A global pandemic. Business liability. Worker shortages. Wildfires. Hurricanes.

Insurance customers today face a number of difficult challenges. While these customers may be experts on the workings of their homes and businesses, they are not typically experts in insurance. For that expertise, they turn to insurers, agents and brokers. An era of crises demands quick connection between customers and insurance experts.

Online and phone support services are then critical for insurers to have available. Customers won’t know which communication channels are available until they’re in the middle of difficulties. Insurers who provide multiple channels of communication and easy ways for customers to reach human experts are more likely to be there when customers need them most.

Many Customers Face Multiple Crises

Moments of hardship don’t generally come in isolation. Rather, difficulties in one area can often set off difficulties in others.

Such is the case for many insurance customers, who are dealing with an ongoing pandemic, the economic effects of that pandemic and an increase in climate-related environmental threats. For these customers, being able to reach their insurer easily is a must.

COVID-19

The COVID-19 pandemic was an immediate, global crisis when it shut down schools and businesses in March 2020, and it remains an ongoing concern in customers’ personal and professional lives.

Early attempts to address property and casualty insurance concerns during the pandemic included measures to address the sudden change in driving habits, a result of workplace and school closures. People were not driving regularly and some started using their vehicles for different purposes. In Oregon, for example, the Department of Consumer and Business Services “encouraged insurers to extend coverage for personal delivery drivers and to limit the application of commercial delivery exclusions during the COVID-19 outbreak,” according to an April 2020 bulletin.

For existing insurance customers, assistance from insurance companies helped in the early months of the pandemic. Yet those seeking new coverage or who wanted to switch insurers often had questions that weren’t easily answered. New customers, for example, might wonder how the pandemic affected their coverage needs or how to address any upcoming changes in those needs, such as a return to work outside the home or an increase in daily driving.

Such questions are consistent with an increased trend in customer demand for more personalized coverage. One Accenture study found that 88 percent of responding insurance customers wanted more personalized insurance products, writes Sandeep Challa at PolicyAdvice. “Consumers are now used to getting customized solutions and the auto insurance industry is no exception to this trend,” he adds.

The pandemic only underscored the need for personalized coverage for many customers. What sort of coverage was necessary, for instance, if a customer’s car was garaged for several months due to a shutdown order, or if the customer’s home was now also their workplace? For insurers, meeting personalized needs meant being able to answer personalized questions efficiently and effectively.

Economic Upheaval

In 2021, businesses have reopened but the COVID-19 pandemic has not disappeared. Consequently, many businesses are reopening in the face of new and uncertain questions about coverage and liability, for which insurance customers need clear and immediate answers.

In the early months of the pandemic, many questions arose as to whether, how and to what extent business interruption, general liability coverage or other forms of insurance applied to issues caused by the pandemic and related shutdown orders. Nearly two years later, early fears have given way to cautious optimism for new business ventures, but new and often complex questions about insurance coverage remain.

“Small business activity, while recently disrupted, is still alive and well with business ventures often creating a messy blur between personal and commercial activities, assets and risks,” write EY researchers Thomas Cranley, Avril Castagnetta and Bernhard Klein Wassink. This “messy blur” often leads to questions from customers about their coverage needs. It can also lead to areas in which customers may not realize they need to ask a question or obtain relevant coverage unless an expert spots the problem and raises the issue.

Economic difficulties can interfere with customers’ ability to find or purchase the coverage they or their business need, as well.

“Another slowdown of the economy, after the contraction of GDP in the first half of 2020, is likely to disrupt the purchase of insurance policies and premium volume, at least for some lines of business,” notes the Organisation for Economic Co-operation and Development in its 2020 Global Insurance Market Trends report. Customers affected by economic downturns will need additional information to understand the coverage they need and the best ways to obtain it affordably.

