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Is the intrinsic value of the coverage enough? Or do new customers want more from their insurance company? Today’s insurance experience is often cumbersome, difficult, and complex—and consumers are demanding more, especially for digital convenience and engagement. However, life insurers are struggling to provide this kind of value—leaving large gaps in the experience with little to no engaging interaction or enjoyment after the purchase.
Today, insurers are working hard to find answers—they are investing in digital automation—with recent acceleration thanks to the pandemic. Innovative insurers are attempting to deliver the kind of immersive experiences that customers have come to expect from digitally driven brands, like Amazon, Netflix or Peloton, for example. Insurers are also keenly aware of sky-high InsurTech investments and threatening new entrants, as seen in recent partnerships between big tech and mass retail.
With the Customer Engagement Continuum, Celent offers life insurers a roadmap to becoming more valuable to their customers’ daily lives, to be more engagingly relevant to their health and well-being, and to deliver the kinds of experiences required to curate and nurture differentiating connections with digitally savvy consumers.
What is the Customer Engagement Continuum?
The Customer Engagement Continuum is an experience and engagement roadmap—as explained in Celent’s report Catching Up in Life—that “is designed to frame the insurer’s journey from digital automation of existing processes to the curation of highly valued and engaged customers.” By implementing the ideas on the Engagement Continuum, insurers will create more compelling value propositions by providing richer experiences and offerings—the keys to value carried beyond the transaction for the product.
The Engagement Continuum includes four steps, each representing the potential for increasing the value that customers derive through their relationship with an insurer’s platform, services, and products. It incorporates the philosophies and strategies, and the technical capabilities, required to produce a compelling customer experience.
4 Steps for Improving Customer Engagement in Life Insurance
Life insurers that want to better understand the philosophies, strategies, and technologies for engaging with customers can follow the four Engagement Continuum steps.
- Automate your value chain. Improving the efficiency of your digital investments can not only lower costs but improve the experience. Automating manual processes to provide digital and self-service capabilities (such as virtual assistance, automated underwriting, and digital onboarding) can bolster service quality. For example, among insurers that rely on paper applications, the weighted average not in good order (NIGO) rate is 50 percent; that number falls to 10 percent for insurers who’ve implemented e-apps. The methods reviewed include self-service portal, mobile app, e-delivery, and wizard-based approaches that modernizes the insurance buying experience.
- Commit to the customer’s point of view. While many insurance IT organizations are already investing in automating the value chain, they run the risk of introducing fragmented or siloed experiences if they don’t prioritize the user’s point of view of the entire organization. Customer centricity is critical because it emphasizes the customer’s expression of value. It incorporates the total view of your organization (across lines of business) and the experiences (positive and negative) that customers have while interacting with it. Ways to execute a commitment to customer centricity include creating strategic partnerships, as Lemonade and Bestow have done for term life, with Lemonade managing customer onboarding and Bestow handling the technical aspects (risk assessment, fluid-less underwriting, and balance sheet capabilities, for example). Also, make certain that customer communications and transactions are designed to match the customer’s focus, rather than the insurer’s internal (and perhaps disjointed) organization. Deliver superior digital experiences that make it easy for customers to not only purchase life protection, but to engage with your brand as a lifetime partner.
- Curate digital signals to predict behavioral patterns and key life events. Using analytic platforms that analyze patterns in customers’ online activity can help create automated coverage models—fine-tuned to meet customers’ needs. This process, called guided immersion, helps insurers avoid opportunity costs that may arise from not capturing important moments in customers’ lives. For example, Cathay Life created AI-informed analytics platforms to analyze user behavior—website and app data yields information about customers’ behavior, intentions, and preferences that can be used to deliver customized content. This has helped reach and provide an immersive experience for digitally astute, yet often underinsured, younger customers (ages 24–32). Insurance companies that aren’t yet skilled in data, insights, and advanced analytics can partner with an insurtech or a specialized provider to accelerate adoption to engage customers at meaningful points in their lives.
- Create an engaged community. Members of an engaged community have a sense of belonging and of shared goals—and they derive deep value from them. By developing a value-based platform, insurers can invite customers into an engaged community of like-minded individuals—creating meaningful experiences and longer-term relationships with your brand. The method involves the deemphasis of product (features, functions, benefits, etc.), which is replaced by focus on brand-informed ethos, values and community experiences. Doing so can create a compelling reason for your brand to be part of a customer’s regular routines. One trendsetter on this front is John Hancock. Instead of only communicating with customers a few times annually about unexciting things like billing and policy changes, its Vitality platform interacts with customers in real time 20+ times/month regarding their health, diet, and exercise. The policyholder benefits from the engagement in their health; the insurer benefits via a lower chance of claims.
Life insurers are trying to focus on experiences and engaging relationships. The Customer Engagement Continuum is a roadmap to follow with many good examples for clarity. The framework will allow you to keep pace with customers’ expectations driven by today’s digital economy.