Digital completion means learning from Insurtechs
Completing entire processes in one place is the next stage in digitizing for insurance providers to meet today's consumer expectations.
Insurance companies have made significant strides over recent years to digitalize and ramped up digital investments during the COVID-19 crisis. Yet, far too many consumers still find that not everything is digital and journeys that are started online still need to be completed through some other channel, whether that’s face-to-face, email, or fax.
Digital completion — being able to complete entire processes or journeys in one online place — is the next stage in digitizing that insurance providers and brokers need to provide the experience that customers expect. Here I’ll discuss why digital completion is key to insurers’ success, bringing ROI in both the short and long term.
Digital transformation investments in siloed solutions are failing to deliver ROI
Most insurance companies already have some digital tools in place for customer-facing processes. Yet, these tools often only cover certain aspects of workflows rather than end-to-end journeys.
For example, robotic process automation (RPA) is growing in popularity thanks to its ability to improve the efficiency of specific tasks, such as using bots to communicate with prospects.
The problem with it is that silos remain, and processes are not always part of an integrated whole. For example, it’s common to see things like agents using bots to reach and vet prospective policyholders. But once those prospects are on an actual sales call, they have to repeat information they already shared with the bot. Agents waste time collecting information that was already provided, manually following up with prospects, and collecting cumbersome physical paperwork.
Most existing systems simply aren’t smart enough to sell in a fully automated and digital way. Due to this lack of cohesion, sales cycles are long and cumbersome. The customer often loses excitement or starts having doubts.
Here are some of the insurance sales KPIs that are negatively impacted by these broken sales journeys:
- Turnaround time: Agents spend an excessive amount of time reading terms and conditions (T&Cs), collecting signatures, and doing compliance paperwork. Customers rarely close on the first call because they don’t have time for such processes.
- Conversion rates: Bouncing prospective customers from channel to channel, prolonging phone conversations, physical paperwork requirements, and agent scripts are all symptoms of a broken digital workflow. This puts the sales process at risk and lowers conversion rates.
- Compliance: Insurance is a highly regulated industry. Without the ability to quickly update process workflows and disclosures to changing regulatory needs, insurance agents put themselves at risk of noncompliance.
- Cost of sales: The operational and processing costs of traditional insurance sales processes can add up, from following up with customers, to reading compliance scripts, to collecting signatures.
Silos also have a negative impact on the claims side of the business, including:
- Turnaround time: Agents spend an excessive amount of time chasing customers for documents and signatures due to disjointed processes. All stakeholders, from customers to brokers to adjusters, spend disproportionate amounts of time following up.
- NPS: Net Promoter Score, a measurement of customer satisfaction, suffers due to lengthy, confusing, and manual processes. According to Accenture’s research, claims that took more than 20 days to be resolved had the highest negative claims experience ratings. This jeopardizes post-claims retention.
- Compliance: Insurance is a highly regulated industry. Without the ability to quickly update process workflows and document requirements to changing regulatory needs, insurers put themselves at risk of noncompliance.
- Cost of claim: The operational and processing costs of traditional insurance processes can really add up, from chasing customers for supporting documents, to fixing NIGO forms, to manual data entry. Claims costs represent almost 80% of a policyholder’s premium. The longer it takes to settle a claim, the higher the claim costs, hurting the insurer’s profitability.
On both the sales and claims side, the average insurer uses a combination of manual methods and siloed digital tools that demand coding from the IT department and customized integrations or simply fail to integrate smoothly with existing systems. Such disjointed processes make it difficult for insurance companies to adjust, reconfigure, and update business rules as policyholder and compliance requirements change.
The Insurtech mindset: Unify experiences to bring customers closer to completion
Meanwhile, “Insurtech” companies are thriving, responding quickly to shifting customer needs and market forces.
Many Insurtechs are customer-obsessed companies that enter the insurance sector, taking advantage of new technologies to provide coverage to a more digitally savvy customer base. In some locations, regulatory barriers have been lowered. In Australia, Singapore, and the U.K., for example, Insurtechs have been encouraged to test their innovative business plans on specific client segments without the need to conform to the full regulatory frameworks that apply to incumbents. Like fintechs, Insurtechs are extending innovation throughout the sector, creating a competitive threat to incumbents but also potentially valuable opportunities for partnering on the changing terrain.
Customer expectations of instant digital transactions sustained seamlessly across digital channels are increasingly the norm. While Insurtechs haven’t come even close to replacing incumbents, they are growing fast and stand to capture a meaningful market share within a few years.
Insurtechs are able to go to market in inherently different ways than incumbents can. One advantage Insurtechs have is the absence of legacy products, processes, and IT systems. They are able to design digital processes, products, and systems from the ground up, relying on the latest technology. More streamlined operations translate into less investment for faster returns.
Crucially, Insurtechs rely on a fully automated approach. This allows them to cut costs and accelerate processes to meet customer expectations. For example, SnapSheet offers end-to-end automated claims management, and the Claim Di mobile app uses “shake and go” technology to help claimants interact with their insurers on the accident site just by shaking their phones.
Meanwhile, Lemonade, a U.S.-based peer-to-peer insurer, has attracted significant funding from top-tier investors, as well as significant traction in their quest to “Uberize” insurance. The company boasts a minutes-long, paperwork-free claims process and delightful online sign-up. It also has a beautiful and modern UI/UX that allows customers to breeze through insurance interactions.
While each Insurtech has a slightly different way of approaching insurance sales and claims, all touchpoints work together automatically to expedite processes. As a result, customers progress rapidly towards the end goal without getting stuck and frustrated — or giving up — along the way.
You don’t need to be an Insurtech to unify customer experiences
The risks Insurtechs present to traditional business models are real, as digital innovation relentlessly redefines the next-generation insurance ecosystem.
While incumbents needn’t turn themselves into full-fledged Insurtechs, they do need to fully embrace unified, customer-facing technology. Point solutions, such as standalone eSignatures and digital applications, are not enough to bring customers to completion efficiently. And mixing in offline processes, such as printing, mandatory face-to-face meetings, and FedEx, also prolong the time to completion.
To keep up with Insurtechs, traditional providers should embrace integrated, automated workflows that bring customer journeys to completion.
Here are a couple of ways insurance providers can foster digitally complete sales and claims journeys like Insurtechs :
- Harness dynamic product presentations (sales): Agents no longer have to rely on in-person or even PowerPoint insurance sales presentations. With today’s available technology, tangents can select and instantly share relevant product images and details to customers’ mobile phones.
- Use instant terms and conditions (sales): Agent scripts slow down sales processes and frustrate agents and customers alike. Moving to digitized T&C forms allows insurers to stay compliant without hampering completion.
- Collect documents in real-time (claims): Insurance claims, in particular, often require heavy documentation. There’s no need for customers to send these documents via fax or email, though. They should be able to simply snap a picture of their document, whether it’s supporting evidence or something else, and send it digitally.
- eSignatures (sales and claims): Signatures are often a necessity in sales and claims processes. But rather than relying on clumsy paper- or PDF-based signatures, customers should be able to provide an eSignature instantly through their mobile device.
The bottom line: Digitally complete journeys bring fast ROI
Unifying digital tools isn’t just a way of alleviating insurance sales and claims staff of menial tasks, although that’s certainly a big advantage. By unifying the end-to-end insurance sales and claims journey, customers’ tasks are brought to completion faster. And this translates into greater customer loyalty, higher sales, and ultimately more profit.
The opinions expressed here are the author’s own.
More from this contributor…