What is the purpose of innovation? There’s no holding back progress but change for the sake of change doesn’t necessarily result in improvement. Right now, insurers are investing in technological innovation. To make sure these investments result in improvements, we must look at innovation from the perspective of the insurance customer.
Your policyholders have specific needs. Focusing on these needs will help you set your priorities.
Policyholder Need #1: Coverage and Cost Information
According to the J.D. Power 2021 U.S. Insurance Shopping Study, many drivers who were financially impacted by the pandemic decided to shop for auto insurance coverage in search of lower rates.
Insurance shoppers tend to be price-focused, so they’re looking for easy access to quotes. At the same time, insurers know that cost isn’t the only factor. This means that education is important to help insurance understand their options. According to Property Casualty 360, a study found that more than half of motorists think it’s fair to base rates on driving behavior, but 41% of motorists are unfamiliar with telematics applications.
Policyholder Need #2: Risk Management
Insurers spring into action after a loss has occurred – but what about before that? Accenture says that consumers between the ages of 18 and 34 are especially interested in sustainability, and they want digital offerings that help them make safer, healthier, and sustainable choices.
Preventing a loss is in everyone’s best interest, and more and more, insurers are playing a role in risk management. In auto insurance, telematics technology can provide drivers with feedback to help them reduce their chance of a crash, and Property Casualty 360 says that cyber insurers need to take a more proactive role in detecting and managing risks.
Policyholder Need #3: Fast and Easy Service
Bain & Company has found that two things help insurers stand out: value and ease of use. The latter is where we notice differentiation. It should be a given that insurers need to handle claims efficiently, but because claims don’t happen often, Bain & Company found that loyalty leaders can really stand out when it comes to smaller interactions, such as changing a billing address or getting answers about coverage.
At the same time, when claims do occur, it can be a make-or-break moment, and customer expectations are increasing. The J.D. Power 2021 U.S. Property Claims Satisfaction Study found that customer adoption of digital first notice of loss and other digital claims tools increased during the pandemic. These tools can reduce the time to payment by up to 5.5 days, and this is likely why customer satisfaction with homeowners insurance property claims reached a record-high of 883 out of 1,000.
Focusing on Touch Points and Pain Points
A lot of emerging technology is impressive, but before you invest in it, think about who exactly it’s impressing: your IT department or your policyholders. When assessing an innovation, consider how it will impact the policyholder’s customer journey. Which touchpoints will it improve? Which problems will it solve?
Digital transformation will continue to impact the insurance industry for years to come. Insurers will look for new ways to reduce friction points and carry out new strategies. The customer journey should lead these conversations. When the right tools and strategies are put in place, the customer experience thrives.
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