Customers today expect a frictionless claims transaction that will be resolved with the same execution, efficiency and speed as an Amazon purchase. (Photo: Jim Young/Bloomberg)

We live in the age of the empowered consumer. Customers today expect to have what they want, when they want it and with whatever amount of interaction they want to engage in to get it. Meeting these clearly elevated expectations is now merely table stakes for the insurance industry when it comes to building strong customer relationships. How have people come to expect this level of personalized and convenient service? Look no further than that brown box with the smile on the side at your front door for the answer.

Related: J.D. Power study: How interested are consumers in Amazon, Google for insurance?

The Amazon Effect

The Amazon Effect, as it's known, refers to how the retail giant's use of technology and digital innovation has dramatically changed how customers demand to interact with businesses today.  Whether it's the Amazon platform's ease of use (i.e., 1-Click Ordering), their proactive customer communication (i.e., regular shipping updates), or their amazingly efficient fulfillment results (i.e., Same-Day Delivery), the company's logistical achievements have clearly set a new standard in customer service.

For most businesses today, these kinds of digital advancements have raised the bar with regard to their customers' expectations. Embracing technology has become an absolute necessity for operational efficiency and sustained growth. The insurance industry is no exception. Agencies and carriers are rushing to adapt in order to remain relevant in this constantly evolving world. The shift is happening through deliberate capital expenditures, but it's also happening organically as baby boomers retire and the age demographic of the insurance workforce shifts. A generation of digitally-enabled agents is already interacting in this world with ease because they've grown up transacting in it every day.

The bottom line for insurance carriers is that independent agents have options. For example, an agency may work with carriers outside of the American Modern Insurance Group, and that means we're stacked up against the competition. Consumers and businesses also have options when it comes to the insurance purchase. Wholesalers, independent insurance agencies, captive agencies and digital InsurTechs are all competing for a piece of the pie. Price is one way to gain a competitive edge, but if the ease of doing business isn't part of the transaction then the price may not matter much.

Related: Why insurers need to stop worrying and love Amazon

A human touch is still needed

The ability to access account information with intuitive and sophisticated tools is another price-of-entry benefit that customers have come to expect. But digital platforms have not eliminated the customer's need to speak to an expert when necessary. Whether it's evaluating complicated risk scenarios or filing a potentially life-disrupting claim, complex issues often need the expertise and guidance that only a real human interaction can provide. In that way, technology is fast becoming a positive enabler for agents because it frees up time for more valuable interactions with clients. And with the wide adoption of social media, chat, text, and video conferencing tools, those interactions can happen where and when it's most convenient for the customer.

Advanced data is allowing carriers to underwrite policies that are more accurately tailored to customers' needs than ever before. But even with a foundation of predictive analytics and customized coverage, a policy is still nothing more than a promise to pay until a claim is actually paid.  At the end of the day, the claims process will be the moment of truth in that relationship.

Customers today expect a frictionless claims transaction that will be resolved with the same execution, efficiency and speed as an Amazon purchase. Carriers are embracing technology to speed up the claim process and better utilize adjusters on more complex claims. For example, chatbots can be used to update customers during select periods of the claims process while those with questions can also send a text message to their adjuster for a speedy response. But while there's no question that technology removes claims processing obstacles and shortens response time, unlike an Amazon order for a new basketball, the claims experience also needs to come with a high degree of humanity. Striking a balance between technology and human empathy is essential in providing the caring customer service that often distressed policyholders require when recovering from potentially devastating events.

If Amazon has taught us one thing, it's that simply meeting customers' expectations isn't enough. Embracing technology as a positive enabler in order to exceed customers' expectations is the new norm. Agencies and carriers need to stay ahead of the technology curve, stay relevant to their evolving customer base and continually optimize their operational efficiency. If they don't, they may risk falling behind quickly.