Modernizing Insurance Industry: The Role of Digital Distributor

The job of an underwriter, customer service rep, technologist, and claims professional cannot exist until a policy is sold. Selling policies for most of the history of insurance was done person-to-person via brokers.

However, today is different. Carriers and brokers are exploring what it means to be a digital distributor. The tools of a digital distributor go well beyond an e-app or online portal. Today’s digital distributor is focused on how they can use technology to super charge sales productivity, how they can create programs with digital MGAs, go from affinity to embedded insurance. While the insurance business has been steadily increasing through digital channels, most insurance distribution came from intermediaries and physical sales. However, with distancing measures here to stay, agents are rapidly re-calibrating to use digital channels.

The rise and need for self-service tools have only risen multi-fold since the pandemic and highlight the importance of digital in the insurance industry. Agents are pushing their clients to initiate transactions online and pushing platforms to evolve with the times.

The rise of Chatbots has been significant in the insurance industry too. Insurers are turning to chatbots for real-time customer service and even equipping them with Artificial Intelligence capabilities, helping customers get their problems resolved much faster than before. However, customer satisfaction depended heavily on the ease of use of these tools and hard-to-use and access tools. As a result, customers have quickly shunned these tools.

Technology expertise at scale is a valuable ally for insurers in today’s times

Tools and technologies that help both agents and customers have become the most infested areas in the industry. An essential enabler for this investment is data. Insurers must understand the gaps in processes for their customers and agents and identify a plan to bridge these gaps using technology tools. Insurance companies have massive amounts of data locked away as paper assets in a warehouse. The faster they can harness insights from this data, the sooner they can identify upcoming trends and build serious grunt into their digital distribution outcomes. Using data models, insurers can help their agents drive digital lead generation (something that financial services companies have a first-mover advantage in) and segment their customers based on their lifetime value. They can then upsell and cross-sell these segments with products driven by data and current needs.

Furthermore, insurers can build feedback mechanisms into how agents reach customers to refine the analytics model further. This continuous learning helps identify the precise needs of the segment with pinpoint accuracy. A data-driven strategy starts to close the gap between what customers want and what insurers can provide.

Partnerships with technology integrators and product makers are vital for insurers. The right partner can not only help leverage technology as an enabler but turn it into a key differentiator.

The sheer availability of tools and tech coupled with their decades of experience working with similar enterprises makes technology companies ideal for driving this revolution. The right tools help bring agents closer to customers. Post the sale, it helps customers get closer to the insurer. However, a poorly designed experience can shun customers away from using these tools. It may also lead them to churn to another brand.

Planning for digital distribution success

A vast range of channels are available for digital distribution, and getting the right mix is essential. We previously talked about customer segments, and going a level deeper to understand which channels customers are most comfortable with enables more precision targeting. Insurers are increasingly turning to digital distribution channels as a way of connecting with customers and building loyalty. With this many advances in technology, insurers can create an experience tailored specifically to each customer or segment they’re targeting. However, the right tools can only be successful if your company has the expertise to use them effectively.

Unified customer data and document management helps in process simplification and helps in integrating multiple channels for cross-sell and up-sell of insurance products. Self-service will be strengthened using mobile integration for customers on the move. The same infrastructure can be extended to partners through integration (API gateways) for innovative business models with partners. The core policy and claims management will be integrated along with the social analytics, unified customer data and partner management through various tools.

When re-engineering or building a new digital distribution platform, the following experience needs to be properly thought through and aligned with the overall business strategy. It can be easily ported into Minimal Viable Products (MVP) if required, through Design Thinking workshops. The Experience Design ownership doesn’t only sit with IT – it needs constant collaboration from the overall organization ecosystem.

Changing the nature of the customer experience

Insurers should integrate three vital layers when building new products, services and touchpoints:

Empowerment: Insurers need to empower their customers by enabling them to access relevant information to make informed decisions. This way insurers can establish a relationship based on trust.

Engagement: We discussed the role of the broker and consumer preference for channels, but engagement goes beyond just the platforms and channels insurers choose. Better insights into customers’ interests and experiences – with their permission – help companies to design and offer solutions that will be more appreciated and valued. Providing time-relevant offerings on channels people are most likely to frequent is the best way to drive engagement and improve customer opinion.

Emotional connection: Emotional connection results from a combination of companies' ethics and social responsibility, the way they treat their employees, the causes they champion, and their relationship building experience. Showing genuine and authentic care for both employees and consumers increases the emotional connection.

To rival key tech players, insurers must engage with consumers in ways they respond to, empower consumers with relevant, up-to-date information, and show they care about their customers and society. In the rush to digitize and adopt new technologies, insurers also need to embrace their ability to personalize their customer service.