Our Wired World

Modernizing Customer Communications: Customer Expectations In A Digital World

Customers expect to interact with their insurance companies across a variety of channels

A ground-breaking report from the tech-advisory firm Aite-Novarica, shakes up the status quo of entrenched legacy client-communications, recognizing that ‘digitization is revolutionizing how we’ll interact with customers’. Access the full report here.

Boston, August 17, 2021 — Insurance companies deliver communications to their existing policyholders, members, customers, and agents through customer communication management software. They have been investing in these solutions for years, if not decades.

Despite these investments, insurance companies are feeling the pressure to modernize their customer communication strategies to meet customer expectations in a digital world. For insurance organizations to transform the customer experience, content needs to be dynamic, interactive, persuasive, and mostly importantly, timely.

“Digitalization is changing how customers interact with an insurance company,” says Aite-Novarica Group senior analyst Stuart Rose. “Technology advances, cloud computing and consolidation of outdated existing solutions are driving the demand for new customer communication management (CCM) solutions as 43% of insurers indicated that they are likely to replace their CCM in the next 12 months,” he explains.

This report, commissioned by Cincom, an industry leader in CCM software, identifies how the digital transformation is impacting the customer experience and CCM software. It is based on Aite-Novarica Group’s online quantitative survey of 60 life, health, and property and casualty insurance companies globally. The survey was conducted between May and June 2021, targeted at insurance executives from Tier-2 and Tier-3 insurers.

Excerpts From ‘Modernizing Customer Communications

Insurance companies have always struggled with how and when to engage with their customers. Communication strategies have been disparate across the organization, with different objectives from different departments, often resulting in multiple customer communication solutions. Add to the mixture the growing variety of communications channels and constantly changing regulations, and it is easy to see why insurance companies struggle to meet customer expectations.

Insurance companies deliver communications such as customer service letters, renewal notices, and explanations of benefits to their existing policyholders, members, customers, and agents through CCM software. CCM software is not new. Insurance companies have been investing in these solutions—including a combination of CCM vendor solutions, in-house developed applications, functionality incorporated into core legacy systems, or manual processes using products like Microsoft Word—for years, if not decades. Despite these investments, insurance companies are feeling the pressure to modernize their customer communication strategies to meet customer expectations in a digital world.

Digitalization is changing how customers interact with an insurance company...

Supporting multi-channels is only part of the equation. Regardless of the channel, customer communication is only as good as the content delivered. For insurance organizations to transform the customer experience, content needs to be dynamic, interactive, persuasive, and mostly importantly, timely.

The Market

Insurance is a highly competitive market. Insurance companies that deliver an exceptional customer experience through personalized multichannel communications is essential to sustaining a competitive advantage. Despite the advancements in technologies, the practice of many insurance companies communicating with their customers is still in the dark ages with print and “snail mail.”

Insurers expecting consumers to complete paper forms, scan them, and email them back is unacceptable. Some insurance companies are making advances such as providing a fillable PDF file, which is a step in the right direction, but customers are demanding a more interactive digital experience. The COVID-19 pandemic has accelerated the urgency in digital transformation, as work-from-home mandates have significantly impacted traditional mailing and communication operations.

Customer communications are critical throughout the customer life cycle. Most insurance companies have invested in CCM solutions. However, mergers and acquisitions and siloed departments have resulted in multiple legacy core systems and homegrown applications, making accessing the data a challenge.

Evolution Of Customer Communication

Traditionally, communications were primarily printed and mailed to customers. Insurance companies would send policy documents, and agents would mail the renewal notices. Health plans send paper explanations of benefits that go unread by many consumers—given the receipt of the document is long after the doctor’s visit occurred. As technology advanced and the digital revolution took hold, new capabilities have made it possible to increasingly personalize communication and distribute it across multiple channels in real time. Today, email is by far the most popular distribution mechanism, with 42% of an insurers’ customer communication occurring in this channel. SMS/text is growing in popularity with 15%, followed by traditional print (14%), and web (11%).

 

 

 

About Aite-Novarica Group
Aite-Novarica Group is an advisory firm providing mission-critical insights on technology, regulations, strategy, and operations to hundreds of banks, insurers, payments providers, and investment firms—as well as the technology and service providers that support them. Comprising former senior technology, strategy, and operations executives as well as experienced researchers and consultants, our experts provide actionable advice to our client base, leveraging deep insights developed via our extensive network of clients and other industry contacts. Visit us on the web and connect with us on Twitter and LinkedIn.