Text messaging may be a less satisfying communication option —due to its emotional superficiality, the inability to deciphernuance or sarcasm, and its use to avoid actual conversation.

But today's tech-savvy, forward-thinking insurers have littlechoice but to incorporate texting (along with app-based messaging)into their prospecting and customer relationship management plansas texting is overwhelmingly popular among consumers, especiallymillennials.

Consider how far text messaging has come in roughly two decades,based on 2015 reporting:

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    • 97% of Americans sent and received at least one text message aday, according to the Pew Research Center.

    • Worldwide, consumers sent about 23 billion text messages a day,or 16 million per minute, according to Portio Research.

    • Text messages have a 98% open rate, while email has only a 20%open rate, according to Mobile Marketing Watch.

"Text messaging has proven itself to be a superior communicationplatform," software blogger Juebong Khwarg recently wrote. "It'sfast, it's accessible and it's multi-functional."

Here is a look at why nine different insurance, technology andcustomer care thought leaders believe texting should be used tostrengthen customer relationships.

No. 1: There are fewer regulatory hurdles than in thepast.

At one time, text messaging between customers and businesses —including insurance and financial services — posed a conundrum.Among other reasons: Federal communications law requires thatconsumers must consent in writing to receive any commercial textmessaging.

However, today's communications vendors are building textmessaging services that accommodate regulatory compliance demandswhile furthering a company's business needs.

Prudential Insurance is among the industry leaders that nowcapitalize on text messaging. Based on the company's success withsocial media campaigns, moving into text communications "was reallya no-brainer for us," Birdia Chambers, Prudential's head of socialand digital strategy said in a recent blog post penned by MyriahWood, the product marketing manager for Hearsay Systems.

Wood explains that texting grew to become a powerful businesscommunications tool because more than half of today's financialservices professionals are texting clients, and statistics showthat almost all text messages are opened, most within just a fewminutes.

No. 2: Texting enhances traditional prospectingstrategies.

Jaimie Pickles is general manager of insurance with the consumerdata and analytics company Jornaya.

He says the use of text messaging is on the rise now thatcompanies have become savvier about securing written consent fromconsumers to receive a text, which is required by the federalgovernment's Telephone Consumer Protection Act (TCPA).

"Consumers typically read an incoming text immediately whereasvoice and email are lower on the list of priorities," Picklessays.

No. 3: Texting is what people want.

Keith Savino considers text messaging to be essential to today'sbusiness relationships because it's what his clients want. Savinois a partner and chief operating officer for Warwick ResourceGroup, LLC, an insurance agency and brokerage based in Warwick, NewYork.

"As technology evolves, the methods of communication change,"Savino says. "Phone, email and texting are the predominant methodsof communication in life today. As a result, agencies need to adoptsystems that allow them to communicate and document thiscommunication in our systems of record… No one method can satisfyan entire book of business."

No. 4: Text messaging supports customer records andengagement.

Fazi Zand, senior vice president of products at EIS Group, saysthere are multiple reasons for insurers to embrace texting alongwith chatbots. Zand shared these thoughts via email:

"While insurance customers readily opt in for text (SMS)notifications such as status of claims, payment and renewalreminders, and agent messages, any two-way conversations withinsurers are far more likely to happen within chat services bundledin the insurer's digital services, or via external services such asFacebook Messenger or Twitter. Customers are growing increasinglycomfortable using digital apps for interactions with insurers forclaims and status, to make payments, get quotes or otherservices."

Zand continues: "The next related step is integrating chatbotsinto these conversations. By integrating chatbots intointeractions, insurers are able to respond to FAQs, guideconversations and triage requests, and quickly gather essentialinformation for frontline agents. Employing chatbots within virtualassistants can provide significant cost savings by improvingefficiency and outcomes, enable 24/7 availability and improve theuser experience for all stakeholders."

"Looking further forward, expect customers to warm to newchatbots with natural language understanding because theseconversationally savvy bots will be enabled to watch, listen andunderstand their spoken questions and responses and leveragesentiment analysis techniques to enhance the experience, while alsohelping to remove the burden of data entry."

