When diversity, equity and inclusion (DEI) conversations come up in the corporate world, they often center on hiring and retaining talent. Those are important conversations for creating thriving workplaces. But we can also go a step further by championing DEI principles through inclusive design and delivering powerful, customer-first solutions in the world of software. 

A report from the Capgemini Research Institute found that 84% of tech employees acknowledge that their products are not inclusive. The report also identified stark differences between the opinions of leadership executives and underrepresented employees, including women and ethnic minorities. 

There’s a dire need for inclusivity in tech, and it’s apparent across industries. As the insurance industry continues to become more digitized year after year, insurtech product designers are tasked with not only creating products that save time and boost efficiency but also with creating a great user experience and ensuring products are accessible to a broad range of users.

My team’s goal is to create products that are not only accessible but also intuitive, efficient and effective for all our users. Vertafore’s product team is engaged in a multi-year project to modernize the user experience (UX) of our solutions. For example, as we look at our use of color, we are considering the needs of users with vision challenges and ensuring we create sufficient contrast. When we design for everyone, we further diversity, equity and inclusion.

User experience is key 

No digital tech escapes the need for inclusive product design, from apps on your iPhone, to your Google Chrome browser, to your agency’s latest tech solution. 

There’s a growing understanding in the insurtech marketplace that technology can create the efficiencies that empower insurance professionals to focus on what they do best. Agency management system users, for example, want to accomplish specific tasks and functions. But too much information, and multiple complex workflows, shift their focus to figuring out what’s useful and what they need to do next. By placing UX at the forefront, products not only become more accessible, but the relationship between design and end-user efficiency grows stronger. 

As insurance tools become more robust (and as users become savvier), forward-looking tech providers and agencies are realizing that efficiency results not just from features and functions but also from how users experience their technology. 

Inclusive technology is a journey 

Inclusive design describes methodologies to create products that enable people of all backgrounds and abilities to access the same experience. Software that prioritizes inclusive design improves the user experience, which can boost brand awareness, sales and positive reviews.

The move toward a more inclusive product design strategy can seem painstakingly slow. In the B2B industry, software is complex—with a broad spectrum of data and usages—and often is slow to change. As a result, it’s still common to find biases throughout these intricate systems. 

It’s important to think of product design as an evolution and an opportunity to eliminate points of exclusion. In doing so, we help to lead the change and begin to set new patterns other designers can replicate. 

1. Listen to users 

Successful design starts with listening to users and observing the user experience with your products from their perspective—striving to make accessibility and inclusion a product’s default rather than an option. A diverse product design team increases the group’s ability to see various ways of solving problems and establish a sense of belonging and results in higher employee engagement. 

Once the team is in place, insurtech leaders can begin the product design or redesign process by watching how real people use their tools to find ways to create focus and effective workflows. In practice, that can mean:

• Automatically surfacing the right information at the right point in a workflow 
• Streamlining and standardizing how users navigate the system
• Developing an open platform that can readily share data across applications
• Breaking tasks into steps, with built-in guidance to help users complete them
• Decluttering screens and menus so users can better focus
• Integrating simple, culturally diverse design elements—like icons and colors—to make the user experience more intuitive

See also: Industry Still Lags on Diversity

2. Standardize best practices 

DEI principles help product designers identify points of exclusion—and opportunities for inclusion—in the user experience. 

For example, most users recognize the “hamburger” symbol in mobile apps and websites as an indicator for the navigation menu. If designers replace that icon with something like a company logo to support the brand, it comes at the expense of the user experience. When faced with multiple ways to complete a function, users often default to the path they know best, even if there’s a better option.

Complex or unique styling—like an alternative to the universal “hamburger” menu icon—is less intuitive and forces users to mentally translate what they see.

3. Inclusivity as the default 

In the ‘70s, sidewalk indentations were created in response to the advocacy for people in wheelchairs. We now know these indentations turned out to benefit many, from bikers, to travelers pulling suitcases on wheels, to parents pushing children in strollers. Now known as the “Curb-Cut Effect,” that building for a historically marginalized group resulted in better outcomes for everyone.

