Great customer experience: The paradigm shift that the insurance industry needs


The first instances of the practice of distributing or transferring risk can be traced back to as far as the 3rd millennia BC. That is how well entrenched the insurance industry is in tradition. The methods of how insurance is practiced have changed over the years, but it is a highly regulated and reluctant adopter of new technologies. Customers still have to go through the drudgery of manually filling out lengthy forms and navigating multiple bureaucratic layers to process a claim or enrol for new insurance products.

As complicated as it may seem, insurance is and always will be driven by the demands of its users. The difference between great and mediocre customer service can be quite evident, especially when the ramifications of sub-standard customer service gets magnified through the reach of social media. A simple oversight during the claims process or wrong information obtained from a customer can turn into a full-blown crisis for the brand.

Insurance companies need to understand that robust customer experience is not just about avoiding customer service issues. It is about differentiating themselves in a highly competitive and crowded market by providing a superior and personalized customer experience. Customers are highly informed today about pricing, insurance coverage, and services due to the abundance of information available through different online channels. So, insurance companies must understand that superior customer experience is one of the few ways left to uniquely position themselves and drive profitable growth.

360° view of the customer journey

To understand exactly what customers need and value is easier said than done. The evaluation of customer satisfaction and converting it into actionable performance enhancements calls for in-depth customer insights, sound analytics, crafting of the most essential customer journeys, and end-to-end process management. Typically, insurance carriers provide customer experiences through different functions and methodologies. Each of them are managed by different types of personnel and have specific goals and metrics. For example, in the event of an incident, claims adjuster investigates the claim whereas claims examiner reviews the report filed by the adjuster and authorizes payments for the claim. However, for customers, the entirety of the insurance experience is perceived as a single journey, which leads to frustrating experiences especially during complex claims processing.

Insurers must apply a comprehensive approach to customer journeys; only then will they be able to implement noticeable and continuous improvements. They first need to establish a customer-centric vision for their business with transparent and achievable objectives. Next, insurers need to generate customer insights and based on those insights, associate customer satisfaction with operational-level KPIs and business impact.

Insurers have to then entirely reinvent their customer journeys by using digital information as the benchmark. Finally, insurers have to understand that their customers form the crux of their business and their organizations have to build that into their culture and processes, across the board. All of the above mentioned factors work in tandem and cannot be successful without the other.

Creating the right customer connect through technology

Insuretech is a fairly new term and refers to the technologies and platforms that can be leveraged to disrupt traditional insurance business models. It can also be termed as any insurance company that provides insurance products and services through the involvement of technology in a user-centric manner.

A plethora of digital-driven products and services, such as usage-based insurance and peer-to-peer insurance, have been introduced in the insurance market. Insuretech has infiltrated almost every facet of insurance, right from customer service, underwriting, claims processing, to marketing and distribution. Here are some of the technologies that are currently helping insurers to understand their customers and connect with them better:

Artificial Intelligence (AI): AI helps insurers to gain a comprehensive view of the customer lifecycle data, capitalize on new opportunities in a disruptive marketplace, and make well-rounded decisions in their product and service offerings. The ability of AI to make sense of vast, unstructured data is immense. For example, visual recognition technology can be used to help claim adjusters in the identification, estimation, and compensation of damages. AI-based systems can also aid actuaries and underwriters to determine new and changed risks, enhance pricing accuracy, and develop new products and services. One such example is the Lemonade insurance company. It leverages AI and behavioral economics to offer insurance policies to homeowners and renters. Their claims are automatically processed through AI-assisted anti-fraud algorithms, based on which claims are instantly approved. Their AI system allows them to accurately capture fraudulent claims for further analysis.

Natural Language Processing (NLP):
NLP, a subfield of AI, equips software systems with the ability to read, understand, and obtain meaning from human languages. By leveraging NLP, insurers can provide personalized customer experiences and obtain much needed insights from a number of customer interactions. For example, NLP can be used to extract vital information from unstructured text data to improve claims processing, automate the customer onboarding process, help customers choose insurance policies, shift payments dates, and automatically get insurance quotes through chatbot software, and much more. A real-time example is LeO, a virtual insurance agent/conversational bot. It helps in the automation of administrative tasks, such as scheduling calls and meetings, customer retention, and lead generation by answering queries, 24/7. With the help of LeO, insurers can provide personalized quotes for home and auto insurance in a matter of seconds. LeO can also send payment reminders, policy renewals, push promotions, and much more.

Cognitive Robotic Process Automation (RPA): RPA is a type of automation technology that manages high-volume, repetitive business processes. A combination of RPA with AI technologies like OCR (Optical Character Recognition) and NLP evokes perceptual capabilities and can handle complex processes, which previously required human intervention. The insurance industry is a prime candidate for the implementation of cognitive RPA, as it is heavily dependent on document-driven business processes, which also requires human judgement. At first, RPA was used for processes that were dependent on manual data entry, data retrieval, and data gathering/collection. Now, it is used for more complex processes. For example, RPA is used along with OCR to scan complex documents that are in different formats, use different fonts, and are in different languages, and then convert data into digital formats. Cognitive RPA can also be integrated with chatbots, where RPA bots also process requests from chatbots by ploughing deep into company data, processing the data, and providing the right information to the chatbot.

Internet of Things (IoT): IoT refers to the billions of devices that are connected to the internet through sensors, which collect and share data. IoT has become an integral part of our lives, without any of us even realizing it. It helps insurers to measure risk more precisely by providing real-world and personalized customer information through devices, such as wearables or sensors embedded in cars and houses. It can also help insurers alert policy holders of certain events, such as a leaking pipe in their home or an impending storm, thus mitigating risk, resulting in fewer claims, and increased customer satisfaction. Metromile, a car insurance startup, offers pay-per-mile car insurance and charges a fixed monthly rate and a charge-per-mile. It uses a device called Metromile plus that connects to the insured car’s OBD-11 port. The device is paired with Metromile’s app and the insurer gets the mileage data from the app.

Customer-centricity is the way forward

According to a Gartner survey, 81% of companies consider customer experience to be the key differentiator in the competition for market supremacy. The proliferation of data generated through devices, mobile networks, and social networks have enabled customers to conduct in-depth product research, compare prices, and buy products instantaneously. They have come to expect the same kind of instinctive and slick user experience, found on mobile apps, search engines, and online retailers, from insurers.

It is imperative for insurance companies to realign their business models and strategies to leverage the various digital opportunities and be in constant touch with customer perspectives. A tech-driven customer experience in insurance will not only lead to higher customer satisfaction, but also increase customer loyalty, lower costs, and improve operational efficiency.

To find out how customer experience can be a game changer in the insurance industry, download our report here.


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