Extreme Weather Events

Extreme weather events and the losses they cause are increasing. Since 1980, the U.S. has experienced 308 weather and climate events that each caused $1 billion or more in damage. What’s concerning is that 18 of those events happened in the first three quarters of 2021 alone. While the 40-year annual average of billion-dollar loss events due to weather is 7.1 events per year, the annual average from 2016 to 2020 is 16.2 events per year, according to data from the National Oceanic and Atmospheric Administration.

These changes are gradual, making them difficult for insurance customers to apprehend. Insurance customers that do understand the increasing risk of extreme weather events may not have the data or tools available to calculate how these global changes might affect their individual home or business.

Instead, when many insurance customers think about insurance and extreme weather events, they think about claims: How will I reach my insurer if a loss occurs?

Fewer customers think about obtaining the right kind of coverage for various weather events. Attention to detail at the purchasing stage is a must for customers to ensure they have the coverage they need if an extreme weather event happens.

Insurance customers are showing an increased interest in coverage that also supports their safety and well-being, especially if they are younger. An Accenture study found that insurance customers ages 18-34 were more interested in “digital offerings that help them make safer, healthier, and more sustainable choices” compared to older customers, write Accenture’s Kenneth Saldanha and Todd Staehle.

Insurance customers at any age can benefit from advice that helps them understand how insurance coverage supports their safety and well-being, particularly in an era of extreme weather events and other climate-related concerns.

Regardless of the type of crisis, customers want personalized advice from people whose expertise in insurance they can trust. Thus, “insurers have an opportunity to convert digital traffic to sales by focusing on a hyper-personalized virtual experience,” says Anirban Bose, CEO of Capgemini’s financial services group.

How Do Customers Reach Insurers?

Customers are increasingly comfortable with digital platforms, reachable through websites and mobile apps, for conducting business.

Customers’ familiarity with digital channels hasn’t lessened their interest in human interaction, however. While customers often like the ease of access digital channels offer, they prefer to rely on human agents and experts when buying complex coverage or researching answers to coverage questions, writes Capgemini executive vice president, global insurance industry leader Seth Rachlin.

“More than 60 per cent of customers (both personal and commercial lines) said direct channels (human staff, call centers) offer convenient access,” Rachlin writes.

Customers have adapted to a world in which business of all kinds is increasingly conducted online. This adaptation embraces technology as another way to reach insurers, not as a replacement for human connection. As new and unexpected crises continue to affect individual lives and businesses, customers are likely to continue seeking advice and support from experienced agents and carriers.

Fortunately, insurance companies have several opportunities to deploy technology in the service of building these relationships. “All the participants in the insurance distribution area enjoy many options. Thus, it comes down to selecting the channel mix that best aligns to business strategies and customer segments,” writes Mark Breading, a partner at Strategy Meets Action. Often, a combination of new digital tools and tried and true methods for building customer relationships provides the best results.

Connecting Customers to Human Support

Recent crises, including the pandemic and its aftereffects as well as unusual weather events, have driven customer demand for high-quality communication and support from insurers. These events have also underscored for insurers the need to build these human connections in order to maintain business and provide the proper coverage to insureds.

Rachlin writes that insurance customers now have three top expectations for insurance distribution: convenience, personalized advice, and accessibility. All three can be enhanced by technology, but technology alone cannot meet customers’ needs or expectations for any of the three. Rather, technology must be used to support and supplement human interactions between customers and agents in order to meet convenience, personalized advice and accessibility goals.

To meet customers’ needs and build relationships, Erwin Dirnberger and fellow researchers at BCG recommend what they call “bionic operations.”

The bionic operations model shies away from employing technology simply for issues like automating high-volume tasks or finding new ways to talk to customers. Instead, the bionic approach “supports agents dynamically in real time” with fully integrated use of AI, APIs and similar tools to allow technology to shoulder key tasks, Dirnberger, et al. explain.

The result is an insurance agent whose mental energies are freed from the data-tracking or administrative tasks that once occupied much of an agent’s attention. Instead, the agent can focus entirely on the customer and their specific needs. Agents can thus provide optimal value for customers and improve business for their own agencies and for carriers.

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