Text size is another great example where opportunities for greater inclusivity abound. Developers used to favor small, compact text because they were used to computer code. Yet the National Institutes of Health (NIH) estimates that 11 million Americans aged 12 and older have uncorrected visual impairments. Rather than strain these users or force them to change text sizes, many software designers now default to larger text, along with more legible fonts and more whitespace.

These changes benefit all users by creating an experience that is not only more accessible but also more visually engaging, with content that is easier to comprehend.

Invest in your tech 

Good user design doesn’t happen by accident—it is the result of investment, applied expertise and customer engagement. 

As agency leaders evaluate their tech stack in search of tools that deliver on the promise of efficiency, they must also consider what the software can do and how it supports users. That marriage of form and function is where agencies will see the real return on their investment.

It may be hard to imagine now, but there was a time not too long ago when individuals had to balance a checkbook to determine their available cash flow. Nowadays, consumers know better, having come to expect the modern experience of logging into an app or online account to see their current, pending and investment balances in real time.

Today, the health insurance and employee benefits industries are seeing a similar shift in mindset. Consumer expectations for how they research, select and procure most products today have reached new levels of sophistication, due in part to third-party experiences developed by digital leaders such as Amazon and Netflix.

With a wave of change in employee expectations, employers have placed a higher value on benefits programs to satisfy rising workforce needs and compete for scarce talent post-pandemic. All industry stakeholders — brokers, general agents, insurers, benefits providers and tech platforms — have abruptly found themselves functioning virtually. They strive for more intelligent, digitally enabled ways to do business and remain relevant. The insurance industry faces a great opportunity and significant risk as it changes in response to powerful demographic, societal and technological forces.

The healthcare industry, despite being a multibillion-dollar market, is known for its complexities and slow pace when it comes to technology adoption. Health insurance brokers, in particular, face challenges with managing data and processes among carriers, brokers, employers and the millions of employees they represent. For example, setting up a new plan requires brokers to gather information from various sources and enter it manually into their systems. This process can take hours or even days and is prone to human error. Furthermore, verifying eligibility, claims processing and communicating with carrier partners and customers often involves cumbersome and inefficient back-and-forth email transactions.

For one employer group to enroll with a carrier, it could take hundreds of hours of interactions spanning request for proposal (RFP) and quoting to plan consulting and routine service. This process includes the email transmission of millions of data points trapped inside PDFs, creating opportunities for quality control, lost time and errors.

A Better Way

Carriers typically have complex legacy systems that can be time-consuming and costly to update or replace and face significant regulatory pressures. If new solutions are ineffective or improperly implemented, the financial and reputational consequences could be disastrous. The lack of flexibility has prevented large-scale change and innovation within the healthcare ecosystem. In contrast, nearly every other industry has evolved at a pace and scale that at least meets consumer expectations.

Fortunately, application programming interfaces (APIs) offer a modern solution to integrate different systems and streamline processes, allowing health insurance brokers to save time, improve accuracy and enhance communications to improve the overall customer experience. An API is a set of protocols allowing different software applications to communicate. This means that data can be shared seamlessly between other systems, eliminating the need for manual data entry and reducing the likelihood of errors. With APIs, health insurance brokers can integrate their systems with carrier partners' systems, enabling real-time data transfer and automation of various processes.

One of the key benefits of APIs is the amount of time they can save for health insurance brokers. Brokers can free up thousands of hours each year by eliminating manual data entry and back-and-forth email transactions. As a result, brokers can focus on higher-value tasks such as building customer relationships, providing better service and growing their business. APIs also reduce the time it takes to set up new plans and verify eligibility, enabling brokers to respond to customers' needs faster and more efficiently.

See also: Building Your Digital Sales Arsenal

APIs can also help minimize the likelihood of human error in data entry. When data is entered manually, there is always the risk of typos, missing information or incorrect data. This can lead to delays, re-quotes and even legal issues. APIs, however, enable real-time data transfer and automatic data validation, ensuring that the information is accurate and up-to-date. This can improve the overall quality of service and reduce the likelihood of errors, elevating the customer experience.

