Digital disruption in insurance has proceeded full force in recent years, upending the way carriers and agents do business and changing the way customers think about coverage and distribution.

Today, insurers have dozens of digital tools, options and partnerships to choose among. Yet which of these opportunities also helps the insurer fulfill its mission, express its core values and meet its short- and long-term goals within the industry? Aligning values with digital choices is a must for building strong customer relationships and moving the industry forward.

The Age of the Insurance Customer

The COVID-19 pandemic changed the way insurance customers think about insurance, because the health crises impacted how they think about their safety and security more generally. Customers are now interested in embracing protections against the unknown, such as insurance coverage, write EY’s Bernhard Klein Wassink and Fayaz Jaffer.

Since young people bore the brunt of the financial impact of COVID-19 shutdowns, they are more likely to turn toward insurance and other forms of financial protection — and far more likely to do so through technological means.

Already familiar with conducting business online, insurance customers now think of online access as routine. They take for granted that the digital infrastructure exists to support the tasks they need to accomplish. When the option to do business online simply doesn’t exist, it reinforces customers’ belief that the insurance industry is obsolete and out of touch with their needs, writes Chris Ewing, founder and chief strategy officer at payments platform One Inc. This belief undermines customer confidence in insurance as a reliable means of protection.

“Customers’ pace of expected change is accelerating, and insurers must be able to take steps to go beyond the basics of simply digitizing customer tasks,” says Tom Super, head of agency solutions at automotive insurance marketplace Polly.

The rise of on-demand insurance and on-demand services in other industries has further driven customer expectations toward seamless, personalized online service, write researchers Angela Zeier Roschmann, Matthias Erny & Joel Wagner. Artificial intelligence and related tools offer new opportunities for insurers not only to provide on-demand services, but to better understand customer behavior and adapt to specific risk factors — yet these tools remain under-utilized by many carriers.

When an insurer’s ability to provide access doesn’t match customers’ expectations, customers feel more than just frustration. They may feel that the insurer cannot be trusted to provide the protection they consider paramount in the face of global uncertainty.

Aligning Core Values With Technology

Insurance is a traditionally conservative industry when it comes to embracing innovations to business practices. As a result, many insurers took a cautious approach to technology in recent decades, preferring to rely on tried and true means to enact their core values rather than trusting tech to do the job.

Today, winning the loyalty of insurance customers means expressing those steadfast core values through available tech tools. “By investing in the right technologies, insurers can win and retain customers while empowering their agents and brokers to deepen relationships,” says Anirban Bose, CEO at Capgemini Financial Services.

The goal is not to bring technology on board for its own sake, but to realize the values of empowered agents, loyal customers and deeper relationships by employing the right digital tools. Thus, the “right” technology is defined by its ability to help insurers realize their core values. The “right” platform is the one that enhances efforts toward those goals.

One of the top values involved in insurers’ approach to technology is that of digital literacy, aimed at a better understanding of customers and their expectations, write SSA & Company’s John Rodgers, Rajeev Aggarwal, and Brian Nordyke. Insurers that focus their attention on building in-house technological capabilities and partnerships with platform providers and other experienced third parties will maintain an edge over organizations that don’t make a similar commitment to education and implementation.

Another consideration in the quest to align tech choices with core values is unpredictability. Customers are not the only ones feeling the effects of an uncertain world; insurance is also a less stable and predictable business than it once was, as Ellen Walsh and fellow insurance professionals at PwC note.

Clarity on core values, focus on achieving them and discipline in the application of technology to these ends are a must. “Companies that continue to work from three- to five-year timelines that are vague and lack strategic focus are likely to lose market share and perhaps even wind up as someone else’s acquisition,” warn Walsh and the PwC team.

The starting point of shared uncertainty offers an unlikely opportunity. Insurance companies that step into their customers’ shoes can more easily spot ways to meet customer expectations through applying technology in ways that also strengthen the organization’s core values.

What Does Customer-Centric Insurance Tech Look Like?

Driven by digital disruption and competition from insurtech startups, insurance companies have turned toward digital means to fulfill long standing goals. As every industry incorporates digital systems, insurers too find themselves depending on new technologies and data sources to carry out daily business, meet security and privacy requirements and improve their own ability to compete in a rapidly-shifting market, writes Gary Shaw at Deloitte.

For some insurers, technological change can appear to be happening at breakneck speed. Yet from customers’ perspective, insurance technologies can appear to have stalled.

For example, insurance customers have long been aware that they can learn about different types of coverage online, and get a quote through a website or mobile app in many cases. When customers have more specific tasks or questions, however, technology isn’t always keeping up with them, writes Susan J. Wells at Investopedia.

“Today, when customers purchase new policies or make claims, they expect clear communications at every stage of the journey,” writes Ruth Fisk, vice president of industry marketing at customer conversations management platform Smart Communications. A customer-centric platform that aligns with commonly-held insurance industry core values will offer options like:

• Self-service tools for customers to check the status of their coverage, compare policies, make changes and pay bills.
• Automated forms that remember and transfer information automatically, allowing customers to focus on the task rather than retyping their basic information.
• Artificial intelligence and related tools that identify potential coverage needs and recommend related products for appropriate customers.
• Readily-available communication tools like chat functions that connect customers to a knowledgeable agent the moment they seek help.

As these tools boost customer engagement and retention, they support the core value of customer loyalty. As they empower agents to add value to the customer relationship, they support core values related to providing service and deepening knowledge. Intuitive communication tools help insurers, agents and customers stay connected to one another.

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