What is the right balance of digitization and human touch?
“There is a time for everything: a time for human guidance and a time for digitization," says this contributor.
Demand for digital-first and remote-first technologies is massive and still growing six months into the pandemic. From Zoom conversations to expanded online banking and telehealth options — it seems that every industry and business is trying to become more digital.
The insurance industry is also moving towards greater digitization thanks to customer expectations and efficiency wins. However, two key features differentiate insurance — particularly the claims process — from other industries: the emotional sensitivity surrounding the claim, and the relative rarity of having to file a claim. These realities may cast doubt on the desirability of a fully self-service insurance process with no human input.
Whether dealing with a fender bender or far worse, people need an insurance process that is easy, smooth and transparent, leaving them open to deal with the more critical issues at the moment.
That’s why, as part of my mission to help companies digitize, I’ve spoken to hundreds of insurance executives and the customers they serve to identify the optimal balance of digital and human insurance processes. The conclusion I’ve come to is that, to paraphrase, “There is a time for everything: a time for human guidance and a time for digitization. A time to automate, and a time for manual involvement.”
But what does that balance between human and digital insurance services look like? Where do we digitize, and where do we bring in the human factor? Let’s take a look.
Which insurance processes are served best by digitization?
Customer expectations for digital services have been rising for years now, and the coronavirus pandemic has only accelerated them. A McKinsey study found that while in January 2020, 90% of insurance agents’ sales conversations took place in-person, by May, less than 5% of agents sold insurance face-to-face.
Even as coronavirus restrictions are being lifted in many parts of the country, digital habits established at the height of the pandemic have left their mark. For both customers and insurance companies, offering fully remote insurance sales and claims processes brought greater efficiency, effectiveness, ease, and speed.
In fact, the 2020 Independent Agent Survey found that 83.4% of agents now feel that it’s moderately to extremely important to deliver insurance products digitally. Another recent survey found that a whopping 90% of insurance customers prefer remote and digital interactions with their providers.
Despite the strong consensus that digital is king, most providers will not be doing away with agents and back-office employees; rather, their roles will and should change given the inexorable march of new technological capabilities.
When deciding what aspects of the insurance process to digitize, a good rule of thumb can be “Digitize that which doesn’t get extra value from human input.”
From my experience speaking with insurance providers, digitizing the routine, mundane aspects of the sales and claims cycle results in the biggest long-term cost savings, improved efficiency, and better CX.
These are some of the key customer-facing activities that may benefit most from digitization:
- Before the policy sale: An easy-to-navigate website with clear and straightforward information about various insurance plans — and the ability for customers to select a package.
- During the policy sale: Customers should be able to securely and easily fill out the application form, submit documents, and get their identity verified using nothing but the digital channel of their choice: smartphone or computer.
- At the point of claim: Customers should be able to submit their FNOL, additional documents, sign, and get regular automated updates on their claim’s status through a single digital channel.
Here’s why:
At the point of sale, customers prefer to take the path of least resistance. By removing cumbersome in-person and paperwork requirements and moving to a digital model that can be completed from anywhere, insurance providers reduce the probability of prospects dropping off due to excess friction. In addition, the added transparency this offers inspires confidence for consumers.
At the point of filing a claim, customers are already stressed due to an incident. Whether it’s a personal injury, vehicle damage, or property damage, the last thing overwhelmed customers want is to deal with difficult processes or to find that in 2020, they still need to find a fax machine.
What stays human?
Interestingly, when insurance providers digitize their sales and claims paperwork, something unexpected happens — the human touch has a chance to shine. Agents who previously spent a disproportionate amount of time traveling to physical locations, chasing customers for paperwork, handling NIGO documents, and filing away forms now have an opportunity to do what only a human being can do: provide guidance, reassurance, and direction.
Buying insurance isn’t an everyday occurrence, and filing a claim is also a rare event. The average homeowner files a claim every nine or 10 years, and the typical car owner files a claim just every 17.9 years. Given this, most claimants are unfamiliar with the process and would benefit greatly from a professional walking them through the digital application or claim submission process in real-time. Insurance providers benefit immediately, too, as NIGO documents are eliminated, and the cost of claims is reduced to a faster, smoother process.
A digital future can be more human than ever
With forms, documents, and signatures more intuitive and streamlined than ever, insurance providers can leave those tasks to the (nearly) pure digital realm and, instead, focus on cultivating more positive and productive relationships with their policyholders and move onto serving the next policyholders more quickly.
Correctly implemented, a digital future can also mean a more human future where insurance providers deliver better service to customers than ever before — in a shorter timeframe and at a lower cost.
Zviki Ben Ishay is the co-founder and CEO of Lightico, a SaaS platform for customer interactions that digitally transforms millions of connections between businesses and their customers. With over 20 years of experience in customer experience, call center technology and service, Ishay has developed a keen understanding of what businesses can and need to do in order to provide better service through digital and remote means to the benefit of both businesses and their customers.
The opinions expressed here are the author’s own.
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