The first article in our series of InsurTech insights looked at the current state of InsurTech and suggested that incumbents and start-ups work together to drive innovation.
In this article, we’re going to delve a little further into that subject from the slightly different perspective of customer engagement. What do incumbents and Insurtech start-ups need to truly deliver innovative solutions?
Hit the road, Jack
Purchasing insurance used to be something that you just “had to do”. A lot of people will argue it still is – and from a customer perspective, I’d be inclined to agree. It’s certainly true for motor insurance!
Many customers see insurance (of all types) as an imposition/an obligation/a sneaky tax (delete as appropriate!) to line the pockets of governments and large corporations. Only a small percentage see the true value in insurance. For those who have ever had a need to claim, it becomes invaluable.
We, as an industry, need to understand and accept this fact when considering how insurance journeys are changing. Only by focusing on the end user can we use technology to deliver innovation.
Until relatively recently, the insurance purchase journey was reminiscent of an old desert highway – buy your insurance, auto renew with limited (if any) communication from your insurer and claiming/lapsing/cancelling through lack of need was the end of the road.
And this still happens, a lot. Many incumbents have huge books of life insurance business who they haven’t contacted for years. I’ve been in meetings with “Head of Strategy” people looking to improve the value of their back books who have actually said, “We don’t want to contact them in case they cancel”! Shocking – but I bet it sounds familiar to a lot of you.
Are you giving me attitude?
Is it any wonder that customers view the insurance industry with cynicism? They’re told they need to buy it, hear very little from the company they’ve bought it from, find it hard to contact them when they need to, worry that their cover might contain an exclusion that allows the insurer to “get out” of paying a claim and, generally, don’t engage with insurance brands the way they do with other brands.
I happen to know of someone who has held car insurance with the same company for nearly 60 years who gets one letter a year with new premium information and lets it renew because this driver doesn’t happen to have a licence (licences weren’t a thing when the first policy was taken out). And that’s with a global insurer – how poor must their KYC processes be? And how can they even start to engage customers when they don’t know basic information about them?
With the type of attitude displayed by the “Head of Strategy” mentioned above, its no surprise that the insurance industry lags behind everything else. We need innovation, and we need it now.
Do you deliver?
Incumbents have traditionally looked at customer engagement in a very siloed fashion – digital marketing boomed a decade ago, so CEOs demanded that their insurance brands became visible on social media. Social media marketing teams were set up. With no thought as to how this channel would interact with offline or other digital channels. Or how customers could shift their journeys between channels in a hassle-free way. But they had a social media team(!)
I’m continuously amazed at how many huge, global insurers still conduct business this way. They latch onto the flavour of the month, throw money at it with little regard to a coherent, customer driven strategy – and then ask why it isn’t working 2 years and millions of marketing pounds/dollars later.
How many of us, as insurance customers, can say we engage with our (multiple) insurer brand(s)? Why don’t we engage in the way we do with other brands?
Insurers don’t seem capable of getting this one right at all. They have more information on customers than arguably any other industry and yet still can’t find the right time, right channel and the right message to engage customers. It’s not difficult to know when a customer will be interested in, say, life cover – buying a house or having a child – but most of them still guess at when to contact customers going through these life events. Capture data in the right way, at the right time and this should be easy. Using InsurTech to do this – from data analytics to AI to engagement platforms – is simple – why aren’t more incumbents deploying this technology?
If I want to buy something from Amazon it’s SIMPLE. I’ve bought before, one click buy, prime membership and it’s at my door the following day. If I want to buy something from an insurer, from whom I’ve previously purchased, is it that simple? At best, I have to re-confirm all relevant information but, much more likely, I have to re-enter all of that information. Surely InsurTech has a solution to this.
Auto renewals were made easier several years ago but done in such a covert way that specific regulation had to be introduced to control how insurers presented this to customers. There’s a long way to go for the insurance industry to build trust with the customer. Perhaps using InsurTech to provide more transparency around pricing and product information would be the first step in the right direction?
Similar to relevancy but at a more granular level. My forename initial is “S” and, for one insurer, I’ve been “Mrs.” Instead of Mr. S” for about 10 years. I’ve also never owned a pet (or displayed any behaviour that might indicate I own a pet, I think!) – so stop offering me pet insurance every time I visit your online portal. Again, it’s not difficult to get this stuff right so why do so many insurers struggle with it – and can InsurTech be used to eradicate these mistakes?
What do customers want?
The first element to this must be getting the basics right – what we like to call the hygiene factors. If an insurer can’t do what’s expected of them, then they can’t expect customers to engage just because they provide some sort of tool that they think is relevant to the customer. Imagine, as a customer, downloading an insurer app which has a dashcam and telematics but won’t provide you with product information or let you buy a new product. This is a common blunder for many multibillion-dollar global insurers. Sure, engagement tools are an important part of a fully rounded ecosystem, but they shouldn’t be viewed as standalone solutions to a much bigger problem.
But it doesn’t need to be – ManageMy’s platform solves many of the questions that insurers and customers alike are asking. Get in touch today to find out more.