5 Ways Insurers Can Weather Digital Disruption

The rise of the smart phone and tablets has been unstoppable. Now that the flood waters are receding, how can insurers act to give customers the experiences they expect, and insure themselves against death by attrition?

All puns aside, the time has come for insurers to acknowledge that they are not immune to the effects of digital disruption. The fact that so few insurers have begun to take steps towards modernizing their digital experiences is understandable; the challenge and cost of changing entrenched processes, overhauling legacy systems, and re-cataloging untold amounts of (hopefully) digitized assets is enough to send anyone rushing off to the calming waters of denial. However, you only have to look at the changes that are sweeping through the financial services industry in general to see that doing nothing is no longer an option.

Now is the time for insurance providers to accelerate towards rapid innovation. As banks and other financial institutions pour their efforts into the digital channels, they have been able to expand their offerings and streamline their business processes, making them more agile and competitive. Unless insurers begin offering customers experiences that are easy and enjoyable as well as delivering the flexibility they are looking for, insurers could well begin losing out to today’s more customer-centric banks.

Accenture’s latest research shows that a poor experience is the key driver for customers to switch insurance providers:

Poor Experience Fosters Switching

And yet according to EY’s 2013 report Insurance in a Digital World reveals some startling facts:

EY Digital Insurance

Insurers who want to remain relevant and hold on to their customers in the coming years will have to work hard and fast to reverse their current position. Here are the five key steps to weathering the storm of digital disruption and emerging successfully:

1. Think about your customers first and your bottom line will thank you later.

A customer-centric approach is absolutely essential, not just for a creating a successful digital experience but ultimately for creating a successful business. Insurers have a notoriously bad reputation when it comes to customer experience, and it’s no surprise when you look at some of the experiences customers find most annoying when dealing with their insurer:

Frustrating Experiences

2. A single point of management streamlines business process, eliminates waste, and facilitates a holistic view of the customer.

By implementing a centralized platform from which to manage all customer touch points and business processes businesses can eliminate information silos and ensure that many of the key frustration points for customers, such as having to repeat information or contact customer service multiple times.

3. Omni-channel experiences make the customer feel valued and understood.

Omni-channel experiences are made possible by a customer experience platform (CXP) that gives a holistic overview of the customer. An example of a great customer omni-channel experience could entail something like this:

  • A potential customer sees an online banner campaign advertising reduced rates for car insurance that invites them to take a photo of their car and share it with the insurers facebook page for a free quote. They decide to do it.
  • The insurer’s CXP registers the post, scours the car loan database for the relevant information and automatically posts on the customer’s page that their quote is ready if the customer will allow access to their social graph.
  • Once the insurer has access to the graph, they email the quote and personalized offer to the potential customer.
  • The next time the customer is in the vicinity of a branch, they receive a notification reminding them of their discounted offer and informing them they are close to a branch if they want more information. They decide to visit.
  • When they enter the branch the in-store iBeacons recognize them by their smart phone and social media app, and notify the CXP, which sends a message to the tellers so that they already have the customer’s application on their screen and can welcome them by name.

4. Avoid customer experience burns: Eliminate friction from origination, onboarding, enrollment and claims.

As you can see from the example above, by implementing a CXP and creating truly omni-channel experiences, processes that in the past have been boring and downright difficult can become painless. Insurers should be taking advantage of technology and using it to make their own, and their customers’ lives easier. It may not happen overnight but by putting in place the right analytic tools to see where customers abandon enrollment and setting up A/B tests to optimize forms insurers can start to make big wins with their customers.

5. Keep it personal and relevant to build customer engagement and boost sales.

Personalization and targeting are absolutely essential to creating effective cross- and up-sell campaigns. Having the right tools can keep you from making mis-timed or insensitive offers that destroy relationships. They can also ensure you deliver relevant messages in a timely fashion. For example, a family may have a child who has recently reached college age, a message asking whether or not they’d like to add another driver to their car insurance plan could be seen as a helpful or even friendly reminder.

Digital disruption might be calming down as far as most of the world is concerned but for insurers the world over this may be the calm before the storm. For those who have no digital agenda it’s time to start look for partners who can help them meet the challenges ahead, and who understand what today’s customers expect from their insurance providers – before they find someone else who’s better prepared to meet their needs.


For more information and tips on how to meet customer expectations, download our white paper on creating omni-channel experiences.