Insurance Providers Using Digital to Drive Better Customer Experiences

Simon  Mathews

May 07, 2014

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According to the research service BI Intelligence, 22% of the world's population will own smartphones by the end of 2014. Twenty percent will own a PC. And 6% - that's one out of every 17 people on the planet - will own a tablet. With more and more of our daily lives spent in front of one or multiple screens, companies across every industry are seeking ways to become (and stay) relevant in the digital space. The insurance industry is no exception to the rule. Take a look at these examples:

 An insurance startup has simplified an overly complex industry.

Josh Kushner, founder of venture capital firm Thrive Capital shared his frustration with the health insurance space during a recent interview on CNBC's Squawk Box. "I opened my insurance bill one day, and I realized that I had absolutely no idea what it meant. I'm educated, I run a growing business, and I didn't know what my benefits were with doctors or hospitals I had in my network, or how to file a claim." Being the young entrepreneur that he is, Josh decided to create a new type of health insurance company - from scratch. His goal was to "make it simple, transparent, understandable, and relatable, primarily through technology, data, and design."

The result is Oscar, a NYC-based startup with more than 40,000 physicians in its network. The Oscar website includes a robust provider search that includes physician fees and patient reviews; an online quoting tool that enables prospective customers to fill in their marital status, number of kids, income, and zip code in a Mad Libs format; a Facebook-like timeline of the subscriber's medical history; and, of course, clear billing information that's aggregated per visit.

Social media mavens have increased customer engagement.

Ernst & Young's recent report Insurance in a Digital World: The Time Is Now discusses research that uncovered a "positive correlation in customer satisfaction between quality and frequency of contact, increased cross-selling and less switching to providers, yet we found nearly two-thirds of customers claim they receive no, or just one, annual contact from their insurer." Certainly insurers could do well to reach out to policyholders more often.

Social media has made reaching out a two-way street. Esurance's home page encourages customers to "Call us 24/7 or ping us on Facebook, where we have the fastest response time among leading competitors."

Many insurance companies have taken up residence on Twitter in order to push soft marketing messages and provide customer support. And even Pinterest has gained recent popularity with insurers - American Family Insurance's "The house of your dreams" board is filled with pictures of inspirational kitchens and bathrooms, while Allstate's "For Your Move" board provides checklists and other guides to ease the home moving process.

Customer-focused firms have leveraged mobile to cut costs.

Esurance has proven itself to be a mobile leader by leveraging built-in smartphone features to benefit both the customer experience and business metrics. For example, customers can add a new car to their policy by scanning the Vehicle Identification Number - reducing the probability of errors that can arise from human  error. After an accident, customers can initiate the claims process via the same mobile app and submit pictures of the damage taken with the phone's camera - the pictorial evidence reducing the amount of time that it takes to process a claim.

And just last month, the company launched is latest mobile innovation: video appraisal. Eligible customers can now use their phone's video function to chat in real-time with an appraiser. This enables customers to get an immediate claim estimate and also eliminates the time and cost associated with having an appraiser travel to the vehicle location.

Data-driven firms have learned to make decisions based on cold, hard facts.  

The Insurance in a Digital World study showed that an alarming 89% of insurance providers fail to leverage data about customers' past interactions when making online product or service recommendations. Yet while many firms struggle with the basics of Web analytics and targeted marketing, Progressive has taken data science to the next level by tracking drivers on the road.

Progressive gives policyholders and prospective customers who enroll in its Snapshot® program a small device that sits below the vehicle's steering wheel. Over the course of 30 days of driving, Progressive records the driver's habits - like number of miles driven, hard breaks, and late night driving - and makes this information available to the driver online, along with tips for safer driving. At the end of 30 days, the company calculates a personalized rate based on the driver's average road habits.

These insurance leaders have raised the bar for the entire industry.

Ernst & Young recently surveyed 5,000 insurance customers in Brazil, Canada, Mexico, and the US. According to the resulting Voice of the Customer report, "Customers expect great service as a matter of course, and the fact that they have received it will not stop them from shopping around." Providing a great digital customer experience has also become table stakes. Digital is no longer an option. It's an imperative.

But many insurers still struggle to deliver in digital channels. A recent McKinsey survey of U.S. and European P&C and life insurers found that 39% didn't have a digital strategy that addressed the entire customer lifecycle. Not surprisingly, a large number of the respondents (83%) had digital marketing initiatives, but digital efforts lagged when it came to supporting post-purchase activities like submitting a claim.

What's the underlying reason? Ernst & Young found that legacy technology constraints topped the list of insurers' inhibitors to digital growth, but constraints related to internal company structure and culture are also key challenges.

To drive the change towards becoming a digitally focused company, insurance executives need to bring a deeper understanding of customers' digital behaviors, needs, and expectations to employees across the organization. Customer journey maps are great tools for documenting this information. Insurers should map the digital and non-digital interactions that customers have as they do business with their firm over time, overlaying information about customers' typical digital habits. Look for pain points and opportunities to migrate non-digital interactions to mobile, tablet, or desktop channels.

Extractable works with a number of insurers across personal, life and commercial lines - building experiences that are improving delivery and service to consumers; enabling brokers and agents to better provide for their customers: and doing so across mobile tablet and desktop devices.