Furthermore, APIs can enhance overall communication efficiency. With APIs, health insurance brokers can communicate with carrier partners and customers in real time, enabling faster responses. For example, when a customer submits a claim, the API can automatically transfer the data to the carrier partner's system, which can be processed quickly and efficiently, reducing the time it takes for the claim to be processed and allowing customers to receive their reimbursement faster.

Bridging the Human and Digital Touch

While the healthcare industry has made significant strides in new offerings and solutions, such as patient virtual reality and aggregated health data apps, the lingering effects of the pandemic continue to expose the lack of industry-wide data standards and customer interfaces. These challenges emphasize how true digital reinvention requires a strategic combination of data, a robust set of APIs to integrate data sets across organizations and domains and people with the consulting chops necessary to work meaningfully with the results.

Overall, APIs offer health insurance brokers an efficient and modern way to manage data and processes, saving time, improving accuracy and enhancing communication efficiencies. By integrating their systems with carrier partners' systems, brokers can streamline operations and improve the overall quality of service. This can lead to a better customer experience and enable brokers to grow their business by focusing on higher-value tasks. In today's fast-paced world, where customers expect instant gratification, APIs can help health insurance brokers keep up with the changing times and stay competitive in a challenging market.

Telehealth experienced a surge in use during the COVID-19 global pandemic. According to McKinsey, consumer interest in telemedicine rose from 11% to 76% during the pandemic. In addition, 57% of healthcare providers said they viewed telemedicine more favorably, and 64% of providers said they were comfortable using telemedicine. In the course of just a few months, telemedicine physician visits increased by 50% to 175%, depending on geography and type of practice. The popularity of telehealth has continued to grow post-pandemic.

“Telehealth has become a useful resource in the workers’ compensation arena,” said Lisa Haug, assistant vice president of medical management at Safety National. “However, it is essential to perform a good hands-on assessment by a specialist or physical therapy provider for the initial treatment or visit, then transition to telehealth. It is imperative to assess the overall well-being of the individual in a brick-and-mortar environment, because it is extremely difficult to effectively assess movement via telehealth, for example, seeing how the patient transitions from sit to stand, how they move about the room, their range of motion and overall well-being.”

The following are advantages and disadvantages of telehealth.

Advantages

• Immediate triage, assessment and diagnosis of a workplace injury or illness, acceleration of diagnosis and treatment plan, increased adherence, speed of recovery and improved outcomes.
• Efficient and personalized treatment.
• Time savings by eliminating trips to the ER, urgent care, clinic or provider’s office.
• Same licensing standards for physicians as in brick-and-mortar setting, and they must be licensed in that particular state to practice via telehealth.
• Convenient access for injured workers in rural areas that may not have healthcare entities nearby. This helps to avoid the transportation issue of showing up for doctor’s visits.
• Easy ability to perform physical therapy, including home exercise program via telehealth.
• Early intervention of therapy without delay due to access to the therapy facility and transportation issues.
• Potential of earlier return to work for many.
• Better access to clinicians, including infectious disease specialists and pulmonologists for respiratory conditions. Prior to COVID, it was rare to make a referral to these types of specialists, but, with the onset of COVID, these referrals became more commonplace.
• If there are language barriers, patients can align with a translator via telehealth, which is oftentimes easier than arranging for a translator at the appointment.
• Many areas have a shortage of specialists, such as dermatologists. With cross-licensing, we can offer a provider from a larger geographical space via telehealth.
• Reduced wait time for telehealth, which reduces time away from home/office.
• Earlier treatment intervention, which allows for the ability to prescribe treatment sooner for items like medications, physical therapy, durable medical equipment and diagnostics.
• Ability to empower employees to use technology and take a more active role in their care.

