What does customer-centricity mean for digitised insurance?
While the utilisation of technology among individual companies is currently a significant differentiator in the insurance world, this isn’t to say that it’ll forever be the case. As the tech factor becomes more even across the board, insurers may find that customer-centricity is one of the easiest and most valuable ways to distinguish themselves.
The quantifiable metrics for great service include the speed of resolution, the quality of solution, transparency and simplicity of processes, and cost. Furthermore, despite technology alone being unlikely to drive value, in combination with customer-centricity it could be leveraged to enrich the service experience through digitised distribution and communication, enhanced customer interactions (such as via social media), and automated service enhancements utilising automation (AI, RPA, chatbots, etc).
All of these factors suggest that insurtech is geared to address the enduring pain point of the industry. Therefore, a significant question is posed: are policyholders receiving a truly 21st-century insurance experience? To help us find the answer, we spoke to three sector leaders: Colleen Wells, Vice President of Strategy at Sapiens; Lucas Ward, Co-Founder, President and CTO of Kin Insurance; and Denise Garth, Senior Vice President of Strategic Marketing at Majesco.
Is customer-service the great differentiator?
BCG outlines three core aspects of customer service in its article ‘’, namely speed, quality and transparency. “Meeting these basic expectations serves as the foundation for strong customer satisfaction, but it also enhances operations,” the company said. Insurtech’s digitally-enhanced delivery could generally be summarised as improving these core metrics in ways previously unavailable or unexplored. Mobile apps and automated processes mean that insurance can be bought in seconds and claims can be processed in minutes. Keen to throw off perceptions that insurance is dull, complicated or unnecessary, through better customer service that this is no longer the case.
The question of whether customer-centricity and technology have equal or disparate value can be polarising. Wells is emphatic that focusing on customers is unequivocally more important, “If you don’t nail customer-centricity and provide the expectations your customers expect, you risk losing them. A recent revealed that nearly 75% of consumers stated they would happily pay more for a product or service if their experience was exceptional. On the flip side of that coin, 26% stated that they would shop around for better deals or more personalized services.” The lesson here is that profits and good customer service are intrinsically linked. This is an elementary but nonetheless valid evaluation, but does that necessarily mean that insurance should prioritise its development over technology?
Ward contends that this is not the case, “I’d argue that the two are inseparable. Technology exists to make our lives easier, so, by extension, customers have to be the centre of technology. It has to measurably benefit them and anticipate their needs.” Garth adds more nuance by stating that a generation change is fundamentally at the heart of the matter. “In insurance, as with many other industries, these changes are rapidly being embraced, with digital-native generations leading the way, including Millennials and Generation Z. The viability of the insurance industry is vitally connected to the customer; if we lose touch with our customers, both current and future, we lose business.”
How can insurers build enduring customer relationships?
Successfully using customer service as a key differentiator often hinges on selecting and developing a personalisable aspect of the experience. For Kin Insurance, Ward states that the company demonstrates a willingness to ‘go above and beyond the call of duty’ using its technology to do what other, less digitally-advanced insurers cannot. “While other insurance companies don’t operate in Florida because of its hurricanes, we do because that’s where the need is highest. Our technology simplifies every part of insurance, from quote to claims, so our customers can save money on essential coverage and have the help they need to recover quickly from a loss.” The company also involves customers by sharing the underwriting profits with them directly, creating a dynamic, deep and incentivised relationship.
Deepening customer relationships is a core business concept, and this is equally true for policyholders and the tech companies that support insurers themselves. “At Sapiens, we think of our insurers as being more akin to partners with whom we’re in this digital transformation and changing market together,” says Wells. “Our products enable insurers to provide their customers with a modern, digital platform that offers flexibility, agility and customisation, exactly what insurers require in order to factor in market changes and the demands of today’s consumers.” The long-term sustainability of customer relationships must also be considered. Far from being a simple consideration, it can ultimately have a profound impact on a company’s structure, operational philosophy and future development. Garth explains, “Majesco’s customer relationships are built on a long-standing expertise in core insurance market solutions across Property & Casualty (P&C) and Life/Annuities, which has only expanded with our digital, data and analytics, and distribution management solutions. Our sales, client partner, product and delivery teams work with customers to not just meet today’s needs, but also to prepare for tomorrow’s. Majesco also provides a range of valuable content and points of view through our thought leadership, blogs and webinars to help them shape their journey to the future of insurance.”
Configuring products to meet modern insurance needs
The traditional insurance market and its typical business model is rapidly becoming obsolete. Assembly line products with ‘one-size-fits-all’ characteristics are no longer appealing to customers when innovative insurtechs like and can customise and cost services for individual needs. Product flexibility has taken on even greater importance in the post-COVID-19 world, where a multitude of different customer circumstances are altering the nature of risk management. Counteracting this effect and configuring products to meet modern needs should be given high priority. “We put technology at the centre of our product development so we can move fast and respond to changing needs,” states Ward. “For example, in 2019, a Florida mobile home insurer went insolvent and left 30,000 mobile homeowners on the verge of losing their coverage. My team subsequently built the infrastructure that makes it possible to add and launch a new product in weeks. That’s the big difference between us and other insurers: we have the full tech stack that lets us respond to real-time market needs.”
