Jim Dwane, Chief Revenue Officer, bolt

Great customer experiences increase customer retention, encourage higher levels of customer satisfaction and ultimately drive revenue growth. This is the fundamental lesson that digital businesses have taught us.

Across most industries, businesses have begun to orient their processes around customer experiences. Consequently, customers have grown accustomed to being the center of business strategies.

For insurers, creating a seamless customer experience means removing friction from the buyer’s journey.

The Evolution of Customer Expectations

For anyone who does any of their shopping online, a clunky shopping experience will drive them away. This applies to everything from shopping for consumer goods to browsing homeowners insurance products.

“The [insurance] customer has evolved, and much of that has been born through how they’re engaging with their other service providers outside of the insurance sector,” says Jeffery Williams, a senior analyst at Forrester.

What are those other service providers doing? Removing friction from the customer experience.

That evolution has compelled a paradigm shift in insurance. “Insurance has moved away from being a product that is sold to one that is bought, and the right [customer experience] drives that purchasing decision,” IBM’s Christian Bieck, Yoann Michaux and Matthew Stremel write.

“Today, customers compare and contrast all manner of service providers, and insurers are increasingly seen through the lens of an informed consumer whose last great experience may have been with an online retailer. Insurers are now being compared against the best CX from other industries—not just other insurers.”

Shorter, Simpler Customer Journeys

As an industry, insurance has inherited some conservative processes.

Take underwriting. For generations, underwriting meant soliciting as much information as possible from a customer to get an accurate calculation of risk. This process is a bad fit for digital customer journeys, however. The inclination, when you're designing an underwriting process, is to get as precise pricing as you possibly can. The mantra used to be the more questions, the better.

In a digital customer journey, the more questions you ask someone, the more friction you create on the path to conversion.

This is where application pre-fill capabilities come in. Automating that data collection on behalf of a customer improves the customer experience, removes the friction from the quote-to-issuance process, and ultimately drives conversions and business growth.

Any insurance company — whether an insurtech, an agency or a carrier — can do three things to simplify their customer journeys. Those include:

• Minimize customer input. Eliminate extemporaneous questions that don’t actually inform the underwriting process.
• Buy third-party pre-fill data. You don’t need to solicit, say, data on the value of a home from a homeowners insurance applicant. That data has already been aggregated and been made available from third parties.
• Predict pre-fill data with machine learning or artificial intelligence. Predictive tools draw from massive databases of other people’s answers to similar questions. Those become questions you don’t need to ask someone to answer. People only need to validate the answers.

Together, these tools are helping insurance companies create shorter, more pleasant customer experiences that then drive conversions. It's actually a really exciting time: Carriers today can provide insurance quotes sometimes with as few as three or four questions.

With that kind of speed and ease of application, those carriers remove substantial points of friction from their customer journeys. And that is one big key to unlocking customer growth and new revenue opportunities.

This gets back to the business case of better customer experiences. Benedict Clark at customer experience platform company Acquire cites one recent survey that found insurance customers were 20 percent more likely to purchase a policy from a company whose underwriting and application process took place in near-real time.

In other words, faster application times meant higher rates of conversion. Further, better customer experiences encourage customer loyalty.

The lesson for all of us is clear, then: People will continue to do business with insurers who make it easy to do business with them.

Images by: Luiza Braun, Scott Graham