Digitization is not slowing down, and so brokers and carriers need to improve customer service and a user’s online customer experience (CX), suggests a recent white paper by Reuters.
According to the authors of Next Wave Insurance: Daring to be Different, the first step is to “put the customer back at the center of everything.”
When companies put cost concerns over CX, “it shows,” the paper reads. Creating customer interactions based on how they want to do business is key. And using data is one way to build customer-centric solutions.
Some methods that promote customer centricity include: building a “robust” application programming interface (API) strategy, creating new B2B channels, and investing in customer self-service capabilities.
Technologies like artificial intelligence (AI), machine learning and predictive modelling are also useful tools to help drive customer centricity.
The paper also highlights the importance of trendspotting. For example, demand for usage-based insurance (UBI) is forecast to surpass $125 billion by 2027.
Some insurers are getting ahead of this trend. The paper cites the example of Nationwide, which in 2020 began to offer personalized discounts for drivers who use data gathered by telematics to drive safely.
To improve company processes, the paper highlights action insurers should take now, calling for companies to “reframe thinking, test often and test quickly.” Agility is key to meeting customer expectations as they change.
Another action companies can take is internal collaboration to build solutions. “With IT and the business in close collaboration, the voice of the customer comes closer to the development process,” the paper reads.
What’s more, customers are increasingly interested in pricing transparency. But “as customers demand more, insurers cannot always discount or give a customer something different.”
The authors suggest companies begin to harness data, AI, the Internet of Things and telematics to open conversations with consumers. “Instead of bringing out pricing transparency and showing the car owner what they are doing, change the model and show them how what they are doing compares to the norm. In other words, differentiate on how the service is sold, and give the customer something they can control.”
But with this, the authors suggest insurers start planning for the future now. Why?
A survey by Deloitte finds that 43% of global insurance industry respondents are finding it harder to source skills across technology-related areas, namely AI/machine learning, cloud engineering, data science and analytics, software development and cybersecurity.
With these skills in short supply, companies “must now understand where the data comes from, how it is used, what digital tools are offered and how they work,” the paper reads.
As digitization continues in the workplace, it’s important for companies to figure out where they want to invest. Do they want to buy these technology systems from a third-party? Or build them in-house?
The authors suggest a “thoughtful balance” between the two. There are both pros and cons to both. For projects that deal with confidential or proprietary data, “doing it in-house makes sense,” the report reads. But a company can also use “external partners to fill gaps” and quickly fulfil projects.