As a tech provider, Garth says, Majesco’s purpose is to connect each party in the insurance process as conveniently as possible, the importance of which can often be overlooked. “The point is not merely the means of production,” she continues, “but the means of connection and the result is not just an increase in customer expectations but rather an expansion of market boundaries.” As such, insurers on the whole (not just insurtechs) may soon come to regard themselves as “technology companies providing insurance” instead of vice versa. The technologies that facilitate this transformation are significant. AI (artificial intelligence) and ML (machine learning) algorithms leveraging large streams of collected data enable insurers to know their customers in comprehensively more detail than previously possible. “Insurers are the kings of data and being able to use and aggregate it facilitates smarter, better-informed decisions,” adds Wells. “The cloud and managed services are also now crucial to customer-centricity. COVID-19 has forced insurance to rapidly go digital, and the traditionally slow-moving industry saw many providers unprepared.” Any of insurance’s more atavistic tendencies are compounded by customer experiences that have been biased by ecommerce platforms such as Amazon, Alibaba and Shopify. The future of insurance, then, clearly lies in developing an intuitive digital service that meets similar expectations.
Promoting better customer outcomes
The complementary nature of customer-centricity and digital technology within insurance appears to be well-founded, but how can businesses use this knowledge to achieve better outcomes for their customers? Wells emphasises that digital transformation is as much about ‘culture’ than the underlying technology that facilitates it. “That’s proven to be hard for many, but, here at Sapiens, we see and understand the value it brings across our products, to our insurers and their customers.” To keep this cultural aspect in check, Sapiens has built a team of 350 staff dedicated to investigating the latest trends in order to provide insurers with optimal advice.
Garth states that Majesco is focusing on customer research in order to gain an understanding of their needs, “Listening customers has never been more essential to sustainable growth than it is today. They care about where they are served, when they are served, how they are served, who is serving them, and what changes are happening with products and services.” Garth urges for bold and visionary leadership that capitalises on insurance’s opportunity to redefine the insurer-policyholder relationship. Ward views Kin Insurance as being emblematic of this ‘renaissance’ for the industry, a revitalisation led by startups but, he believes, soon to be joined by more incumbents. “Kin has built a blueprint that proves technology is the driving force in creating a more customer-centric insurance company.” Finally, he concludes with a call to arms which places the old/new divide in sharp contract: “Customer satisfaction with home insurance companies is shamefully low; the insurance industry’s NPS (net promoter score) average is 35 (on a scale of -100 to 100), yet Kin has an NPS of 84. That indicates how we’re making a real difference.”
Wells has been in the insurance space for over 15 years. Primarily responsible for global digital product strategy for Sapiens’ North America P&C space, she is passionate about the future of the insurance industry and enjoys contributing towards the evolution of the company.
Priding himself as being a ‘builder’, Ward has been involved in the founding of two companies, of which Kin Insurance is the latest. Holding a BSc in Computer Science from Southeast Missouri State University (2000 to 2004), his knowledge of the tech sector has been developed by roles at Accenture and ThoughtWorks.
Garth is responsible for leading strategy, marketing, industry relations and innovation in support of Majesco’s client-centric strategy. Possessing extensive experience within insurance, she is also a recognised insurtech influencer and industry leader adept at strategic thinking and international speaking, and has authored many articles on thought leadership, key issues and opportunities facing the industry today.
Startup spotlight: SIMON adds Nationwide to its platform
Headquartered in New York, SIMON has a singular goal: transforming the digital experience for financial advisors and unlocking greater levels of service for their clients. It achieves this through:
- A comprehensive platform featuring a full suite of digital tools
- On-demand education
- An “intuitive” marketplace
- Real-time analytics
- Lifecycle management
The company’s fusion of cutting-edge tech with leading expertise is resulting in a new industry standard, one that is simplified, codified, and consolidated within a single ecosystem.
Creating value for financial advisors
At the time of writing, SIMON works with over 85,000 finance professionals who collectively manage more than US$3tn in assets.
The startup’s solutions include:
- Spectrum: A multi-dimensional framework that quantifies the risk profile of investments using five metrics - protection, upside, liquidity, simplicity, and history
- An investment platform: Featuring risk management tools, over 90 educational videos, inclusive product training, a compliance tracker, and more.
- Analysis tools
Furthermore, SIMON’s quality as an organisation is attested by both its awards (such as being listed among the NYC Annual Awards’ ‘Best Places to Work’ category) and the status of its investors. So far, these include Barclays, JPMorgan, Prudential, Goldman Sachs, HSBC, and others.
Another high-profile name has now been added to SIMON’s list of associations: Nationwide. The Fortune 100 US insurance firm has been added as a carrier to SIMON’s marketplace. Nationwide, which is almost a century old, is an ideal fit for an insurtech focused on delivering broad solutions and expertise in a rapidly evolving sector.
Protecting peoples’ financial futures
Regarding this latest partnership, Scott Beshany, Chief Distribution Officer at SIMON, said, “Nationwide has an incredible history of innovation and advocacy and we couldn’t be more thrilled to collaborate with their team and make their products available in our Marketplace.
“Both firms are strongly aligned in the value we seek to create for financial professionals. SIMON’s dedication to delivering intuitive technology that builds simplicity and transparency around annuity offerings supports Nationwide in its mission of helping people prepare for and protect their financial future.”
Craig Hawley, Head of Annuity Distribution at Nationwide, expressed similarly positive sentiments about the collaboration:
“Nationwide has a decades-long track record of incorporating smart technology into the financial professional’s day-to-day workflow. This is another big step forward in that effort, with a proven, innovative partner at our side.
“With SIMON’s platform, financial professionals can seamlessly integrate a range of annuities into their holistic planning process, creating greater efficiencies for their practice and a more comprehensive wealth management experience for their clients.”
Images sourced from respective companies