"It's all about the customer."

How often have we heard that statement? Probably more times thanwe can count. But this statement may be more relevant than ever aswe exit the "pre-digital" age and enter an environment wheresurvival will be measured by rapidadaptability.

I often write about two areas of the insurance value chain thatlikely are not top of mind when thinking about digitaltransformation — billing and claims. Here, I'llcover policy and customer servicing; certainly a higher profilearea for digital enhancement.

Related: 3 insurance technology trends for building customerrelationships in 2017

Policy and customer servicing should be near the top ofinsurers' "to do" lists when it comes to embracing the digital shift andtransforming into a digitally-optimized, customer-focusedenterprise.

While many insurers express the desire to becomemore digitally enabled, the reality is that most are strugglingto catch up, let alone position themselves as leaders. Technologyis evolving and customer demands are growing faster than mostcompanies can deal with. Add to this the challenge that insurersare often saddled with legacy systems, siloed data, and product (notcustomer) focused processes that make anticipating and adapting tothese changes all the more difficult.

A McKinsey survey from earlier this year reported that mostinsurers in the U.S. and Europe focus their digital attention onsales and marketing. In particular, they focus on the earlieststages of the lifecycle — research and quoting. While these twoareas are important, the survey noted that insurers were lagging intheir ability to service customers digitally after they wereon-boarded.

Related: It's the customer experience,stupid

Differentiation through customer service

Majesco's primary research studieson consumers and small-mediumbusinesses shows that, compared to other industries,insurers are pretty bad at service. Furthermore, our research notedthat poor marks have a demonstrable effect on success. According toCelent research, even agents, who are understandably worried aboutdigitally-enabled self-service reducing theirimportance in the sales process, recognize the need fordigitization of insurance service processes. The research notesthat agents are asking insurers to invest in technologyenhancements to, among other things, improve online policychanges.

Nothing worth doing in business is easy

At first glance, policy and service appears to be an impactfuland straightforward — if not particularly sexy— way to apply digital capabilities to improve outcomes.But looks can be deceiving.

Some of the basic tenets of good service — a 360-degreeview of the customer, for example — can be difficult andexpensive to implement. Regulatory barriers may preventstreamlining how policy changes are implemented online, varyingsignificantly from state to state, and country to country. Legacypolicy management systems may not be able to connect to digitalfront ends in a direct way.

But all of these challenges provide an opportunity to focus on acustomer journey-map-based approach to digital transformation! Bystarting with a vision for digitally-enabled customer service (whatyou want the service experience to be, what business goals you aretrying achieve, what KPIs you will measure for success) and thencreating customer personas and journey maps, you will be able tocreate a transformation roadmap. That roadmap will include people,process and technology changes that you will make over time toreach that vision, allowing for incremental changes over time(instead of taking a riskier, big-bang approach to changes).

This blog post published first at majesco.com,and is reproduced with the company's permission.

Having e-signature and multiple e-payment capabilities canmake a policy change paperless and seamless for the customer.(Photo: iStock)

Don't ignore the shiny objects

Just because we recommend an incremental approach doesn't meanit can't be fun! There is a lot of cool and interesting InsurTechinvestment in this area, which can (and often should) be leveragedto roll out needed functionality without having to build ityourself.

Related: Insurance in the Digital Age: 3 steps to maximizingyour strategy

For example, having e-signature and multiple e-paymentcapabilities can make a policy change paperless and seamless forthe customer, something that has been shown to improve service"ease of use" scores. Chat capabilities (human or chatbot) to walkcustomers through basic to tricky processes is a boon to customerservice, with leaders like Lemonade and Geico leveraging them atalmost every step of the customer lifecycle. Co-browsing optionscan be utilized to help customers navigate particularly trickyprocess steps. Customer analytics can be used to identify customersat risk of leaving, help them manage their risks, and even identifycross- and up-sell opportunities.

Even artificial intelligence (AI) shows promise incustomer servicing, and far beyond just chatbots. IBM's Watson isassisting customer service efforts in dozens of industries and allindications are that it will be especially useful in insurance,where matching customers to products and services can help generaterevenue and improve customer satisfaction. An excellentnon-insurance example is the work Watson is doing with H&RBlock. Watson is used to feed appropriate question prompts to taxprofessionals during client consultations. Bill Cobb, H&R BlockPresident and CEO, said that, "Watson is learning more and more asit does more tax returns." And according to arecent IBM blog, "Watson has learned 600 million datapoints relevant to the industry as well as the U.S. tax code."

Imagine Watson in insurance, rolled out to give agents promptsbased on both individual knowledge and "learned" experience. Watsonwill help insurers translate regulatory requirements and improverelationship management. Cognitive customer service will give realdepth to the possibilities. The Future Today Institute has statedin its 2017 Tech Trends Report that artificialintelligence will soon be integrated into nearly every facet ofwork life.  In a detailed look at industriescovered in the report, AI is the No. 1 trend in every industry.

Watch out for pitfalls

One potential pitfall is to think this service mentality appliesto just personal lines, which is far from the truth. Commercialcarriers have a lot to gain from digitally-enabled servicing,particularly in the SMB market where margins can be thin on aper-policy basis. Commercial carriers may be very amenable toservice outreach that includes risk mitigation advice as well.

InsurTech is not just for personal lines, either. Arecent SMA study highlighted more than 400InsurTechs targeting the commercial space, and how carriersthemselves are interested in leveraging them for, among otherthings, "proactive customer servicing."

Other pitfalls include trying to do too much at once or taking ascatter-shot approach to service improvements. This reinforces thecritical importance of leveraging customer journey mapping tocreate a disciplined approach to capability deployment.

Getting started

I consistently advocate for starting with a vision of what youwant to achieve. Check this against other investment priorities andpain points for your customers and other stakeholders. (Forexample, if the biggest area of complaint is with the claimsprocess, you may want to consider starting there). Create personasand journey maps to guide your decision-making.

Terry Buechner is vice president of DigitalConsulting at Majesco. This blog post published first at majesco.com,and is reproduced with the company's permission. Opinions expressedhere are the writer's own. To reach him, send email to [email protected].

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