As the insurance industry has grappled with creating meaningful touch points with our customers, a few interesting models have emerged, such as Amica Life with Cardiogram or John Hancock with Vitality. A few insurtechs, such as Life.io, have emerged as leaders focused on customer engagement. Life.io
has reduced lapse rates as much as 35%
through carriers deploying its engagement platform and using wearables to encourage healthy living through gamification and rewards.
These examples show that, as much as the focus has been on an engaging experience for the customer, work has to be done on the back end, too, to address some age-old problems.
The customer engagement in life insurance was long limited to paper and the call center. We printed policies. We printed statements. We printed bills. There was little to no engagement with customers after a policy was sold except for an occasional phone call if they had service issues or needs.
The industry has been constricted by its adage that no one buys life insurance; it is sold, not bought.
The life insurance industry has even been conflicted about who its real customer is. The carriers considered distributors to be their customers, and the distributor has usually owned the end customer relationship.
See also: Self-Service Portals Improve CX
Shifting customer demands usher in an era of change
Today, all those old truisms have to go away.
Customers want self-service capabilities. They want to begin their research online, seek views through their social networks and get feedback from their peers. There's a shift happening from, "I spoke to my Dad, and he introduced me to his financial adviser," to, "I'm talking to my social network, and I intend to buy online.” So, people do buy term life products without a financial adviser. While current distribution channels won't go away soon, direct-to-consumer is an emerging channel, especially for products that are simpler and have modest face amount and that cater to the millennials and to mid-market consumers.
Meanwhile, carriers seek to own the relationship with the end customer.
Digital takes hold
And insurance companies or even financial services companies are no longer viewed in isolation; the industry is benchmarked against other enterprises by the digital age consumer. Social media companies, the Googles and the Amazons of the world, or the latest app used by consumer have the opportunity to become the benchmark. Consumers are comparing insurance carriers against the best of breed out there and demanding, "Why are you not as good?”
See also: A Game Changer for Digital Innovation
Ultimately, much of the struggle comes back to the antiquated back-end architectures. Customer experience is not just about the front-end presentation – we as an industry need to solve the problem of the back-end enabling architecture, as that becomes critical in enabling this digital experience. By having a modernized back-end that can plug in APIs and expose those capabilities into the presentation and experience layer, you can create an engagement model that makes consumers want to work with you and be loyal to your brand. Through breaking down the customer journey, prioritizing pain points and redesigning those journeys to focus on what matters most for the policyholders, carriers can differentiate themselves as a customer-centric business.