See also: How Digital Health, Insurtech Are Adapting

Disadvantages

• Lack of in-person experience. Severe injuries and diagnoses require physical hands-on assessment with the patient.
• Potential for inaccurate diagnosis based on video. Some diagnoses require a hands-on visual component.
• Initial PT evaluation and final PT evaluation/FCE need to be in person for a thorough assessment.
• Limitations for assessing body image, gait and overall well-being, which can tell a lot about a patient’s status.
• Poor patient perception. Some patients feel that they are not getting the proper care with telehealth.

As a resource, telehealth is here to stay. If used properly, it is another tool in the toolbox to allow the continuation of treatment for injured workers. The key is knowing when and when not to use it.

Like other industries, insurance is undergoing a talent crisis. The Baby Boom’s peak was in 1957, and talent born that year has now reached the typical retirement age of 65, leading to record high retirement numbers. As a result, the World Economic Forum expects Gen Z and millennials to make up more than half of the tech workforce by 2025. 

Contrary to their predecessors, Gen Z and millennials think differently about where, when and how they work. Those thoughts must be considered when trying to attract and bring this talent profile onboard. To further complicate things, when surveyed on potential career choices,

Gen Z and millennials ranked insurance below mining and manufacturing, according to research conducted by ACORD. This is due in part to the fact that any industry rumored to have manual, time-consuming and error-prone processes will keep them away in droves -- a perception that, unfortunately, many Gen Z and millennials have about the insurance industry. It will require investment in technology, as well as some cultural and process changes internally to engage this group and encourage them to consider a career in insurance. 

Read on for five ways to attract, recruit and retain the new generation of talent, ensuring you have the right talent, in the right role, at the right time. 

Embrace Digital Transformation 

Gen Z and millennials are digital natives. Not only do these tech-savvy generations expect cutting-edge technology as consumers, they also expect it in the workplace. There’s a belief among these generations that if an organization isn’t adopting the latest technology, it’s not likely to be around in the long run. A lack of technological investment deters serious candidates and is often one of the reasons existing employees become frustrated and leave. 

Digital transformation reduces manual tasks and processes, empowering employees to see beyond their day-to-day tasks. Freeing their time gives them more flexibility to concentrate on meaningful and rewarding work like client retention and enhanced customer experience. 

Your brokerage can make your business more appealing to a workforce expecting instant, customer-centric experiences by implementing a digital strategy that enables: 

• Innovation: Using digital technology to transform business operations. 
• Flexibility: Providing mobile-friendly applications and remote work options. 
• Security and Sustainability: Future-proofing the brokerage to ensure business longevity and stability. 

Reimagine Job Descriptions 

Brokers face an enormous task when they post a new job, and how you write your job descriptions can make or break finding top talent. 

You might already be opening your job description with a promotional summary of your brokerage, but does it tell a story about your culture, work environment and plans for the future? Be sure to include details that distinguish you from your competitors, including higher compensation, greater flexibility, better work/life balance, increased learning and development opportunities and mental health and wellness support. These are all compelling benefits to the evolving profile of insurance brokers and are likely to intrigue candidates. 

We all know that insurance is a jargon-based industry that uses countless acronyms. This may turn off candidates, especially those looking to break into the industry. Indeed.com suggests avoiding internal or industry-specific lingo, acronyms or other terms candidates are less likely to search for or understand. 

See also: 5 Ways Tech Can Draw Young Talent

Emphasize a Diverse and Inclusive Culture 

There is no longer a “typical” profile of an insurance professional. Their ages and origins are different — they speak multiple languages and have different beliefs, practices and backgrounds. According to Deloitte, Gen Z and millennials see diversity as something that boosts performance, especially when senior management teams are diverse insurance brokers. They must then demonstrate a commitment to workplace diversity and recruiting. While this can be challenging in a flexible work environment, leveraging digital communication channels, such as interactive webinars, community channels, a company intranet or other online collaboration tools, can create a culture in which you purposefully develop a sense of belonging, diversity and inclusiveness.

Aligning with Gen Z and millennial values is key. Nearly two in five say they have rejected a job because it did not align with their values. Meanwhile, those who are satisfied with their employers’ societal and environmental impact, and their efforts to create a diverse and inclusive culture, are more likely to want to stay with their employer for more than five years. 

