Put policyholders at the heart of digital transformation

Spending on technology in the U.K. and U.S. will grow 25% over 2022 levels by 2026, according to a recent eMarketer report. This shows that digital transformation is top of mind for leaders at property & casualty and life insurance companies.

Insurer spending on digital transformation will remain constant even in the face of economic uncertainty. But is the policyholder truly at the heart of each step in the digital transformation journey?

To answer this, think about where P&C insurers typically invest. Workflow automation related to the claims process is a major priority at many companies, as it should be. But between 2016 and 2020, homeowners filed claims for fewer than 6% of insured homes. In one year during that same period, slightly more than 6% of policyholders with auto insurance collision coverage filed a claim, and only 3% of policyholders with comprehensive coverage had a claim.

Automated communication helps manage customer expectations around claims, but given that the majority of P&C customers don’t submit claims in a given year, it’s time to look at other points where digital communication can help insurers deliver the desired brand experience for their policyholders.

Here are eight ideas that can help insurance organizations put customers at the center of their digital transformation journey.

1. Establish a baseline: First things first. Before you can improve the customer journey, you have to understand what policyholders are experiencing today. If you’re automatically emailing occasional surveys or collecting Net Promotor Score (NPS) ratings after call center interactions, you don’t have the big picture. Establish a baseline by requesting feedback across multiple channels (email, text, phone, chat, etc.) at all stages of the policyholder journey instead of waiting for claims resolution to ask how the experience was.
2. Make a great first impression: Customers typically contact an insurer for the first time because they’re shopping for a new policy and requesting a quote. This is your chance to make a great first impression by communicating effectively using automation and making it easy for potential customers to get the information they need. Don’t forget to work with your brokers, agencies and other members of your distribution network who are involved in this initial point of contact so you can coordinate and optimize messaging.
3. Get more details for quote accuracy: Insurers can give potential customers a ballpark quote almost instantly with just a few details. But if you can make it easy for customers to upload more information for increased accuracy right out of the gate, that’s a better approach. Customers are wallet-conscious, especially now, but responding to their request with thoughtful and personalized automated communication results in not only a more accurate description of the coverage they’re purchasing, it also builds trust right out the gate.
4. Get opt-in for communication and ask for customer preferences: When customers request a quote, automated responses should include an opt-in for communication across channels and a request for customer communication preferences. Asking for consent to contact customers when and how they want is part of the process of building trust, as is ensuring that customers aren’t bombarded with messages. There’s a fine line between being proactive in following up and being annoying, but it’s important to stay on the right side of that line with an appropriate message cadence.
5. Onboarding after a grudge buy: It’s fair to call insurance a “grudge buy” in most cases, which makes communicating effectively during the onboarding process even more critical. You can use automation to make sure you have the right contact information, a complete file and that policyholders fully understand any extra benefits that deliver value. Coordinate communication across brokers, agencies and distribution network partners so that you fully understand the customer onboarding experience, who the point person is, and how customers access information online, e.g., via any portals or apps. Because insurance is often a “grudge buy,” it’s important to ensure the onboarding process is as seamless as possible to avoid any additional negative feelings.
6. Stay in touch: Automation within core systems and throughout the network can help you stay in touch past the onboarding process and before there’s a claim. Whether customers are changing distribution amounts, making additional payments for life and annuity products or learning about health benefits, take advantage of potential upsell or cross-sell opportunities. However, make sure you know when there’s a potential premium change and leverage automated outreach to follow up in case the policyholder wants to shop around and explore options.
7. Make the claims process as friction-free as possible: The claims process is the ultimate moment of truth, which is why insurers have focused on automating processes starting with the first notice of loss to check issuance, payment and immediate payment transfer, etc. Automating the claims process is table stakes, so get there as quickly as possible if you haven’t already automated the customer-facing processes. But also look beyond the policyholder to automate notifications for everyone involved in the claims journey like adjusters, body shops and shipping companies. Automated communication with all participants will lead to a speedy resolution for the customer.
8. Use automation to grow customer loyalty and your book of business: When you establish a productive dialog with policyholders via automated communication, it creates a tremendous opportunity throughout the customer lifecycle for exploring emerging policyholder needs. It also presents occasions where you can ask for referrals to strengthen your overall brand perception. Renewal time is an important touchpoint for this as it’s a natural opportunity to strengthen customer loyalty and grow your book of business. But it’s only natural if dialog has been ongoing since day one.

Analysis from Gartner indicates insurers will prioritize the customer experience in their digital transformation efforts this year. Workflow automation associated with claims is definitely part of the equation, but to set your P&C operation apart from competitors, think beyond claims automation. Use automated communication to keep policyholders at the heart of your digital transformation journey, from quotes to onboarding to claims to renewals and referrals. This is the top way to cultivate a competitive advantage that lasts throughout the policyholder’s lifecycle.

Tara Kelly is founder and CEO of SPLICE Software, a customer engagement company that specializes in using big data, small data and artificial intelligence to create messages that drive customer engagement and the desired call to action. To reach this contributor, send email to splice@nextpr.com.

These opinions are the author’s own.

See also:

• 2023 Insurance technology update: Looking back, looking ahead
• Data and technology will unlock new doors for insurance businesses
• Digital transformation is no longer optional for insurers