for example, benchmarking customer data so that certain insurance products are offered to customers at specific stages in their lives. Ultimately, providers need to find ways to understand and deliver what the customer wants from them, extending and maximising the value of the technology they use to do so.
Carving out market share
First-timers entering the market presents an opportunity for insurers, but they will need to alter their approach to attract these customers. Less background knowledge on the industry and its key players means reputation won’t be so important; customer experience will instead become the real market differentiator. Speaking customers’ language and delivering the simple, quick, jargon-free experience they want is crucial. By assessing and implementing technologies to facilitate this, insurance providers will stand out in the crowded marketplace and win market share of the new customers looking for a policy. If providers don’t deliver the slick customer experience today’s consumers want, they will simply head elsewhere.
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.