The Need for 'Digital Fluency' in Insurance

The claims process is a critical touchpoint in the customer journey, and it's here that the digital experience often falls short.

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In the insurance industry, digital fluency has emerged as a critical element in transforming the relationship between insurance carriers and policyholders. Until recently, the primary focus of insurtech was on digitizing the initial stages of a policyholder's journey, such as policy shopping, pricing, binding and management. However, a noticeable disconnect arises when policyholders experience inconsistencies or challenges during any part of this process. The most significant divide becomes apparent when policyholders file claims, as the digital experience during this crucial touchpoint often falls short. 

Bridging the gap between insurance carriers and policyholders is essential, and there are numerous benefits to elevating claims services through digital fluency. Read on as we explore the digital disconnect between insurance carriers and policyholders, the challenges faced by carriers in embracing digital integration and how insurtech solutions aim to improve the process.

The Digital Disconnect in Claims Processing

The claims process is a critical touchpoint in the customer journey, and it's here that the digital experience often falls short. From the first notification of loss (FNOL) to the release of recoverable depreciation, every interaction should offer a consistent and cohesive user experience. This includes a seamless experience across web portals and apps.

However, the adoption of digital tools in the claims process remains relatively low, leaving room for improvement. A significant challenge is the lack of digital fluency among policyholders, who may find the process daunting due to complex interfaces, unclear instructions or the need to switch between digital and non-digital platforms during the claims journey. These various friction points make the process more challenging, which creates unpleasant experiences for policyholders when they anticipate efficiency. 

A recent McKinsey article emphasizes this digital disconnect in the insurance industry, highlighting the fact that more than 30% of policyholders are not satisfied with their insurer’s available digital channels. Moreover, only 20% of policyholders consider digital channels their top choice for interacting with insurers. This data underscores the need for bridging the digital fluency gap in the insurance industry.

See also: 3 Ways to Maximize Digital Transformation Projects

Challenges Insurers Face With Digital Integration

While the benefits of digital integration in insurance are substantial, carriers face numerous challenges. Legacy systems can hinder the smooth transition to a digital-centric approach, slowing the adoption of modern tools and creating compatibility issues between old and new processes. Insurance carriers may face difficulties in consolidating data, automating processes and providing real-time access to information due to the limitations of legacy technology. Working through multiple or legacy systems can be a complex and costly endeavor, as moving from these systems to modern, digital solutions often requires significant resources.

In addition, encouraging both employees and policyholders to embrace digital solutions can be a significant challenge. Employees, particularly those accustomed to traditional processes, might resist change. They may fear job displacement, feel overwhelmed by the need to learn new tools or simply hesitate to leave their comfort zones. Overcoming this resistance requires robust change management strategies, training programs and clear communication about the benefits of digital integration.

On the policyholder side, not all individuals are digitally fluent or comfortable with online interactions. Some policyholders may prefer traditional communication channels, such as phone calls or in-person interactions, and encouraging them to use digital tools for tasks like filing claims or checking policy details can be a challenge. It's essential for insurance companies to offer user-friendly, intuitive interfaces and provide excellent customer support for those who need assistance.

Benefits of Elevating Claims Services Through Digital Fluency

Oftentimes, the digital disconnect between insurance providers and policyholders is rooted in mistrust, leaving policyholders feeling isolated and uncertain about the claims process. However, digitization provides a unique opportunity to ground the policyholder in the process and streamline effective communication. When communication is robust, and expectations are managed clearly, consumer experiences improve, trust is rebuilt within the industry and brand loyalty is magnified.

Elevating claims services through digital fluency offers numerous benefits for both insurance carriers and policyholders:

  • Increased Employee Morale: Streamlined digital processes can reduce the administrative burden on employees, leading to increased job satisfaction and better morale.
  • Improved Customer Experience and Retention: A seamless and user-friendly claims experience can lead to higher customer satisfaction and, in turn, better customer retention rates.
  • Adaptability: Companies that are digitally fluent are more agile in adapting to evolving industry demands and regulatory guidelines, ensuring compliance and competitiveness.

See also: The Next Phase of Digital Transformation

Tips for Prioritizing Digital Integration

To bridge the digital disconnect between insurance carriers and policyholders, insurers should prioritize digital integration. To do this effectively, carriers would need to:

  • Set Clear Objectives: Understand the organization's goals with digital transformation and how it will affect both employees and consumers.
  • Align With Consumer Needs: Ensure that digital implementations are aligned with the needs and preferences of the consumer base.
  • Prioritize Road Maps: Establish a clear road map for digital integration, prioritizing essential areas such as the claims process.
  • Communicate the "Why": Share the rationale for digital transformation with employees to garner their support and facilitate its evolution in the organization.

Insurtech solution providers play a crucial role in improving the digital fluency of the insurance industry. They offer comprehensive solutions that encompass the entire claims process, from FNOL to intelligent triage, efficient process solutions and automated reporting and claim conclusion. By providing a streamlined, end-to-end digital process, insurtech solutions help overcome the pitfall of fragmented processes or niche solutions that add to the friction points within the claims handling process.

Digital fluency is essential for bridging the gap between insurance carriers and policyholders, particularly in the often-neglected claims process. By prioritizing digital integration, addressing challenges and engaging insurtech solutions, the insurance industry can offer a more consistent and satisfying digital experience to its policyholders. In doing so, it can rebuild trust, enhance brand loyalty and adapt to the evolving landscape of the insurance world.

Troy Stewart

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Troy Stewart

Troy Stewart is president and chief operating officer at Brush Claims.

Stewart started at Brush Claims 12 years ago as a field adjuster, then shifted into a quality assurance review position, where he rose to the ranks of vice president of daily claims. Appointed as COO, president and partner in 2018, Stewart was essential in the development of Brush Claims’ software suite Hubvia. He also played a large role in the evolution of the HyDAP claims handling program, which boasts a 68-hour cycle time.

In 2021, Stewart participated on behalf of Brush Claims in cohort seven of the prestigious Lloyd’s Lab by Lloyd’s of London.



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