Published 21. Jun. 2017

Insurers are Exploring the Era of Engagement with their Customers

Insurance is one of the original customer service-centric industries. It is an industry that serves people – especially in their hour of need. While it has roots in antiquity, modern insurance arose four hundred years ago with maritime insurance helping to support and develop global trade.

From that time, the industry has grown to be vastly larger and more integrated into our lives. Every year, insurers facilitate the smooth running of society, setting aside two trillion dollars against adversity and, as a result, hundreds of millions of people can drive a car, buy a home, hire employees, operate businesses, and pursue their business and personal goals in security. However, despite having a strong social purpose to help people reduce and manage risk, insurance has had to address shortcomings in customer service in recent years.

A great number of these deficiencies have stemmed from how insurers have allowed manual processes to persist for too long and found it difficult to provide customer-facing staff with the right information and tools to serve customers effectively. Consequently, insurers sometimes have been unresponsive to customers and their needs; delivering a service experience that could be time-consuming, poor value for money, and of an inadequate standard.
To the industry’s credit, these issues have been addressed substantially over the last ten or more years. Insurers have completed much, if not all, of the journey of automating and streamlining the transactions involved with selling a policy or processing and paying a claim. In the last couple of years, the focus has been on improving the processes experienced by customers when they interact with the insurer over multiple channels from face to face, phone and online, through mobile or computers. Service agents, increasingly, have a better understanding of the customer, their claims and specific requirements; and customers, increasingly, are given the choice – and the benefits – of managing their insurance affairs for themselves.

So, what is the next stage in the evolution of customer service for insurers? The focus now is on engagement, and this takes its inspiration from how digital brands, like Amazon and Apple, are setting a new higher bar for what customer service excellence means.

As Amazon’s Jeff Bezos explains it, customer excellence is about continual improvement in the quality of experience: “We see customers as invited guests to a party and we are the hosts. It’s our job every day to make every important aspect of customer service a little bit better.” Engagement also is about getting closer to customers. What Apple’s Steve Jobs once said resonates strongly for how insurers need to transform customer service: “Get closer than ever
to your customers. So close that you tell them what they need well before they realise themselves.”

For insurers, this does mean modifying the relationship. Traditionally, an insurer has interacted with a customer relatively rarely – when they buy or renew a policy; and when they make a claim. This stop-start, fragmented relationship is no longer enough if insurers are to maintain and build on customer loyalty. The model now is one of having an ongoing relationship with customers, keeping them closer,
intimately understanding and responding to their needs, and foreseeing and reducing the risks they face. Closer engagement with customers depends absolutely on having the right digital and omnichannel strategies. Key to this is having a software platform that unifies core operations, data and digital, and can drive the digital engagement across the general insurance lifecycle. New customer behaviours are one of the key factors driving the digitisation of insurance.

Insurers need to accommodate interactions with digital channels, like web, mobile and social. More importantly, they need access to new core processing platforms that can deliver the more innovative products and smarter immediacy that their customers want.
Customer-centric insurance products include more on-demand insurance that makes it easier to insure exactly what is valuable to the customer; more powerful self-service claims processes; peer to peer insurance that rewards small groups of people for no claims; and digitally-native distribution of insurance that uses social media to help find the right insurance for a customer. Designing systems for engagement based on seamlessly linking core operations and digital should have profound benefits for everyone. For customers, engagement means minimal data entry to buy a policy, simple access to payments and straightforward claims processing that does not require extra form filling. For insurance employees, there is a true 360-degree view of a customer’s account, a dashboard that shows clear guidance on work in progress and status, and streamlined collaboration with other vendors like loss adjusters, and repair and replacement services. Plus, to Jobs’ point, there is the potential for embedded predictive
analytics, using artificial intelligence and machine learning, to augment staff capability in risk scoring or spotting fraudulent activity sooner; so, avoiding additional increases in the premiums of legitimate customers.

About two years ago, the insurance industry entered this Era of Engagement, and insurers are now transforming themselves into stronger, customer-centric businesses at a time of rapid change. The criticality of digital to make insurers more relevant to customers cannot be over-estimated. Of course, customer service experience excellence is more than just about machines but, when done correctly, digital will enable insurers to get closer and be more valuable to their customers; and therefore, to be the engine for their growth, and advance their historic social purpose, to protect and serve.

Guidewire Software will be attending IndustryForum Insurance in Germany on the 19th of September 2017. For all our upcoming events, visit the Event Calendar »
by Rene Schoenauer, Product Marketing Manager, EMEA, Guidewire Software