Caution and single-steps forward are not what brokers need from their insurance carrier partners as the industry accelerates into the digital age.
The importance of digital distribution following the COVID-19 pandemic is undeniable. As a result, insurers need to keep pace.
Over the past year, consumers have embraced digital channels for everything from telemedicine to Zoom weddings. Insurance sales and services activity also moved online with a marked acceleration in the application of digital technologies and the use of electronic applications.
However, the shift towards digital does not mean it’s time to fully transition to self-serve insurance buying; that intermediaries, agents and brokers are less important; or that we can now replace the insurance advisor with algorithms, artificial intelligence and chatbots.
Outside of a pandemic, near-death experience or legal obligation, people are not naturally motivated to buy insurance. To the consumer, the financial protection that insurance products offer is not always clear. Consumers also have to grapple with negative thoughts and difficult emotions when buying insurance.
Most insurance policies are also famously complicated to buy. They have a wide range of product and pricing variables, and can be nearly impossible to understand. They are, after all, legal documents designed to hold up in court. Left to our own devices, most of us are unlikely to buy insurance.
Talented brokers also know how to actively search for new customers, instead of waiting for customers to come to them like a website or mobile app.
As insurance organizations look to digital transformation efforts to future-proof their distribution models, insurers must think of digital as a sales force multiplier. Leveraging digital technologies, insurers can make it easier for brokers to sell their products, improve the quality of advice, increase lead generation and agent productivity. The human advisor must always stay in focus.
Frictionless digital sales interactions
As sales interactions shift to the virtual or online setting, great care must be taken to make sure they are frictionless. Insurance sales interactions are a critical step in the customer’s buying journey.
Online sales interactions must start with one click. The needs assessment phase should be brief and forms must be pre-filled. AI, data technologies and advanced customer segmentation can help here. Similarly, product suggestions must be personalized and appropriate.
The sales representative must also have the right digital tools including interactive charts, multimedia and diagrams to demonstrate the value of the products he or she is recommending. The experience must be seamless, highly interactive and require active participation from the potential customer to ensure engagement.
It’s time to fundamentally revamp the web-based customer sales portal, which has been a source of disappointment for both customer and insurers. This portal can be made available to the prospect after the interaction. The prospect can return to the portal anytime to review materials shared by the sales representative, purchase recommended policies directly from the portal, or hop back on a video meeting with their representative.
Insurers must also start to consider redesigning the job of the broker for human-machine collaboration, where AI augments the human aspect.
For example, conversational AI technology can serve as digital assistants to help brokers access information in a policy guide or answer questions about procedures during the application process. In addition to helping brokers access policy and process information more efficiently and quickly, AI-driven recommendations can help advisors narrow down the right coverage for their clients more efficiently, thereby improving service quality.
By analyzing its conversations with the human broker, AI digital assistants can also capture collective wisdom to automate knowledge transfer and improve the productivity of all agents.
It’s important that insurers not seek to replace the human sales advisor with AI and machine learning technologies. Rather, evolve the job of the human advisor where AI performs tasks that are highly repetitive, structured and process-oriented. This leaves the human broker with more time to focus on higher-value activities that require creativity, emotional intelligence, empathy and interpersonal skills like nurturing leads, reinforcing relationships and creating new customer experiences to drive new business.
Insurers must also make it easier for brokers to sell their products.
This includes addressing the notoriously lengthy, manual and paper-based application process characteristic of most insurance policies today. The process needs to be streamlined to remove redundant and unnecessary steps.
The underwriting process needs modernization and acceleration as it’s another source of frustration for both the broker and customer. Insurers must be wary of taking an overly cautious and incremental approach here. It is time to take more radical steps.
As insurers increasingly seek to integrate digital technology to improve business processes, distribution and customer experiences, we must remember that consumers are easily discouraged and overwhelmed during the insurance buying journey.
The need for a trusted advisor remains a critical component. With the right combination of empathetic human touch and digital, we can make the customer feel empowered, engaged and confident throughout the insurance buying experience.
Nick Frank heads the North American insurance practice and Wei Ke, PhD., is a managing partner at pricing, marketing and sales consultancy Simon-Kucher & Partners.