Customer expectations are driving insurance evolution
The life insurance industry is pre-occupied with three big topics: client expectations, digital transformation and data. Usually they’re discussed as separate opportunities. It turns out that they are really three facets of the same gem—the inextricably interrelated drivers of innovation and growth in our industry.
Everybody from banks to bistros are taking note of the experiences consumers have when they enjoy their latest recommendation from Netflix, or one-click their way to a great summer read on Amazon. And they seek to apply the same principles to their own interactions with consumers.
Companies are racing to provide hyper-personalized service. They’re finding ways to do it across all channels, from mobile to online to in person where necessary. And it’s happening faster than ever before. The insurance industry faces unique challenges when it comes to creating its own brand of superior client engagement.
How to transition from advisor-driven engagement
Traditionally most engagement has happened through the advisor-client relationship. Advisors created the customer experience through their marketing, sales and on-going review processes. While this is still true in many cases, the emergence of direct-to-consumer digital offerings has caused carriers to rethink how they can build engagement directly over the long lifespan of a policy.
The problem of interaction scarcity
Part of the issue is that Life insurance doesn’t require much attention from the customer. A customer’s attitude towards their policy is very different from a banking or investment relationship, where clients need to check the status of their checking account or portfolio on a daily basis.
And that creates a further challenge for insurers:
- How do you create engagement with clients when the number of interactions is so low?
- How do you create engagement when there are so few opportunities to build trust or enhance the reputation?
- And when, no matter how often they interact with you, customers expect each instance to be world-class?
Deeper connection comes from more frequent and higher-value interaction
Some carriers have attempted to increase the number of interactions and maintain connection over the lifespan of a policy by rethinking what clients would be interested in.
They’d pivoted from the traditional morbidity and mortality framing of insurance to a focus on health and wellness. Programs that engage clients in improving their health, provide added-value and frequent opportunities to connect. That approach has created some increases in engagement, but the real change is likely to come from more granular marketing that is systematized and nurtures client relationships.
This bespoke communication and relationship building requires deep understanding of client personas and customer journeys. It aligns communications to customer needs and situations, creating personalized experiences and services that add consistent value to clients over the entire policy life cycle.
High-value interactions like this are only possible when insurers have access to the vast volumes of data housed in their systems.
All client engagement is data driven
Without data and their ability to manipulate it, Netflix and Amazon wouldn’t be able to pull off the customer engineering they do. Without data, insurers will never be able to cross the engagement gap and catch up to customer expectations created by other verticals.
Although carriers have a massive strategic asset in the form of countless millions of customer data points stored over several generations, that data often resides in legacy policy admin systems that are just as old.
These systems handicap a carrier’s ability to easily access and leverage their data because they lack API capabilities to connect with the modern tools that require that data.
Solving the client engagement data gap
There is no pre-approved, specific client engagement roadmap that works for every company—the variables, from product to region to demographics, are too diverse. But there is a process for planning digital transformation that will enhance engagement that works no matter what your size and situation.
Step 1. Identify your client engagement goals and strategies
This is the starting point in developing an effective client relationship strategy that matches your business needs. The goals will be different for every company since your engagement needs will vary. For some, relatively straight-forward automation of key processes to speed approvals and service will generate the increased customer satisfaction they seek.
Others may have more a more advanced vision for total engagement. They may pivot to a customer-driven focus and create engagement models that revamp all operations. They will need to overhaul product development in the coming years. Customer understanding and marketing will be transformed into data-driven, highly personalized activities that take into account the full holistic view of the client.
Step 2. Understand your current IT capabilities in the context of your engagement plan
Once your organization’s client engagement goals and strategies are defined, the next step is to audit your current IT infrastructure to determine the degree to which it can support your intended activities.
Examine your technology landscape from end-to-end, and consider:
- Do your policy admin systems enable rapid product adaptation that will enable you to meet evolving client needs?
- Do they support API connections to sales and service front-end tools?
- Do your illustration, eApplication and portal solutions support the superior CX you desire?
- How accessible is your client data?
Step 3. Define your accelerated digital engagement IT roadmap
Comparing the assessment of your current IT capabilities vs the needs laid out in step 1 will reveal the gaps you must close. The next step is to define your plan for closing the IT gaps. Key questions to consider include:
- What needs to happen to your policy administration environment in order to support rapid product innovation that better meets client needs?
- Can legacy policy admin systems be replaced (in a resource efficient manner)?
- If not, could they/should they be upgraded?
- What is your strategy for dealing with the data resident in those systems (integration, migration, etc.)?
- Does it make sense to outsource certain blocks of business (TPA, IPO)?
- How can you leverage partner solutions to accelerate modernization?
- How can you integrate/API enable your sales tools to create more streamlined policy onboarding?
- What steps need to be taken to improve your claims process?
- How will you upgrade your agent and client portals to support world-class service on-demand?
- What is your overall plan, including data integration, for how you will implement all the modernization changes required to meet your client engagement goals?
Putting it all together
Superior client engagement requires more than just a cosmetic upgrade to legacy IT. It requires a deep understanding of the expectations and frustrations current clients have. With these in mind, organizations should step back and define their goals for enhancing client engagement.
Those companies who create actionable plans for targeted modernization that will enable them to reach their engagement goals will gain significant competitive edge in the market in the years to come.