Insurance 2.0 – Digital Platforms, e-commerce and product for Next Gen customers

New technology and evolving customer expectation is a powerful driving force, changing the insurance environment fundamentally. Customers expect insurance companies to use new technology, analytical solutions, web and mobile applications as medium for their continuous engagement throughout the whole customer journey. In addition, customers demand more self-service opportunities, customized and personalized products/services; and a high service level across all sales and communication channels.

Expanding customer expectations and shifting market boundaries are accelerated by the growing adoption and innovative uses of emerging technologies by InsurTech and existing insurers. The impact of these technologies on the insurance industry will be profound, pivotal, and game changing. Some insurance carriers are introducing mobility to improve productivity and efficiency of various business processes. Some of the most impactful emerging technologies are compelling the insurance industry to do things differently. Insurance companies are upgrading their digital platforms and online journeys to suit to new age customers.

Digital Platforms 2.0

Changing customer along with rise of smartphones, 4G telephony and new software development tools have expedited the emergence of innovative digital insurance platforms. This platform provide better information, user experience, convenience, and customization than traditional channels. This platform also provide better transparency, rates and convenience to new customers. Many of the innovative insurance platforms have emerged Owing to lower startup costs enabled by new software development tools and the digital business opportunities in the industry. These platforms operators are looking to address new digital trends such as the sharing economy and growing customer needs of simplicity and transparency.

The Digital platform push is leading to three types of opportunities for insurers in India. The first opportunity is in terms of repositioning themselves in front of the new customers. The second opportunity is in terms of improving revenues by increasing the number of insurance customers across geographies and by increasing number of high-risk products. The third opportunity lies in reducing operating and distribution costs across complete value chain.?

The key constraint to implementing changes for a new Digital value chain are the legacy, vintage systems -work force and technology, that currently enterprise insurance companies. As a result, we see a clear focus of insurance companies on the revenue enhancement side and limited focus on digitizing their operating models.?

Customers expect insurance companies to offer digital platforms, where everyone can easily find product and service related information, as well as self-service options to manage online transactions, claims management and access to personal information. Platforms providing self-services options to customers opens up the opportunity of up selling and cross selling.?

In the short term, new insurance companies (more so in the non-life segment) will tap into the Digital platforms space while existing insurers will innovate and deliver new product propositions. These companies would test the frontiers of products, processes and channels that can actually be transformed digitally and to what extent the insurance industry will continue to be driven through traditional ways of doing business.?

A few of the disruptive technologies that promise to deliver true advantages of digitalization include robotic process automation (RPA), enterprise mobility, Block chain, IoT, and Analytics. Besides meeting short-term productivity and efficiency goals, these technologies help insurers provide a seamless multi-channel, multi-modal experience to their digitally empowered and demanding consumers.

Increasingly, Indian insurance carriers are considering digital strategies inclusive of mobile for their entire consumer-facing process―from sales to policy issuance to payments, claims and ongoing engagement. In addition, carriers are extending the use of mobile apps to other constituents such as their agent, bancassurance and other distribution channels to make it “easy to do business” with them.?

E-Commerce – 2.0?

For new age customers, it is common habit to check, compare and buy products online, to use the digital channel for researching products and quality of services. To make sure future positive customer experiences, insurance companies have to ensure a seamless omni-channel customer experience along the whole customer journey. This requires addressing customers’ needs from creating awareness through complete research and the purchase process, right on through service and claims management, and finally to retention and word-of-mouth. ?

As most customers today start their purchase process with online research, the corporate website plays a significant role in the digital customer journey and therefore companies need to provide meaningful content and an engaging experience to all visitors. During the research phase, comments and reviews of existing customers play a significant role in the purchasing decision. Mobile and social media signify further internet channels to improve the customer experience by providing personalized and significant omni-channel marketing initiatives.?

Insurance companies must know their targeted customers segments better, offering products and content according to the customer’s needs for successful engagement of the customer during the research phase. Post engagement, the digital experience should lead toward directing and influencing the customer’s buying decision process. To influence, it is crucial to provide transparent, simple and decision-supporting information about products according to the customer’s needs. Buying decision are sometimes influenced by endorsements from existing customers such as comments and ratings, or specific topic related information, that is the most relevant for targeted customer segments.?

Customer expectations on the online purchase process are gradually increasing. This originates from their experience with global online companies like Amazon or Netflix, which deliver their products to the customer’s doorstep rapidly at a competitive price and twenty-four hours a day. A substantial step in the policy-buying journey is offering a fast and simple purchase process across all sales channels. This also involves automatic capturing of details from customer documents and integration with different third party service provides. An Omni channel-enabled buying journey that augments traditional channels direct purchasing and a single customer experience across online, mobile and now social channels. This requires taking details from one channel and handing off to another to complete the transaction. A new customer should be able to start the policy purchase conversation with an online financial advisor, initiate a policy purchase on the phone and complete that transaction by personal computer.?

The concluding step of the digital customer purchase journey is the referral stage, in which customers recommend the product or the brand to others. Insurance companies that motivate and influence their customers to share their positive experiences through different social networks can influence the purchase behavior of targeted potential buyers.?

It is essential to build Optimized customer journeys with deeper, personalized engagement and better Customer experience. This will require rolling out a new digital experience and will include collecting feedback from representative group of customers who are willing to be part of a beta testing group.?

Products 2.0 ?

A one-size-fits-all customer approach is going to be replaced by customized digital journeys and personalized product solutions. Personalized products in which Customers will be allowed to configure insurance to meet their requirements and are allowed to make quick micro insurance purchases based on the situations through their mobile devices.?

Insurance companies need to focus on products specifically created for non-urban population, geographies and demography. Products with flexible premium contributions and other flexible features are essential to meet the needs of individuals employed in informal and rural industries and having irregular/seasonal income. Given the scarcity of such non-urban specific products and difficulty in viably penetrating such markets with traditional channels of distribution, Insurance companies will be able to reach the masses though mobile technology.?

New and Emerging technologies and innovations are transforming the insurance landscape as they enable new ways to measure, control price risk, engage with customers, reduce cost with improved efficiency, and expand insurability. While digitalization, due to its disruptive nature, creates competitive challenges for insurance carriers, it also opens up new opportunities. New insurance companies will be defined by ability to rapidly roll out new products and capabilities while expanding into new markets, provinces or other geographies.?They will be powered by Rapid adaptation to business, market or customer changes. The digital age will belong to company which will embrace the digitization in true sense – from front end to back end systems, from customer engagement to experience, from reducing costs to innovating the business.

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Insurance 2.0 - Blog series

Blog 1 - Phase of Tech savvy, DIY, Digital Customer

Blog 2 - Future Disruption: Customer Factor

Blog 3 - Digital Transformation in Insurance