Robert McIsaac, FLMI, LLIF, Head of Life, Annuities and Benefits Insurance Practice, Aite-Novarica Group
Why are customer experience challenges in insurance unique?
Although the pace of modernization and digital transformation has accelerated in recent years—there is still a gap between expectation and experience whenever a client or advisor comes into contact with a carrier. This happens for several reasons:
Frequency of interactions
Insurance policies are obviously very different than bank accounts or investments. They don’t need daily attention. Which means that the volume of interactions is very low compared to other industries. And yet when a customer does want to review a policy, submit a claim, make any type of change or even a new purchase—they expect to be able to do so easily and more often than not, online.
The challenge for insurers: meeting those expectations has a high cost per transaction.
Speed of interactions
Consumers, of insurance and everything else, want their service requests processed through whatever channel they are most comfortable with. And quickly. The days of holding in a queue, waiting to talk to a service rep at a call center should be long gone, now that it’s possible to use that same mobile device to access a portal and instantly make policy changes.
But the industry still lags behind others.
Today’s insurance customer doesn’t even think about how personalized their online experiences are—they expect all transactions to be tailored to their individual needs.
Is insurance able to make product suggestions to existing clients in the same way that Netflix recommends a movie based on the company’s understanding of your recent viewing habits? Not really.
Has the age of the printed annual report or in person review meeting to update client information long gone? Not entirely.
All of those challenges are hard to address if you have to work through or around a decades old set of insurance policy admin systems.
Why legacy insurance policy administration systems make it hard to solve CX issues
Customer experience challenges in insurance can be hard to solve because most insurance carriers have a multitude of back office systems. For many, they are a mix of legacy policy admin platforms, some of which are older than the millennials they are attempting to attract.
These systems make up a complicated IT landscape that, while functional in many respects, contributes to the issues around modernizing customer experience and exceeding clients’ expectations for digital sales and service interactions.
Legacy insurance policy administration software was not created to service the needs of today’s consumer. When many of them were created, self-service was not a thing…except perhaps at the gas station or at a buffet. Information was delivered. Reports were printed on paper and sent through the mail. Perhaps annually. Monthly at best. There was no expectation of being able to check, let alone change the details of a policy. Advisors submitted applications filled out in pen then mailed—or for the more progressive, transmitted by fax!
The IT architecture of the day was more than up to the task of handling those processes. But older policy admin systems can’t deliver the capabilities needed to create superior, state-of-the-art digital customer experiences. The closed architecture and hard-wired code mean that almost any change or new development requires writing new code. And that’s often COBOL or RPG code-a language no longer taught in schools, and known only to a shrinking number of experienced programmers.
Trying to develop new solutions when working with a legacy policy admin system is expensive and time-consuming—and still may not ultimately be able to get you to your desired result since many legacy systems are unable to support APIs and so can’t do web service calls. They just don’t support digital solutions like advisor and client service portals.
To find out how to overcome legacy system challenges and create world-class CX, download the eBook.