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The coronavirus made the entire economy shift to becoming more digital and remote. While this accelerated digital transformation significantly, it also meant that decisions under pressure were often made. Below, we will discuss some of the key issues that insurance providers need to address carefully when implementing digital solutions and infrastructure.
Take a double digital approach: back end and front end
Insurance companies need to focus on both modernizing the back end and front end so that the two systems communicate effortlessly. Yet the digitization for each requires a slightly different approach.
For instance, implementing back-end changes are critical for ensuring agent efficiency, but moving to a new system should be undertaken gradually and deliberately to ensure data is kept safe.
Adopting digital front end platforms allows insurance companies to deliver a better customer experience to customers while reducing claim processing time, expediting the sales cycle, and boosting agent efficiency. It’s usually less delicate than the back end and can be implemented faster, though it’s by no means less of an important decision than the back end.
There’s good reason not to neglect the front end during the digitizing process. It’s what customers actually see, and can make or break their experience. According to one study, a mere 34 percent of insurance customers say they were easily able to communicate with their insurers to ask questions or make policy modifications. And the study shows that 50 percent of insurers fail to meet consumers’ demand for online chat servicing, and 25 percent lag when it comes to meeting demand for website servicing.
A two-pronged approach of revitalized front end and back end systems will allow insurance companies to serve customers effectively, efficiently, and securely.
Adopt broader, turn-key solutions, not single-service providers
eSignatures are great. Chatbots are great. Having a website or application, of course, is great. But insurance providers looking to make a real difference while keeping things easy for agents cannot afford to simply adopt a multitude of solutions for a multitude of issues. Unfortunately, this is a real danger when trying to make digital changes very quickly.
To be truly digital-first, insurance companies need to allow their agents and customers to easily learn how to use a broad bundle of related solutions. Insurance companies that buy a dozen different pieces of software will inevitably suffer from IT challenges and annoy agents and customers alike. For agents, the training process will be disjointed, long, and cumbersome, as each tool needs to be taught separately. Meanwhile, customers will sense the disjointedness that comes with cobbling together disparate technologies, and potentially struggle to move through their journey.
For all these reasons, it’s critical that insurance companies build their systems intelligently with as few components as possible, covering all their needs and ensuring a smooth user experience for both agents and customers.
Keep it human
Companies that digitize quickly can run the risk of inadvertently removing the human element from those customer processes that do benefit from agent involvement.
Digitization isn’t a replacement for agents—at its best, digitization allows insurance companies to automate standard processes that don’t get any added value from human input. But that doesn’t mean agents have less of a role to play; on the contrary, their role has just shifted to higher-order activities.
Insurance companies that have successfully digitally transformed train agents to handle complex questions or situations, and guide customers through form-filling in a clear and efficient manner. Their job is to augment technology, just as it’s the job of technology to augment human interactions. The relationship between agents, clients, and technology is meant to be mutually beneficial and symbiotic, not mutually exclusive.
Focus on compliance, compliance, compliance
New technology should not be at odds with staying compliant. Yet in the worthy and critical quest to provide customers with more efficient front end services, it’s possible that a technology provider that seems like an excellent solution could potentially jeopardize critical regulatory requirements that insurance providers and brokers are required to abide by.
Indeed, technology itself can be a means of compliance enforcement, with the added bonus of ensuring compliance is no longer the cumbersome, manual process of the past.
That’s where regulation technology (RegTech) comes into play. Insurance companies who adopt technology that is specifically geared towards automating more compliance functions will reap the dividends of this investment. RegTech allows compliance officers to work more cost effectively, focus on higher-order tasks where human understanding is required, and adapt quickly to an ever-changing regulatory environment.
In addition to automating routine compliance tasks, compliance officers can use RegTech analytics to identify areas of higher regulatory risk, such as customer fraud, form filling, and agent sales and servicing. This will ensure that compliance is turned into an actionable science rather than a game of whack-a-mole.
Ensure a complete customer journey
Increasing numbers of insurance companies now allow customers to file claims or buy insurance without having to meet an agent in person. This is critical in the era of coronavirus, and will continue to be the expectation even once the “Great Lockdown” is completely over.
But broken digital journeys continue to be pervasive, even for those insurance companies that have already given up the most obviously antiquated channels such as in-person meetings, snail mail, or fax.
For example, imagine that a policyholder decides they want to file an insurance claim while commuting on the train. They call the insurance agent, who then emails them some forms to fill out. Unfortunately for this policyholder, the forms can’t easily be filled out without a PDF reader—meaning they have to wait till they’re home to take care of this task. Inevitably, many policyholders in this situation will put off filing a claim, or forget about it. It’s the nature of our world today: we’re too busy, too distracted, and always on the go.
Insurance companies would do well to allow policyholders to easily complete the entire claims process from a single digital channel of their choice (mobile or computer). Whether they’re in front of a computer at home or on the go, customers should be able to fill out and submit forms without technological limitations getting in their way.
Create a unified digital ecosystem
Broken digital journeys are an anathema not just for the individual policyholder, but among the different parties involved in the process. The insurance industry is characterized by many moving parts, including forms and data, that get shuttled between customer, agent, insurer, claims adjuster, and provider. Add cumbersome physical paperwork and processes to the mix, and things start to get very cumbersome and messy.
For example, currently agents work with customers to fill out forms. Those are mailed to insurers and frequently come back with questions or missing information. Forms must be refilled and resigned, forcing the whole process to start over again. Cycle times are prolonged, data integrity is compromised, and costs balloon.
On the other hand, switching to a system of digital workflows and automation between entities allows for a seamless transfer of information and elimination of errors. This reduces cycle times, slash rework, improves the sales process, and boosts NPS and eNPS.
The bottom line: Go digital—with your clients’ priorities in mind first
The coronavirus has catapulted insurance companies to new digital heights. Yet much like Icarus of the old Greek myth, insurers must be careful not to get too close to the sun without fully understanding what they’re approaching. With a well-reasoned digital strategy, they can provide their customers and agents alike with a seamless, efficient, and effective digital journey.