Our Wired World

For Life & Health Carriers, Time to Close the Digital Gap

To ignore the wave of reinvention and rebuilding the customer-experience puts the industry at a distinct disadvantage

by Giuliano Altamura

Mr. Altamura is Financial Services Business Unit Manager, Fincons Group. Before joining Fincons Group, Giuliano Altamura worked at Accenture for almost a decade, gaining a strong foundation in integration architecture, multi-channel architecture, and application development for the web and for call centers, mainly working on CRM projects in the banking and insurance sectors. Giuliano joined Fincons Group in 2004, where he was instantly able to apply his expertise working with Swiss banking clients. In 2011, he took responsibility for the Financial Services Business Unit, to help develop the business in the fields of banking and insurance.

Consumer interaction with insurance providers is evolving rapidly and this is no less true in the health and life insurance sector. With the insurance industry representing 2.7% of GDP in the US , there is unprecedented pressure on carriers, brokers and agents alike to up their game if they want to stay in the running in the digital world.

A joined-up approach to the challenges that insurance providers are facing to keep pace with changing consumer behavior and technological innovations will be a win-win for all involved. To ignore these opportunities to reinvent, or a refusal to act quickly to build new customer relationships based on current consumer expectations, will put carriers and brokers at an insurmountable disadvantage in light of today’s competition, most notably in the guise of emerging insurtech start-ups.

It is indisputable that digital transformation and the rise of insurtech, in particular telematics, is changing the face of the insurance industry. The pioneers are responding to this technological disruption, and the needs of today’s tech-savvy consumers, by offering a new, transparent approach to insurance purchasing and game-changing solutions to the digital challenge. They see technological innovation as an opportunity and not a threat. With the potential for digital usage to overtake traditional as the main vehicle by which people research and buy insurance products, those firms that take the initiative now to embrace digital will hold the upper hand in the evolving market.

So which areas are coming to the fore in the race to stay ahead of the digital curve?

Go mobile

The number of people buying insurance via mobile devices is continually on the up. For all areas of the insurance sector, mobile presents a highly effective way to reach online consumers, and the trend is increasing quarter-on-quarter . With this in mind insurers need to provide mobile-optimised websites that give people the transparent, user-friendly, flexible purchasing experience they have come to expect with any online transaction, regardless of industry. Taking into account that it is customary for brokers to allow a client sitting with them to see the information on their computer screen, it is all the more important to ensure that interfaces are intuitive, attractive and easily customizable.

The younger generation in particular is web and mobile dependant in many aspects of their day to day lives and expects the flexibility, convenience and the autonomy that mobile, and especially apps, gives them in their dealings with suppliers. Apps are not only an excellent way to deliver a streamlined, more effective research and purchasing experience, but also to handle core processes such as policy changes, renewals, claims reporting or even triggers to remind policyholders it’s time to book a health check-up. Further, pioneering insurers are taking a lead in delivering add-on services to users via apps such as a function to consult with a doctor at any time, and order prescriptions without having to leave the house.

Go Wearables

This brings us to wearable technology, which is the next step in using digital to transform the relationship between policyholder and customer. Wearables is already a huge and expanding market – it is predicted that 81.7 million U.S. adults over the age of 18 will own a wearable device, including smartwatches and fitness trackers, by next year.

The opportunities that these technologies present to insurance carriers and brokers are multiple. By allowing users to self-monitor via health and fitness apps, insurers have the chance to tailor policies to individuals using their unique data rather than a one-size-fits-all approach. This fosters increased customer loyalty and builds a relationship between carriers and users where interaction is not just once a year when a premium is due. Access to accurate and prolonged information about a client’s health and fitness benefits the insurers by enabling them to reduce costs and risk. In turn, policy holders have the option to lower their premiums – and it goes without saying that healthier consumers equate to less hospital visits, a positive outcome for all involved.