Related: Digging into unstructured data with textanalytics

Texting provides insurers with another way to reachpolicyholders quickly. (Photo: iStock)

No. 5: Texting supports a multi-channel communicationsstrategy.

Gail B. Goodman is a national expert on telephone use andstrategy, and a regular communications columnist. She acknowledgesthat text messaging has become pivotal to communications today, butwarns against relying on it too heavily or to convey weightymessages.

"Texting … is only one of your tools and needs to be usedjudiciously," Goodman says. "Being able to add inflection to yourwords will often save you from being misinterpreted through adigital-only message."

Goodman impresses upon business leaders the power of finding andusing their real voice.

"The best use of texting is to clarify information, such asconfirming an appointment or advising your client if you are latedue to traffic," she says, "but not to ask any criticalquestions."

No. 6: Text messaging falls in line with the on-demandeconomy.

Insurance and finance tech innovation experts often to point tothe way Amazon and the Internet of Things (IoT) have shaped today'sconsumer tastes.

Laura Drabik, vice present of Business Innovation for GuidewireSoftware, says insurance companies of all sizes must considerSMS/texting to take advantage of its ability to provide customerswith real-time service.

"This approach is especially useful for claims adjusters'communication with claimants, i.e., claims first-notice-of-loss,inquiries and updates, and the like," Drabik says. "Some insurersand agents use texting to quote/sell to customers/policyholders.Core systems must also be considered in the process, as textingonly serves as a digital front-end; it is the core system thatenables the actual transactions to take place."

No. 7: Texting, along with social media, opens up a24/7 line of communication.

More than 3 out of 4 Americans now own smartphones, and 9 out of10 Americans are online. John Sarich with VUE Software says itfollows that text messaging has become valuable to thebusiness-to-consumer (B2C) relationship.

"The ability to message is largely a function of having [asmartphone] and sharing the number with clients so they can text amessage 24/7 to the agent or service rep," Sarich says. "Also, manyagents do use Twitter, giving their clients easy access tothem."

Texting applications on the B2B side in insurance, however, maypresent more adoption challenges.

"First, the carrier needs to have good portal technology and theability to give access to agents to review certain things such asclaim status, underwriting status, commission information, and soon," Sarich says. He adds that instant messaging built into awebsite may be more functional for carrier-to-agent or vendorcommunications than traditional text messaging.

No. 8: Text messaging keeps insurerscompetitive.

Since other industries have already adopted and executed textmessaging as part of their customer engagement strategies,insurance carriers must fall in line with contemporary consumerexpectations.

"The customers of today have increased expectations arounddigital capabilities," says Chuck Ruzicka, vice president ofresearch and consulting at the Boston-based risk management andsoftware services company Novarica. "Airline companies have learnedto use texting to provide updated flight information to delayedpassengers and to actually improve customer experience duringdifficult times. Insurance carriers can utilize this same techniqueto update claimants on everything from emergency service status toelectronic settlement deposits. The keys are having knowledge ofcustomer preferences and integrated digital processes, which arenot easy tasks for carriers with legacy system portfolios."

No. 9: Text demands clear, concise, straightforwardmessaging.

Lisa Woodley is vice president of Customer Experience and FSIBusiness Consulting at NTT Data, a global IT services company basedin Tokyo that caters to many industries including insurance.

Woodley recognizes that the decision whether to use text raisescomplicated issues for companies in the insurance and financialservices sectors. "The intersection of customer preferences, brokeror agent habits, and regulatory considerations means insurersshould carefully consider when and how to use text messaging," shesays.

Akin to capitalizing on each social media channel, ortraditional communications such as 'snail mail,' texting may beideal for certain types of communications, such as messages thatare "brief, clear, and contains no sensitive information," Woodleysays, or those messages that have a sense of urgency. Banking andbilling alerts, for instance, are well-suited to text messaging. Ininsurance, texting may also work well for claims-processingnotifications.

"It's important to allow customers choice," she adds. "Let themdefine what is urgent and what types of texts they wish to receivefrom you. Never assume."

Elana Ashanti Jefferson ([email protected]) is the senior editor,technology, for PropertyCasualty360.com.