The Digital Imperative in Insurance Calls for Customer Centricity

It’s an open secret that there is unmet customer demand in insurance. Only 27% of customers feel the financial services industry is fully customer-centric. Investors and innovators know there are opportunities to do things better. More than $19 billion was invested in insurtech (insurance technology) startups — new, digital-first insurance companies — between 2016 and 2020, and these investments are transforming the industry as well as customer expectations.

Established insurers must now embrace digital channels to meet and exceed customer expectations or risk continuing to lose ground to insurtechs. To address the new digital imperative in insurance, insurers must put customers at the center of everything and deliver the connected experiences they expect.

The four pillars of the digital imperative in insurance are to provide customers with 1) omnichannel access to 2) personalized experiences with 3) tailored coverages and 4) instant fulfillment. Let’s explore how these four pillars can drive the transition to customer centricity.

1. Omnichannel access

One thing most insurance customers expect is the ability to access policies or create claims anytime from any device. They want to do things like file a policy or pay a bill from anywhere — whether it’s through a phone call or text chat with an agent, the mobile or desktop insurance website, an AI-based digital assistant like Alexa or Siri, or any other platform. Increasingly, even brokerages are demanding digital access to carriers for quoting and servicing, ushering in a new era of portals, mobile apps, exchanges, and APIs.

Omnichannel delivery requires access to data and functions from multiple systems.  Unfortunately, insurers often struggle with the lack of APIs in the legacy systems — even those implemented in the last decade. Catching up often requires multiple technical workstreams, enabling APIs or replacing outdated platforms, and simultaneously building engaging web properties and mobile apps. Insurers task themselves with learning new agile techniques and modernizing the skills of their IT and business teams to rise to the challenge.

However, the digital transformation required to provide omnichannel access isn’t always easy. At many insurance companies, an abrupt switch to a new digital system, full of new skill sets to staff for, could be seen as a risky move. Fortunately, there’s still time to move quickly and adopt new solutions. Most of the digital imperative in the insurance industry is still on the ground floor of transformation — which means right now, there’s a lot of opportunity to take the lead and start building the omnichannel experiences customers expect.

2. Personalized experiences

In a truly personalized customer experience, every brand channel — including the website, the mobile app, and more — delivers relevant, unique information based on past engagement. Customers now expect insurance companies to use their policy data and claim history to provide personalized advice based on their unique circumstances.

The call for personalized insurance experiences means insurance companies now need to evolve. Emailing back and forth, and having customers fill out handwritten applications is no longer a best practice. While forms are still part of the insurance process, customers are now used to filling out fewer of them, and with far fewer fields. Thanks to automated technology, many forms are now pre-filled with essential information customers have previously shared with the insurer and with third-party partner sites.

To remain trusted producers, insurers need to deliver automation-driven personalized experiences on every channel while keeping the human elements — the relationships, the advice — intact. While many insurance providers are experimenting with direct, digital distribution models, due to the variety of insurance buyers, the value of traditional channels can’t be ignored. Agent expertise is still a key reason why many customers stay with their preferred insurance companies and the value agents bring can be augmented through digital technology.

3. Tailored coverages

Insurance hasn’t always been known for offering simple, easy-to-understand products. But in recent years, insurers simplified many complex insurance products to create greater access to coverage, including on-demand and tailored coverage. Insurtechs have been a major source of this innovation, and customers’ positive experiences have led them to expect the same simplified experiences and tailored coverage from established insurers.

The post-pandemic life and career landscape and the gig economy have accelerated demand for coverages tailored to fit individuals’ needs. A 68% majority of customers say the pandemic has elevated their expectations for insurers’ digital capabilities. 

As customers now expect personalized offerings at an accelerated speed, insurers can no longer take months to roll out a new product or modify coverages. It now needs to happen in weeks. The digital imperative in insurance means that insurers need systems to enable the agile launch of new products, and the ability to quickly manage and adjust coverages in response to competition.

4. Instant fulfillment

With instant fulfillment, users can see an immediate resolution to their queries, whether filing a claim, buying a policy, creating an endorsement, or something else. Automation is what makes instant fulfillment possible. To provide instant experiences, insurers need to ensure they have sufficient automation on the back end to process policies and claims and deliver documents digitally.

By automating key operational processes, insurers can create a more streamlined environment for customers. Instant fulfillment is just one of the reasons why 85% of growth-oriented insurers say automation is key to becoming a top performer in the industry.

Another reason is underwriting, a famously slow and manual process for many insurers and brokers. New automated underwriting solutions give insurers a more streamlined way to grow business in collaboration with independent business producers. Automation makes processes faster and easier across submissions, quote-to-bind, underwriting, policy issuance, and payments.

Some new automated underwriting functions include:

• Integrated distribution management to help insurance sales channel managers efficiently onboard, grow, and nurture their external agent network.
• Agile insurance quoting to efficiently capture customer information, complete applications for needs analysis if required, and quickly generate quotes on any channel.
• Streamlined underwriter workflow gives underwriters a complete view of submissions and accounts where they can adjust pricing, manage documents, and confirm their underwriting decision.

Automation isn’t just for single processes; rather, it’s most effective when it’s implemented across the entire customer lifecycle. This single system of engagement should extend from quoting to claims management and beyond.

Achieving the digital imperative in insurance

With unforeseen levels of investment and innovation in the insurance industry, digital transformation is truly an imperative for established insurance companies that hope to remain industry leaders. The baseline expectations of today’s insurance customers include omnichannel access, personalized experiences, tailored coverages, and instant fulfillment — culminating in customer-centric insurance that surrounds them with the tools, services, and experiences they need to succeed.

Now is the time to embrace digital transformation in insurance and rise to the top in these competitive times.