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Picture this: Its 10:00 PM, you’re at a rental car counter on vacation and not sure if you should buy the insurance they offer. You take out your phone and call your insurance representative. Bob answers and provides the information you need.
While still on vacation, you receive an email from Bob. It says that a hurricane’s predicted to hit your home town. The email asks if you want your “on demand” property coverage increased to further protect your house, and if you want your classic car towed to higher ground. With a simple reply, coverage is increased and Bob sends a request to a towing company.
Now picture this: On your recommendation, your friend Mary calls Bob for a home and auto quote. He determines that English is her second language. He asks her to confirm, which she does, and tells him which language she’s most comfortable with; they now speak the same language. Then, Bob continues by asking her to provide the information that he cannot get from third party data sources. For example, he asks when her 16-year-old is planning to drive.
Bob also provides safety recommendations:
“Don’t forget to have the outstanding safety recall serviced on your car.”
“Winter is coming and you may want to rotate your tires; I can provide a list of retailers in your area with special pricing.”
And he advises of discount opportunities to reduce the premium:
“If you take a defensive driving course, you can get a discount. I can give you the schedule of local courses and make the appointment for you.”
“If you have your home upgraded with furnace, water, security or other monitoring services, you can protect your home and get an additional discount. We have a relationship with a monitoring company and I can set up an appointment if you would like.”
As their discussion continues, Bob is getting to know Mary and homes in on the items that are important to her. He describes coverage options and pricing, but Mary is a visual person. Detecting that she’s on “information overload”, he immediately sends an interactive chart to her tablet (in her language of preference) and highlights sections as he explains options. Mary chooses coverages and the policy’s bound. She authorizes an ePayment and Bob emails the documents to her.
From now on, anytime Mary and Bob speak, he remembers her preferences, knows that visuals help her, recalls those items that she deems important, and continues to build upon his knowledge of her. Before ending the conversation, he tells her that his employer has relationships with other companies, some of which he mentioned and hundreds more that may provide products and services with discounts for her future needs. Bob tells Mary that she can contact him anytime.
What you’ve just read is a reimagination of the customer experience. It adds new value, relevancy, and creates memorable experiences that can transform customers into raving fans that recommend their representative to friends, family and colleagues.
Bob’s technique includes speaking with customers about matters outside the confines of routine insurance service and sales transactions. Companies that communicate with customers only during a claim or renewal may run the risk of being perceived as a transaction or a commodity, especially at a time where the competitive landscape is changing rapidly—and in particular at a time when lower-price aggregator websites are proliferating.
One way to avoid the commoditization trap is to recognize that, for customers, insurance is part of an ecosystem. Insurers should think in terms of that ecosystem—and the needs and priorities it implies—to increase relevancy, demonstrate new value, become a trusted advisor, and increase the frequency of communication between the insurance representative and their customers. All of these factors have the potential to transform perceptions, strengthen relationships, generate brand loyalty and increase retention.
A Tailored, Multi-Channel Approach
When it comes to customer engagement, a familiar rule applies: “Know your audience and communicate in a way that they’re most comfortable with.”
Certainly, we need to use the customer’s channel of preference, but we can go much further. People absorb and comprehend differently, and communications should be based on their needs for language, diction, diagrams and pictures, and interactive visuals.
Another consideration is that insurers need to aim at technology architecture that puts customer data at the center. The new architecture should have a central customer experience repository that would contain holistic data about the customer or prospect, including relevant communication and other preferences, complete history of the insurer’s interactions with them regardless of channel (e.g., call center, email, internet, texting), and access to transactional data. What is thought of today as a channel evolves to become just a different means of inbound and outbound communication.
All aspects of these capabilities are feasible and becoming more readily available in the marketplace. Let’s break it down:
- Utilizing the ecosystem and building strategic relationships with other companies to enhance the value of the services provided can be done right now. As a result, the insurance representative will be able to provide new value-added services and information, and become a trusted resource engaged for conversations above and beyond quotes, renewals and claims.
- If you’ve guessed that “Bob” is technology, then you’d be correct. His technology is rooted in cognitive computing. Although there are other names and variations of this technology (e.g., AI and learning machines), many people watched IBM’s Watson on Jeopardy in 2011 and can understand what I’m talking about. In terms of technology, 2011 was a long time ago and cognitive computing has been evolving rapidly since then. As a matter of fact, IBM now provides services (Watson-as-a-Service) so that companies can begin to use this technology.
- With regard to data, there are many third-party sources available today, and new ones continue to emerge. As the Internet of Things (IoT) and Big Data evolve, they’ll provide new opportunities to further understand risk and provide new value-added services.
As futuristic as this may sound, insurers are already exploring cognitive computing—and those who are able to effectively integrate it into their processes will have a leg up on their competition.
Some older readers may remember early talk of computers replacing people. Years later, there was speculation that the internet would become the only means of shopping and no one would buy in stores. New and disruptive technologies tend to cause a lot of uncertainly. In my opinion, the technology will continue to mature and there will be great uses for it, but you can’t replace people. The best approach is to employ better tools that help people to do what they do better.
The insurance industry is ripe for innovation and there is an abundance of technologies already available. We have a tremendous opportunity to use them in new ways to generate new value, create memorable customer experiences, and to help companies grow, gain new efficiencies and cut costs.
Very interesting article and something that should be at the forefront of a company thinking in this every evolving world!!
A very thought-provoking article that should be on the radar of company leaders particularly those espousing innovation.
With rising costs and thinning margins, the only way left to enhance customer experience is through proper use of technology. Insuers are already behind in the race compared to other financial services sector. Very nice article, Mr.Field
Very important article. Insurance Industry has a lot to do through technical innovations. Regards.
Very forward looking. Our industry seriously needs to embrace disruption or risk obsolescence by “disruptors” like Google etc. Thanks for a cogent and timely article!
Very nicely explained and allows readers to plug in their own company technology for a view of where they are today and where they should be heading.
Excellent article Mr. Field. Would like to meet so we can discuss this further.