Revitalize the Onboarding Process 

The onboarding process shifted considerably during the pandemic. New hires didn’t meet their team in person, and training was virtual. Even though many brokerages have returned to working in the office full-time, 75% of Gen Z and 76% of millennials prefer a hybrid or remote working situation. Your brokerage must adjust to this pattern, especially during onboarding, if you want to keep them. 

Onboarding a new hire remotely (or a mixture of in-person and online onboarding) is here to stay. Consider integrating technology into your employee orientation processes to simplify compliance aspects, such as filling out paperwork and learning the basic rules of the organization. For instance, by using digital documents, the employee can confirm they have watched presentations and video material explaining the organization’s rules using a digital signature.

Developing programs that include on-the-job learning, social learning and formal learning in a format of the candidate’s choice, whether digital or in-person, will demonstrate that they’re a valued team member and that you’re committed to making their integration a success. 

Provide Career Development Opportunities 

It has become essential to provide career paths within your business. A new study by Amazon finds that almost three-quarters of millennial and Gen Z workers are planning to quit their jobs in 2023 due to a lack of skills-building opportunities. Millennials and Gen Z want to know there is room to grow if they join your brokerage, so providing them with a clear path to future development can help attract and retain that talent. Some ways you can do this include:

• Identify clear goals to work toward: Collaborate and clearly identify their career goals and then come up with a development plan to achieve them. 
• Create a mentorship program: Offer opportunities to be paired with mentors who can help guide their careers with the company. 
• Promote from within: Consider hiring from within when a position becomes open. If you know you will need to fill a position in the future and it aligns with one of your employees' career goals, create a cross-training program that will enable them to earn that spot. 

See also: 3 Reasons Millennials Should Join Industry

Every corner of our industry is facing a talent crunch. In addition to recruiting more producers, marketers and customer service representatives (CSRs), we also need more actuaries, accountants, social media experts, data analysts, benefits experts, IT professionals and experienced managers.

Potential candidates need to know that the people working in insurance are problem solvers with bright futures and use their talents to help their communities. Using these five points can aid in not only attracting and retaining the new generational talent, but also fostering an environment that promotes growth and embraces change, allowing your talent to count on having a long and fulfilling career in insurance.

Diversity, equity and inclusion have come under fire recently, as people question the need for DEI, its effectiveness and occasionally even the motives behind it.

In many cases, the criticisms may be because of a lack of understanding about all that DEI entails. People hear about a DEI program or initiative and they think only about race, or perhaps about efforts to get more women into the C-suite. And they think that for conditions for one group of people to improve, conditions for others must be made worse.

Certainly, race and the effects of systemic racism remain at the center of DEI discussions, and with good reason. If we can’t fix that, we won’t be able to fix anything else. But with that said, DEI is about more than race. DEI also includes people with varying degrees of physical ability, neurodivergence, illness, sexual preference, economics, trauma and more. 

DEI also is not a zero-sum game. Improving one person’s situation doesn’t mean someone else must lose. The goal is equity, removing barriers so that everyone gets access to the same opportunities.

Another thing critics miss is that embracing DEI is crucial for any business. Not only are companies that support the concepts of DEI more profitable than those that don’t, as shown by a 2020 study by McKinsey & Company, but DEI also can play a significant role in risk management.

As just one example, when businesses fail to address DEI issues, their reputation can be at risk. Think back to 2020 and the political, business and social climate surrounding the murder of George Floyd. It became clear that not addressing DEI or sharing thoughts publicly about inequities in society could affect a business's public perception and bottom line.

But here’s another example, perhaps more directly relevant to the culture within a company. All people have biases, and that’s true no matter their race, their gender or any other characteristic connected to them. Biases are universal. But the fact that this is a problem we all share doesn’t make it less of a problem. Businesses that ignore this problem – that pretend it isn't there – run the risk of legal troubles when a supervisor or an employee crosses the line and discriminates or creates a hostile work environment.

