"It's all about the customer."

How often have we heard that statement? Probably more times than we can count. But this statement may be more relevant than ever as we exit the "pre-digital" age and enter an environment where survival will be measured by rapid adaptability.

I often write about two areas of the insurance value chain that likely are not top of mind when thinking about digital transformation — billing and claims. Here, I'll cover policy and customer servicing; certainly a higher profile area for digital enhancement.

Policy and customer servicing should be near the top of insurers' "to do" lists when it comes to embracing the digital shift and transforming into a digitally-optimized, customer-focused enterprise.

While many insurers express the desire to become more digitally enabled, the reality is that most are struggling to catch up, let alone position themselves as leaders. Technology is evolving and customer demands are growing faster than most companies can deal with. Add to this the challenge that insurers are often saddled with legacy systems, siloed data, and product (not customer) focused processes that make anticipating and adapting to these changes all the more difficult.

A McKinsey survey from earlier this year reported that most insurers in the U.S. and Europe focus their digital attention on sales and marketing. In particular, they focus on the earliest stages of the lifecycle — research and quoting. While these two areas are important, the survey noted that insurers were lagging in their ability to service customers digitally after they were on-boarded.

Differentiation through customer service

Majesco's primary research studies on consumers and small-medium businesses shows that, compared to other industries, insurers are pretty bad at service. Furthermore, our research noted that poor marks have a demonstrable effect on success. According to Celent research, even agents, who are understandably worried about digitally-enabled self-service reducing their importance in the sales process, recognize the need for digitization of insurance service processes. The research notes that agents are asking insurers to invest in technology enhancements to, among other things, improve online policy changes.

Nothing worth doing in business is easy

At first glance, policy and service appears to be an impactful and 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-degree view of the customer, for example — can be difficult and expensive to implement. Regulatory barriers may prevent streamlining how policy changes are implemented online, varying significantly from state to state, and country to country. Legacy policy management systems may not be able to connect to digital front ends in a direct way.

But all of these challenges provide an opportunity to focus on a customer journey-map-based approach to digital transformation! By starting with a vision for digitally-enabled customer service (what you want the service experience to be, what business goals you are trying achieve, what KPIs you will measure for success) and then creating customer personas and journey maps, you will be able to create a transformation roadmap. That roadmap will include people, process and technology changes that you will make over time to reach 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 can make a policy change paperless and seamless for the customer. (Photo: iStock)

Having e-signature and multiple e-payment capabilities can make 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 mean it can't be fun! There is a lot of cool and interesting InsurTech investment in this area, which can (and often should) be leveraged to roll out needed functionality without having to build it yourself.

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

Even artificial intelligence (AI) shows promise in customer servicing, and far beyond just chatbots. IBM's Watson is assisting customer service efforts in dozens of industries and all indications are that it will be especially useful in insurance, where matching customers to products and services can help generate revenue and improve customer satisfaction. An excellent non-insurance example is the work Watson is doing with H&R Block. Watson is used to feed appropriate question prompts to tax professionals during client consultations. Bill Cobb, H&R Block President and CEO, said that, "Watson is learning more and more as it does more tax returns." And according to a recent IBM blog, "Watson has learned 600 million data points relevant to the industry as well as the U.S. tax code."

Imagine Watson in insurance, rolled out to give agents prompts based on both individual knowledge and "learned" experience. Watson will help insurers translate regulatory requirements and improve relationship management. Cognitive customer service will give real depth to the possibilities. The Future Today Institute has stated in its 2017 Tech Trends Report that artificial intelligence will soon be integrated into nearly every facet of work life. In a detailed look at industries covered 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 applies to just personal lines, which is far from the truth. Commercial carriers have a lot to gain from digitally-enabled servicing, particularly in the SMB market where margins can be thin on a per-policy basis. Commercial carriers may be very amenable to service outreach that includes risk mitigation advice as well.

InsurTech is not just for personal lines, either. A recent SMA study highlighted more than 400 InsurTechs targeting the commercial space, and how carriers themselves are interested in leveraging them for, among other things, "proactive customer servicing."

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

Getting started

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

Terry Buechner is vice president of Digital Consulting at Majesco. This blog post published first at majesco.com, and is reproduced with the company's permission. Opinions expressed here are the writer's own. To reach him, send email to terry.buechner@majesco.com.

Adjusting the customer experience: The digital divide

Rethinking a digital approach to insurance

Special Reports /

5 tips for using technology to boost customer engagement

Related Stories

Recommended For You