(Photo credit: Dollar Photo Club.)
Google is at the forefront of two potentially major disruptions that are beginning to hit the insurance industry. The first is Google’s foray into its well-publicized autonomous vehicles. The second is the company’s growing involvement in online auto insurance price comparison tools. The insurance implications of each of these endeavors are wide-ranging.
While autonomous vehicles may still seem like a topic for science fiction, this is our new reality. Automobiles are already rolling off the assembly lines today with autonomous technologies such as adaptive cruise control, automatic braking, lane departure prevention systems and self-parking features. Originally only available in luxury vehicles, these features have quickly moved down market and are now available in many family sedans.
It’s only a matter of time before fully autonomous vehicles begin arriving en masse. Google has invested heavily in the technology and has working prototypes operating in California. The main hurdles now are not technological, but cultural and regulatory in nature. Insurers are just now beginning to think through the implications of autonomous vehicles for the industry, but few would deny that they will loom large, particularly when it comes to the market for automobile liability insurance.
The other Google endeavor that will impact auto insurance is its online price comparison tool. The company has operated an auto price comparison site, Google Compare, in the United Kingdom for more than two years. This month, Google expanded into the U.S. insurance market with Google Compare in the state of California and is licensed to operate in more than half of the U.S.
Google has an immense amount of information on personal habits as a result of its widely-used search engine business. Combining that knowledge along with information derived from Google-built autonomous cars has the potential to put the company in a unique position to price auto insurance more accurately than traditional insurers. If Google only acts as an intermediary, it will not have the underwriting, claims processing and administrative expenses that traditional auto insurers offering online comparisons, such as Geico, do. Moreover, by partnering with smaller carriers, Google helps level the playing field for auto insurance. Additionally, Google will certainly leverage its search business to ensure that its insurance price comparison site is returned at the front of search results when people look for auto insurance information online.
What does all this mean for insurers?
If Google’s goal is to use its unique combination of technology and big data to position itself as an intermediary for low cost carriers, insurers have two possible strategies to compete effectively. These are:
- They can boost the efficiency of their processes and underwriting capabilities in an effort to offset Google’s price advantage, or
- They can enhance the customer experience to increase loyalty and prevent customers from switching carriers based on price alone.
With either of these strategies, effective customer communications management (CCM) will be essential to success.
Lowering costs by improving efficiencies
If carriers want to boost efficiencies, one important area to focus on is their customer communications workflow. They will need the ability to update existing documents and introduce communications that address new product offerings and an evolving marketplace quickly, easily and ahead of the competition. Moreover, regulations are certain to change with the advent of fully autonomous vehicles and insurers will need the agility to efficiently change customer communications in response.
Finding a strategy that leverages existing document composition and legacy investments is key. Equally important to success is that the strategy put in place enables business users to design effective communications without the time-consuming and costly involvement of the IT department.
Enhancing the customer experience
For insurers focused on enhancing the customer experience, effective customer communications are vital. Having the capability to tailor communications to the customer’s needs, delivering relevant, personalized messages through the channel of the customer’s choice, will be critical to improving loyalty of existing customers and winning new ones. Success will require that an insurer can effortlessly optimize document production and delivery across any channels including mobile, email, SMS, social media, web, print, and many other digital and paper channels.
Additionally, taking an innovative approach to typically static documents, such as regular statements, by making them interactive and dynamic can be a true differentiator. Offering customers responsive, customizable views of their data along with colorful charts, graphs and embedded videos will go a long way to add value and strengthen the customer relationship, making it less likely that a customer will switch to another carrier to save a few dollars.
To prepare for the future, carriers shouldn’t wait to implement one (or both) of the strategies discussed in order to stay competitive and differentiate in what is sure to be a highly challenging market environment. Giving careful consideration to CCM will go a long way toward achieving success with a fickle customer base.