See also: April ITL Focus: Diversity, Equity, and Inclusion

Part of the work of DEI is to get everyone involved; to make DEI everyone’s responsibility. The more people who have buy-in, the less likely the business is to run afoul of any law and end up on the wrong side of a lawsuit.

But that’s just part of the legal reason behind the need for DEI initiatives. There is also the more compelling reason that it’s the right thing to do, and that DEI comes with the bonus feature that the right thing also happens to have benefits. The company culture becomes more inviting, more inclusive for all employees.

This is because everyone, regardless of background, has at some time felt rejected, exploited or completely invisible. For some, those experiences have been few and far between. For others, they are common due to historic systems of oppression in employment, healthcare and social structures.

Part of what DEI does is encourage us to understand and feel empathy for the experiences of others, helping us better recognize that all people are entitled to humanity and dignity. When we do this, attitudes and behaviors change. People look forward to coming to work, rather than dreading it. Absenteeism rates go down. Employee engagement goes up. Turnover is less of a problem as the improved culture makes workers want to stay where they are, rather than go in search of something better. The company saves money because it is not constantly searching for and training new employees.  

Sometimes people criticize DEI efforts, saying the point is to make white people feel guilty, or to imply that white people don’t have significant problems. But DEI work doesn’t suggest that white people have never suffered burdens or hardships. It’s just that those burdens or hardships were not caused by skin color. 

All of this said, it’s important to consider that everyone has a DEI story. Even if you aren’t a member of a historically marginalized group, you have a story. 

This is because diversity is about how things differ, and when you think about how people differ – in age, race, gender, sexual preference, physical abilities, neurodivergence and much more – no one is left out

Ahhh... a full-bodied merlot or cabernet sauvignon. Nothing tastes better than an aged red wine. The longer these vintage spirts lay dormant, the better. 

Unfortunately, there is no such happy result when it comes to delayed vehicle claims. In fact, the more time a claim goes unattended, the more “collateral damage” is created, with increases in (already challenged) cycle times and decreases in customer satisfaction. 

Cycle Times and Customer Satisfaction 

A recent J.D. Power report reinforces the correlation between delayed cycle times and reduced customer satisfaction, citing a notable drop in satisfaction when claims exceed two weeks.  

Specifically, compared with the quickest claims (resolved in less than one week), satisfaction levels dropped 56 points for the 34% of claims that stretch beyond two weeks, and plummet nearly 90 points when lasting beyond a month and 140 points among the longest claims. Time to settle is a key driver of overall satisfaction. 

Source: J.D. Power

Communication-related metrics, such as for keeping the customer informed of progress, also notably decline.  

Mark Garrett, director of insurance intelligence at J.D. Power, recommends a “laser focus on both speed and high-quality communications to maximize customer satisfaction.”

And that is one of the many reasons touchless vehicle claims are finding a stronghold. 

From Novel to Mainstream 

Once considered novel, these fully automated, touchless claims are now growing in popularity, empowering customers to jump-start the claims process, anytime, anywhere.   

But that’s not their only superpower.   

The portability and convenience of touchless claims open the door to a fully streamlined, virtual experience – from first notice of loss (FNOL) to settlement, repair and getting customers back on the road. There’s no waiting for callbacks, navigating busy phone lines or moving your day/week around the confines of set service hours. Instead, touchless claims bolster consumer confidence via personalized, proficient claims experiences. 

It’s all about managing consumer expectations through positive carrier experiences, and while not for everyone, touchless claims place the customer in the driver’s seat, keeping them engaged with every step of the claims process.  

Tech-Savvy Customers  

Make no mistake, current and prospective customers are primed and ready for digital experiences, including Millennials and GenX individuals – often referred to as the Digital Generation – who essentially grew up with technology and digital innovation. 