To ignore these opportunities to reinvent, or a refusal to act quickly to build new customer relationships based on current consumer expectations, will put carriers and brokers at an insurmountable disadvantage

The provision of tailored and user-friendly apps is a win-win solution for customers and providers of health and life insurance products. Not only do they meet expectations of the digitally-savvy consumer but they allow carriers to build closer relationships with their clients that vastly improve customer loyalty.

Omni-channel matters

The rise in mobile technologies is just one of the trends in purchasing behaviour, but it is important to note that mobile should not eclipse the other communication channels when it comes to interacting with health or life insurers.

In fact, what is clear is that consumers want to engage with their insurance provider at a time and place that suits them, through the whole range of platforms that we all have at our fingertips today. If we look at the typical purchasing lifecycle, it is becoming commonplace for enquiries to be started via one channel – such as Facebook, email or web chat – and completed on another, perhaps by telephone or an in-person meeting. Therefore providing a seamless transition between channels is of vital importance. Carriers, agents and brokers who are unable to do this will fall short of policyholder’s expectations and give the impression of a disjointed business that does not place the needs of its customers at its heart.

With this desire for flexibility that today’s multi-channel world offers, it becomes evident why Artificial Intelligence (AI) holds such potential to transform the customer-facing front-line of carriers and intermediaries alike. Chatbots offer the ability to offer 24-hour support to clients, handling basic enquiries and assisting with policy research, immediately ticking the boxes for the customized, flexible and ‘always on’ engagement desired by the consumer. In the near future we will see chatbots are being further developed to encompass yet more sophisticated capabilities, for example, understanding and mimicking human conversations to make engagement quicker and even more convenient.

Big data delivers

However, multi-channel delivery, which is so crucial to enabling the integrated experience that drives customer loyalty, relies on having the right underlying infrastructure in place. And herein lies perhaps one of the main obstacles traditional insurers, brokers and advisors need to surmount if they are to position themselves competitively in the market, in particular against the new breed of digital start-ups.

At the moment it is often the case for large insurers that the data they hold on a client is siloed in legacy systems across the organization and held for use by individual departments whether this be Life, Health, Property or Claims and Finance. Consequently pulling together data from multiple communication channels, and having a unified view of the customer, is simply not possible with current systems.

But it is this single view that is absolutely imperative if they are to properly understand their customer base, tailor offers appropriately and maximize cross-selling opportunities. A broker dealing with a customer face-to-face or over the phone must be in a position to offer a customized and timely service based on a real-time view of their client’s recent interactions buying history. Carriers that offer this functionality through their broker portals stand in good stead to develop the deeper, mutually-beneficial and data-driven relationships that are required today.

Overhauling Legacies

It can be expensive, time-consuming and resource-heavy to gather information feeds from disparate departments and form the required overarching data repository. The fact is that overhauling legacy IT infrastructure and modernizing systems is a complex challenge. This is often why experienced system integrators are brought in. The benefits can be tremendous for the organisation as a whole and its network of intermediaries; based on the new, unified infrastructure, it will be well-placed to create modern front-end, digital interfaces that will integrate smoothly with agile back-end systems and make in-depth data analysis and information-sharing a reality. ‘Big Data’ that is readily accessible for the insurer and its network gives them a crucial tool to differentiate themselves from other providers and build customer loyalty.

Enabling this level of data accessibility and consistency will also provide a platform for the organization to leverage the wider benefits of AI, not simply at the front-end, but in revolutionizing the way data is applied in back-office processes. AI is poised to supercharge the power of organizational data – for instance by underpinning predictive analysis, product pricing and even underwriting, enabling more cost-effective and low-risk decisions based on accurate, detailed understanding of customer behavior.

With direct gross premiums amounting to USD 2,673 billion in 2016 , ignoring the opportunities to embrace digital innovations to extend market share would be foolhardy, especially faced with the rising tide of digital start-ups who offer consumers the flexibility, user-friendly and transparent approach that they desire. If carriers invest in new systems that enable innovative mobile delivery, omni-channel interaction, AI-driven data analysis and information sharing, the benefits from a customer and operational perspective will be felt by all levels of the insurance ecosystem.