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3 Ways Insurance Companies Can Embrace Customer Experience in a Digital World

3 Ways Insurance Embrace Customer experience digital banner

The insurance industry is shifting in many ways. From consumer experience to technology, and lifestyle changes to new markets, there is a ton of pressure on teams to evolve. Keeping track of all the change can be daunting – but understanding the landscape is essential for organizations. Start by recognizing the influences that are shaping the future of insurance and understanding your audience.

Get a handle on three of the most impactful changes happening now: digital channels, data, and new entrants. Plus, actionable ways insurance organizations of any size can make the most of the opportunities presented by digital marketing and service delivery. 

1. Meet expectations: Shifting communication and education to digital channels

Smartphones and the evolution of the search engine means that more (read: most) potential customers now use online channels to research solutions. The traditional insurance model is no longer the most efficient way to connect and resonate with consumers and the perception, especially among younger demographics, is that it’s too complicated, cumbersome, and confusing. Rather than speaking with an insurance agent on the phone or in-person to learn more, millennials (as well as their parents) prefer to research and compare solutions online; on their own time. By the time they engage with an insurance agent, their consideration set has already been formed and they have decided which product they plan on moving forward with.

So how can you adapt? Start by evaluating your overall consumer experience. Ensure that your consumer journey accounts for both online and offline activity. Is your website optimized for desktop, tablet, and mobile devices? If potential customers are impressed by your newspaper ad, they may go online to research your company and product on their phone. If your mobile experience doesn’t reflect the impression of the ad they saw, the inconsistency will be apparent and the disconnect will likely result in lost sales

A positive post-purchase experience is essential, as it could be the key to turning a first-time buyer into a repeat customer and more importantly, an advocate for your company. Is your overall customer support system well organized? Do you have a chat function on your website that is accessible and easy to find? How long is your average phone support wait time? Consider how you can engage with existing customers online to determine if they are satisfied with their consumer experience.

If you can, increase your awareness of what consumers are saying about your brand and product online. Do you have an online customer service action team in place to respond to these thoughts? Word of mouth makes a big impact, and 8 out of every 10 millennials never buy something without reading online reviews first. Set up a process to manage the online dialogue making your customers feel heard and valued.

Consumers have different expectations for businesses today. Insurance companies that do not align their customer experience to these expectations will face challenges attracting this evolving, digital-first generation.

2. Data to service delivery: Leveraging data to improve the customer experience

The infinite amount of customer data available in the digital age offers a huge opportunity for brands to improve customer experience. For many, an engaging user experience offers a competitive advantage that can make the difference in converting a lead into a sale. More than half of customers today have switched companies due to a poor customer experience, so it is more important than ever to use data to create an engaging journey that is transparent, personalized, and accessible.

While more consumer data is collected daily, companies are rarely utilizing this information to their benefit. According to InformationWeek, 80% of all data that is available will not be reviewed, let alone analyzed, to make improvements or changes deemed necessary to the customer. For small to mid-sized insurance companies, this highlights the untapped resource of existing customer data. Simple analysis can help you make changes to improve the customer experience. For example, creating a personalized email marketing campaign based on existing data around plan choices or recent plan changes, allows you to provide tailored and timely recommendations. It creates a sense of one-to-one communication that consumers value. They might also be more willing to offer personal data if they recognize the return benefit. In particular, if access to a fitness tracker results in a lower monthly premium, the value proposition is clear to consumers - and your company can analyze the additional data to help further personalize the user experience.

3. New Entrants: Consumers like online-only insurance – but hybrid solutions still have a place

Several insurance start-ups have recognized the lack of digital adoption throughout the industry and are taking the opportunity to offer a best-in-market online consumer experience. Companies like Oscar and Lemonade have developed online-only insurance solutions that are built upon a 100% digital journey for consumers. Rather than focusing on employers and providers as most large insurance companies have in the past, these new entrants are using data to completely transform the customer experience. Oscar offers a high-quality online product that personalizes each and every customer interaction, using data to track doctor visits, make recommendations, and predict consumer trends.

For those who are unhappy and dissatisfied with their typical insurance process, it is a refreshing option. Consumers have been receptive to these non-traditional insurance alternatives and have been voting with their wallets. Oscar is expected to have 250,000 subscribers by the end of 2018, with an annual revenue just shy of $1 billion. In August 2018, Alphabet (Google’s parent company) invested $275M into the start-up.

Even with new players pushing the boundaries of innovation in the industry, there is no shortage of opportunity for traditional carriers. According to a Bain and Company report, the most valuable and loyal customers still consider digital channels as a complement to offline channels, rather than a replacement. That means insurance companies looking to adapt to the digital age must also continue to perfect the offline user experience. Digital channels are a critical part of any consumer journey but need to be integrated into the full experience in order to maximize customer retention and loyalty. As a result, insurers should prioritize digital transformation and product innovation to compete with insurtech disruption and offer a worthy alternative solution.

As consumers adapt to technological advances, insurance companies that respond nimbly and strategically to offer a seamless offline/online consumer experience are most likely to flourish in the long term.


Learn more: The current state of digital distribution strategy among life insurers

We surveyed surveyed small to mid-sized insurance carriers to understand if and how they are using digital channels as part of their strategy. Download the whitepaper to discover what we learned and get tips on leading the industry in this space. 

Digital Distribution Strategy Survey: RGAX's 2018 Pulse of the Industry

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Written by: Donna Jermer

Donna Jermer is Vice President, Distribution Lead for RGAX. She is setting and building the strategic foundation for development and execution of RGAX’s innovative distribution initiatives, including the building of life distribution capabilities, agency services and ongoing distribution operations. Donna has more than 20 years of strategic marketing experience in multiple industries from financial services and consumer goods to retail.