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Insurers need to find new ways to connect with their customers
They must focus on the actual needs and priorities of the customer
It's not the amount of customer data that counts, but the right questions
In the year 2025, we will interact with digital devices 4,800 times per day—that’s once every 18 seconds—according to predictions from market researchers from the International Data Corporation (IDC). At the moment, studies put the figure at around one interaction every 30 minutes. The IDC thus expects an increase by a factor of 100 within just a few years. Insurance companies and banks that deny the “always online” trend or wait it out will lose touch with their customers. After all, it is up to the customers to decide when and over what channels they communicate with their financial services providers—not the companies. This is even more important as new competitors see digital availability at any time or day of the week as standard.
The coronavirus pandemic has forced insurers to reflect on their respective level of maturity and is currently leading to an accelerated ad hoc-driven digitalization of individual contact points. In many companies, a holistic concept for managing the points of contact is not enough—frictional losses between the channels and within the organization are the result.
Customer behavior and channel preferences have now changed permanently and will therefore lead to digital customer interfaces becoming the new standard for many contacts. Insurers are now faced with the challenge of ensuring this digitalization of the customer interface as quickly and effectively as possible. Read more in our new issue of zeb.core.
Insurance companies need to focus on the services that customers actually demand and on the channels they use to keep rivals at bay. One very important factor is speed: “Generation Mobile” expects smooth integration of all channels according to their individual needs—not tomorrow, but today. In other areas of everyday life, such as in private communication or in music, they already accept it as a given.
Technological developments offer tremendous potential for addressing changed needs. After all, customers leave a trail of data behind them that gives detailed insights into their wishes. Insurance companies need a digital interface to record all customer data and orchestrate the diverse information and data flows. The fact that customers want more contact and communication with their insurance company should not be seen as a challenge, but as an opportunity!
However, from our experience on the market, very few organizations have so far managed to follow up their intentions with specific actions. Rather than tackling the changed needs of customers and shaping the digital interface, many insurance companies are primarily optimizing their internal processes. The added value for customers is minimal unless their savings are passed on.
Many insurance companies fail to recognize that the customer is already setting the agenda. Thanks to comparison sites and online media, they already have—or believe they have—a good overview of the market and prices. They want plausible offers, comprehensive services and the good feeling of having the right partner at their side. Customers want to be looked after and communicated with in the way that best fits into their lives—in real time, whenever they like and via their preferred media.
However, it would be inefficient to offer every customer each product and every touchpoint: while over-50s might use telephones and tablets, millennials prefer chat clients. Once preferences are known, the channels must be selected and managed. This is the core around which all interfaces revolve. The management of this task determines which channels are open at each touchpoint and which insurance products, services and value propositions a customer receives in their channels.
Web corporations serve as role models. Thanks to high technical and organizational quality, they generate outstanding business. They address customers in a way that speaks to them, convey an important feeling of simple usability and a logical customer journey and utilize emotional touchpoints.
Looking forward, companies can focus on five design principles for a digitalized organization. The customer is caught up between products and services, channels for communication and the strategic facets of management, organization, technology and skills. The respective customer interface emerges from the framework with its dimensions—individually designed for each customer in order to satisfy their specific needs.
Yet, customer-centric channel management can only work if the corresponding process landscape and the organization itself are aligned with it. After all, in their choice of access channels, people do not distinguish between departments and responsibilities, neither do they care about internal company borders. From start to finish, the processes—from the first inquiry with a broker to taking out a policy—must be consistently defined and, most importantly, managed.
In future, rather than a rigid organization divided into departments and responsibilities, flexibly adaptable teams will be needed in order to satisfy customer requirements. It is important to think more in terms of modules and to link the management of workflows much more strongly to all input and output channels in the future. Due to the shorter cycles between new services, employees are needed who can work very flexibly in different roles and with other stakeholders (internal/external). Managers in particular need to serve as coaches and role models.
The quality of the customer experience lags far behind the technological possibilities: at nine out of ten insurance companies, customers are taken back to the very start of a process when they change channels (for example, from website to telephony). 40 percent of health and life insurers do not offer their products on online or mobile channels, thus inadequately monetizing their existing online customer contacts.
All of this can be summarized under the much-used term “agility” and is related to the organization, the technology and also to the culture of employees and managers. Organizations need to act with digital cohesion, because isolated initiatives that are not integrated often end up as a flash in the pan. There are already quite a few best practice examples from the insurance sector. They also ensure that customer expectations continue to rise.
In an increasingly competitive environment, it is high time for insurance companies to offer their customers new and flexible touchpoints. A multi-channel strategy demands the simultaneous individualization of channels, products and services. Rigid organizations are a thing of the past—the future belongs to flexibly assembled teams, processes designed with the customer in mind and a new understanding of leadership. Because the customer sets the agenda.
