Intelligent decisioning in insurance: The escalating customer experience need

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The coronavirus pandemic has changed many things in many industries – and not always in the most obvious way. Insurance companies have seen both fewer claims and fewer sales. As a result, many have realised that the process of digitisation, often started slowly before lockdown, must now be accelerated. More, it needs to deepen beyond automation to look at core processes. 

Why does this matter? Fundamentally, because the pandemic has changed things for insurance customers. Lockdown brought a reevaluation of priorities and a new approach to risk. The economic downturn that is likely to follow will also affect people’s lives, livelihoods and decisions. Purchasing will be more careful, and perceptions of risk will change again.

Insurance companies need to respond to this. When customers are not buying expensive products, they have less need to purchase insurance. However, they still want their existing goods to be protected. When times are hard, relationships with insurers become more important because perceptions of potential loss are higher in people’s minds. Insurance companies that understand this – and provide best-in-class customer communication and response – will prosper. 

Challenges and opportunities

The current situation represents both a challenge and an opportunity for insurers. We know from previous experience that insurance sales can increase, even in an economic downturn, if insurers act appropriately. For example, after the 2008 financial crash, returns to shareholders were up to three times higher in companies that led on customer experience. 

Innovating to improve the customer experience is therefore vitally important. However, companies face significant challenges in doing so. Insurers need to be able to understand how their customers behave online. They also need to use real-time and historical information to create customer journeys so that they can respond and communicate appropriately. This means harnessing existing data and making it work for the company. These functions must also fit within existing systems because, most importantly, companies need to be able to do this without making large investments with uncertain outcomes. 

Surveys of insurance CEOs show a recognition that innovation around the customer experience is essential. However, they also suggest that CEOs are concerned about how to use new technology, and about getting the balance right between technology and people. CEOs are clear that more automation does not necessarily equate to better customer experience, but that it can be part of the answer.

The question is: How can we turn clever applications into better customer experience through innovation around core processes in insurance? 

Getting the right balance

There are three core components to this process. The first is data, which is needed to generate insights. Many insurance companies are turning to external data providers to enrich their data. However, in my experience, internal data also has plenty of potential. The second component is analytics: a way to create information from data, and then generate insights. 

The third component is also crucial. The insights generated must be used by the right people at the right time. In other words, the intelligence must be used to drive action within business operations, among those handling sales, through to claims, complaints and renewals. Done right, this will create value for customers – which is, after all, the aim. This value may be created at any point through the customer journey and insurance value chain. Actions taken from the first point of contact through to claim and settlement, or renewal, all affect the customer experience. Making the right decisions at each point – the right price or discount to offer, the right additional services to suggest, the right response to the claim – all add up and affect renewal decisions and customer loyalty. 

What’s more, the same systems can and should be used across all business lines and channels to create a truly omnichannel approach. However, they don’t have to be rolled out in every business line at once. Insurance companies around the world are seeing the benefit of starting small, with one project in one area – for example, sales or claims – and then rolling out the experience more widely. This accelerates the speed of implementation in second and subsequent areas because of the learning.

A focus on value

Crises like the coronavirus pandemic tend to expose the problem areas in any industry. However, they are also very good at driving the necessary change. In insurance, there is now growing recognition that the way to create customer value is to focus on digital experience – and there is also real appetite for change.

If you would like to know more about the impact of the pandemic on the insurance industry, register for the Beyond Tomorrow conference on November 24 and join the Insurance Talks.

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Alena Tsishchanka

Insurance Practice Leader SEMEA at SAS

Alena Tsishchanka is an Insurance Practice Leader for SAS in EMEA. She works with customers and partners to analyze business processes, understand trends and issues and introduce innovative business analytics solutions. In particular, Alena provides functional and technical advice on how analytics applications could deliver real business value to customers in the insurance industry. One of her key goals is to create mutually beneficial customer connections and to establish collaborations across geographies.

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