Time for Digital
By Giuliano Altamura, Financial Services Business Unit Manager, Fincons Group
It is becoming increasingly evident that the insurance industry has fallen behind when it comes to adoption of digital services. This fact is widely recognised by most executives in the insurance ecosystem, with out-of-date front-end interfaces and inflexible back-end and legacy systems already having a detrimental impact on customer relationships. At best, customers or prospects become frustrated with the digital offerings of their suppliers but grit their teeth–possibly assuming that the alternatives might not be much better–and at worst, they become so disillusioned with their experience that they defect to competitors, taking their business to a more digitally-minded, customer-centric organization. This clash between expectation and delivery is set to become even more acute as digital startups and advancements in “insurtech” accelerate the disruption and competition in the sector. It is time that traditional players adapted their thinking to stay ahead of the digital curve and truly focus on the needs of today’s customers.
So what are those needs? Our experiences in many areas of our high-tech consumer lives have taught us to expect services that are defined by digital technology, choice, flexibility, customization, self-service, omnichannel consistency and user-friendliness. This combination of factors often poses a major hurdle for insurance providers. In terms of technologies, it is clear that e-commerce, in particular via mobile, must be a priority. According to figures from the U.S. Commerce Department, web sales increased by 15.6% in 2016, which is the the highest growth rate since 2013. It is evident that carriers, agents and brokers who do not offer mobile-optimised websites and apps that match the modern set of expectations will damage their ability to attract and retain customers.
The commercial scope for mobile interfaces and apps goes far further than simply providing a tool to research and purchase policies–although it is vital that these functions are intuitive and straightforward. Industry pioneers are already embracing the potential for mobile technologies to deliver value-added services to policyholders that contribute to a stand-out customer experience, build loyalty and even play a role in policy customization. The application of wearable technology in healthcare is a prime example. According to the analyst IDC, the volume of wearables sold across the globe reached 102.4 million in 2016, compared to 79 million the year before. Annual growth was nearly 30%. This points to the valuable opportunity for insurance carriers to tap into the gradual take-up of wearable health and fitness devices, using the data captured to tailor policies to the individual rather than relying on impersonal health assessments, estimates and generalizations. Insurers reduce their risk and improve the depth of their relationship with the customer, who in turn benefits from the possibility of reduced premiums and, of course, a powerful incentive to improve their health.
One of the most prominent digital technologies that already defines the shape of today’s customer interfaces is Artificial Intelligence (AI). Chatbots are helping to deliver a 24/7 customer service function, meeting consumer expectations for an immediate and personalized response at a time that suits them. Speech recognition, among other technological advancements, will see chatbots equipped with even greater capabilities in the near future, allowing them to handle ever more complex queries and decision-making that frees up human agents to focus on higher value tasks within the customer journey.
At this stage it is important to emphasize that the take-up of digital channels must not eclipse the enduring need for customized and data-driven communications delivered via offline channels. Contact centers and face-to-face agent and broker meetings, for instance, certainly retain a role in the modern insurance landscape. In general, consumers are not ready to go entirely digital–in fact, insurers that do not offer the option of human contact risk appearing faceless, impersonal and out of touch with customer preferences. This places a huge importance on consistency and integration across all channels; for instance, customer journeys may be initiated on social media but will probably be transitioned to other channels such as email or a contact center. If each agent–automated or human–does not have access to the same interaction and transaction history, the overall customer experience is likely to be disjointed. There should be a full view of the customer across the organisation, and every touchpoint should be tracked and visible.
The commercial benefits of the single customer view go beyond enabling a coherent and joined-up experience for the policyholder. Having a detailed, rounded picture of the customer (or customer segment) is the foundation for the advanced profiling and analysis work that can guide decision-making across the business. For instance, new opportunities for cross-selling or up-selling may be identified that bring substantial commercial reward. AI also plays a growing role here, thanks to its ability to supercharge the analysis of vast volumes of data, track customer behaviour and identify patterns and trends. A recent article in The Financial Times stated: “Data analysis is nothing new in insurance, an industry built on the use of statistics to assess risk. But AI expands the amount of data that can be analysed and the way it can be used.” Even much of a carrier’s underwriting may be handled by AI in the future.
Integrated, omnichannel data management and intelligent analysis naturally places heavy demands on back-office processes and technologies. In many cases, a systems review and overhaul is necessary and third-parties may be best placed to deliver this, whether supporting the in-house team or on an outsourced basis. Digital adoption is not a nice-to-have; it is imperative to meet the needs of direct customers, to improve the efficiency of internal operations from claims processing to underwriting, and to create new relationships with intermediaries through smarter, data-driven portals and intelligent analysis. It is clear that the continuing drive towards digital will involve fundamental cultural change and technological agility, but those who seize the initiative now to adapt to the new norms will reap the commercial rewards.
About Giuliano Altamura, Financial Services BU Manager
Before joining Fincons Group, Giuliano Altamura worked at Accenture for almost a decade, gaining a strong foundation in integration architecture, multi-channel architecture, and application development for the web and call centers, mainly working on CRM projects in the banking and insurance sectors. Giuliano joined Fincons Group in 2004, where he was instantly able to apply his expertise working with Swiss banking clients. In 2011, he took responsibility for the Financial Services Business Unit, to help develop the business in the fields of banking and insurance.
