Digital Customer Experience Innovation is an Insurer’s Insurance Against Irrelevance
Why has customer experience (CX) fast become an imperative for insurers? An application of any strategic business model will make it obvious. For example, here are two elements of Porter’s five forces model as they apply to P&C insurance.
Bargaining power of buyers: Information asymmetry and bargaining power, traditionally an advantage for carriers, have shifted to consumers, accelerated by online sources such as price comparison and competitive review sites, forums, and social networks. There are virtually no barriers to switching with alternatives just a click or a swipe (pun intended) away.
Threat of substitutes and new entrants: 75% of consumers think that there is no significant difference among products offered by insurers (Accenture). Traditional carriers face threats from adjacent industries such as banking and financial services as well as digital upstarts. In the health insurance sector, insurers may face new competition from out-of-state carriers as regulations evolve.
You could apply the other elements of the Porter model to P&C, life, and health insurance, and come to the no-brainer conclusion that CX innovation is a business imperative, not a luxury, for insurers.
State of Insurance CX
With 80% of insurance shoppers touching a digital channel during their purchase journey, the CX imperative has now become the DX imperative (McKinsey).
However, only 14% of carriers think they provide differentiated DX (Accenture).
Customers live, breathe, and stay digital, insisting that digital self-service get smarter and agent-assisted service be knowledgeable and consistent, yet a vast majority (79%) say that insurance companies are unable to deliver on these requirements. In a survey conducted by Forrester Consulting on behalf of eGain, customers complained about these CX pain points:
- Different agents give different answers for the same question: 41%
- Agents are not knowledgeable: 25%
- Can’t find answers on company websites: 33%
- Other: 21%
Consumers are also omnichannel, expecting to be seamlessly transitioned to non-digital channels for escalations and exceptions. Insurance DX strategy should also include such an omnichannel capability.
However, there is a disconnect in context and content across digital, call center, and field touchpoints.
- Most P&C customers use a mix of digital and offline channels. (Bain, 2019)
- 2/3 of life, and 3/5 of P&C carriers do not offer omnichannel transactions where a customer can start a transaction in one channel and complete it in another without losing continuity.
Moreover, 60% of life carriers and 40% of P&C carriers have not integrated their systems with those of distribution partners (Source: Bain).
eGain has worked with P&C, life, and health insurance leaders for over a decade, and compiled innovations and best practices over time. Here are a few.
Digital customers like to stay digital, or be “contained” digitally. This is a win-win for the business since digital interactions help carriers control service costs while giving customers what they want. A US insurance giant that also offers diversified financial services products has used DX to increase member onboarding by 200%! The carrier uses our secure cobrowse technology to help customers fill out online forms while talking to them on the phone at the same time. It has also set rules that define what fields the agents and the customers can see and what actions they can take, through the fine-grained control capabilities in the solution. For example, sensitive customer information such as social security or credit card numbers can be masked from agent view, and agents might be prohibited from completing a customer transaction (e.g., submittal of a form or purchase of a product).
A health insurance payer cobrowsed with consumers on health insurance exchanges, walking them through various plan options, helping to select a plan and enroll in it.
A leading diversified insurance and financial services firm uses eGain’s knowledge management to make its contact center agents effective, efficient, and compliant in answering customer queries. Agents handle queries on products and services and claims, and offer “how to” help for transactions and advice on what products to buy. Here are the results.
- 60% reduction in escalations to subject matter experts, 13% reduction in hold times
- Improved compliance
- Immediate publication of regulatory changes
- Process compliance for workflows
- Easy-to-track version history for knowledge content
The company is now looking to add digital self-service that is integrated with its contact center for seamless omnichannel DX.
P&C carriers are starting to use video chat to make it easy for customers to show property damage to assessors for claims processing.
De-risking DX innovation
The barriers to DX innovation are many. The most common ones are:
- Can’t justify the business case for the technology
- Can’t justify the cost for the trial or pilot
- Vendors don’t provide guidance for success in trials
- Not sure if the technology will add business value upon deployment
- The technology may be too disruptive to existing systems and operations
Zero-risk production pilots where you also get free guidance to quick business value, and no post-pilot purchase obligation can eliminate these barriers all at once! For instance, many blue-chip organizations, including insurance companies, have leveraged such a pilot program from us (called eGain Innovation in 30 Days™). Once these companies establish value from the pilot in their own business environment in a matter of a few weeks, they extend the deployment across their entire customer service organization.
CX, and now DX, is one of the few ways, if not the only way, for insurers to retain and expand customer relationships. Savvy carriers are leveraging risk-free innovation consumption models in DX to win in their markets.
This article was first published in Insurance Innovation Reporter.