Document delivery considerations for modern insurance businesses
Digital document delivery demands the integration of user experience, compliance and business operations.
Document delivery is one of the most important operations in the insurance industry. An insurance policy is the central focus of everything. Given that, the delivery of this document from carrier to policyholder is vital, delivery must be reliable, safe, timely and compliant.
Over the last 10 years, a new requirement for policyholder document delivery has emerged alongside the legacy requirements of supporting business operations and maintaining regulatory compliance: Customer experience. It’s this area that has led to an evolution in policy document delivery.
The original thinking behind this third requirement was positive. But at the same time, it has impacted the original two requirements of document delivery. Some would say that impact has been negative.
To fully understand the impact, let’s consider where the industry came from before reaching the evolution we’re seeing today.
Mail delivery of physical documents
Historically, print mail document delivery has been the easiest and most effective method of ensuring insureds receive their insurance policies. The industry, and its regulatory bodies, were built on the federal mail system. That influence remains today, due to nearly all regulations for delivering policyholder documentation being based on postal service operations.
Print mail delivery offered business benefits beyond simply delivering a document. Envelopes could be stuffed with personalized welcome letters, brochures or advertisements. This created the opportunity for not only more personalized communications, but also additional revenue streams through upselling and referral income.
But other industries soon saw the potential revenue-increasing power of mail. Before long, “junk mail” caused people to become overwhelmed and frustrated by the amount of paper in their mailboxes.
The “answer?”
ePresentment
When email hit the scene in the late 1990s, insurance was one of the many industries that incorporated it into daily operations.
It at first seemed like a positive step for document delivery, with the potential to save costs on two fronts:
- Reducing paper, envelope, and ink costs; and
- Reducing postage charges.
However, electronic delivery soon ran into two significant obstacles.
The first was compliance. Some had the mindset, “As long as we prove the email was sent to an email they provided us, who really cares if they received it or read it — we’re compliant.”
Federal regulatory bodies did not share that perspective, though. If email was to replace mail delivery as a legal form of document delivery, how could a carrier be sure an email successfully reached an inbox? Or, how could the carrier know that the document was actually read?
The other challenge to electronic delivery was reminiscent of the challenge physical mail delivery faced — junk mail. Much like we saw with physical mailboxes, the amount of unsolicited email soon drowned out the important ones — information overload strikes again!
The Uber effect
Companies like Uber and Netflix have started driving decisions in industries that have nothing at all to do with ride sharing or streaming media. Other organizations studied these models and realized it’s all about convenience, aesthetics, and on-demand information – in short: experience.
Insurance is trying to duplicate this experience with new apps and online access to documents. But is it taking off? And how do we know if it is?
Many would answer those questions by pointing to renewal rates. Some would point to adoption rates of the document access technologies.
However, many insurers anecdotally say that electronic and digital communications are less likely to result in a renewal than mailed delivery of policy documents.
Why?
As Atlantic editor Adrienne LaFrance witnessed, “Today, there are too many real-time communications platforms to track. Along with email, people can chat through tweets, Gchat, Yik Yak, Snapchat, Facebook, Instagram, Viber, Skype, HipChat, FireChat, Cryptocat, and —perhaps most popular of all — text messaging.”
Much like email, perhaps digital access and communication apps simply provide policyholders with more junk to follow. Of course, the counter argument is that you should cater to what policyholders want.
So are insurers supposed to invest in all communication and delivery methods in order to provide great user experience?
A delicate balance
This leads back to my earlier point that user experience may be negatively impacting the compliance and business operations requirements of document delivery.
The continual reinvention of electronic communications has stymied regulatory agreement across the states and departments of insurance. If an insurer only operates in just one state, that’s not an issue. But operation in multiple states can become quite the headache. And if federal regulators haven’t been able to come up with a good, agreed upon system of compliance for email delivery of documents, it definitely doesn’t have answers for apps or other digital communication methods.
This doesn’t necessarily mean an insurer can’t or shouldn’t explore some of these new opportunities. It just means that you may be assuming an increased level of risk. The user experience benefits may be worth it, but your legal department would provide better counsel.
The best example I’ve seen about balancing user experience with business operations was a LinkedIn post focusing on airline ticketing. Someone posted two photos — one showing a current airline ticket, another displaying an evolved ticket design the person created. The evolved design was much simpler to read, replacing the heavy amount of text seen on the ticket with large icons to represent things like airline, gate, route, and seat.
However, user experience experts pointed out that the ticket design was developed solely with the passenger in mind. Reading the ticket was easier, but it eliminated a number of elements from the original ticket. Bar codes and alphanumeric codes were on the ticket to support business operations for the airline, as well as compliance with TSA codes. As several commenters pointed out, a ticket doesn’t contain information for no reason.
The sentiment that formed on that post was that user experience means creating something that can be successfully used by all parties.
Many of the document delivery innovations I’ve seen as of late fail to incorporate the business operation requirements that have existed for years. We can’t prioritize one delivery requirement over another, and the trend seems to be favoring user experience over compliance or business operations.
Where do we go from here?
Pursuing better user experience is a good thing, and so is innovation. But as we’re innovating, we need to make sure we’re also balancing the long existing document delivery requirements of compliance and business operations.
User experience doesn’t mean a thing if we’re overlooking compliance and putting our policyholders or ourselves at risk. And it certainly doesn’t help our business if we’re interfering with existing processes without a plan for changing those processes accordingly.
Barry Crawford (bcrawford@massprinting.com) is CTO of MassPrinting, an InsurTech company focused on insurance document output. These opinions are his own.
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