Those experiences embedded in AI – the “engine” of touchless claims – are no exception. Look no further than the findings of the Solera Innovation Index 2022, a survey of 2,000-plus consumers, OEM dealers, repairers and insurers regarding their view of AI technology and its impact on the claims/repair journey: 

• 79% of tech-savvy customers would trust automotive claims powered entirely by AI (up 7% year-over-year) 
• Approximately 1/3 of respondents personally completed a claim devoid of human interaction 
• 49% of consumers prefer end-to-end self-serve claims options 

Accelerating Carrier Adoption 

With all of the upsides to touchless claims, the exceptional customization features make their use a blend of art and science. While carrier adoption is underway, the pace is closer to a crawl than a sprint. Some may turn to a plug-in option to their existing, legacy process, then discover the approach is more clunky than seamless and throw in the touchless towel only to revert back to old ways.   

Garrett suggests a more holistic view. “The best way forward is for insurers to start focusing on carefully managing customers’ expectations and fine-tuning their digital engagement strategies to shepherd their customers through the process,“ he said.   

Improving Communications 

The J.D. Power ACS findings also point to the role of communication in the claims process, noting the three most affected key performance indicators (KPIs) when cycle time extends beyond two weeks as:  

• Accurate claim length expectations  
• Unnecessary delays  
• Updates 

A well-designed touchless claims model can provide avenues and features to address these KPIs, customized to reflect your carrier’s own unique flow, customer engagement cadence and process touchpoints.    

See also: How Claims Process Must Drive Change

Intentional Design vs. Afterthought 

To that end, carriers that can reimagine touchless claims as an intentionally designed service of their business plan vs. a piecemeal afterthought to an outdated, longtime existing “legacy” system stand to have better outcomes in the long run.   

Holdouts to touchless claims may argue that nothing can replace human touchpoints that come with relating to customers personally during one of the most stressful times in their lives. That’s true for some claims and why all roads lead back to enhancing customer satisfaction by managing expectations. We realize no single workflow for non-complex auto claims pleases every customer. That’s why complementing a customer-friendly touchless claims workflow with a hybrid model -- where digital customers may opt out to immediately speak with a human (a well-trained adjuster) when desired -- is ideal for the future claims design. 

Being empathetic throughout the process is key, especially for the longer-tailed claims that can create more effort for customers who have questions, need updates and are trying to determine next steps, Garrett says. 

Touchless claims offer many ways for carriers to personalize updates and foster strong communication – there are no cookie cutter approaches.  

If there’s any doubt about whether your current – and future – customers are ready for a touchless claims experience, cast that thinking away. They’re here, and they’re ready. Take the time to develop your unique process – rushing through the steps to “check the box” is ill-advised.  

The best results are always aligned with timely, quality claims communications, says Martin Ellingsworth, executive managing director, P&C insurance intelligence at J.D. Power. “You can never go wrong with the foundational underpinnings,” he said.

Let's have a toast to a touchless claims future. 

Cheers! 

The challenges drivers and insurance companies face in 2023 are multifaceted—ranging from rising premiums to delayed repairs. As the auto industry navigates these obstacles, it needs to identify potential ways to enhance customer satisfaction.

This article analyzes the current car insurance landscape, drawing from the recent MarketWatch Guides article.

Rising Car Insurance Rates

Insurance rates have been steadily climbing, posing a burden for drivers. Factors include external elements beyond the control of insurance providers.

Supply chain disruptions, chip shortages and labor shortages have sharply increased car repair costs. These challenges have resulted in extended repair durations due to limited parts availability. Repairs that once took days to complete now span weeks. The effects of the pandemic and global economic factors exacerbate these issues.

Insurers and repair facilities must collaborate more effectively to address the shortage of parts and labor. Anticipating potential supply chain disruptions and identifying alternative solutions could mitigate the impact on insurers and policyholders.

See also: Can Insurers Connect to the Connected Car?

Impact of Sluggish Claims Process on Customer Satisfaction

The J.D. Power study for 2022 on U.S. Auto Claims Satisfaction reports that the delay in processing claims has hurt customer satisfaction. Insurers must explore new options to enhance customer satisfaction, such as streamlining the approval process, to reverse this trend. Improved communication at every stage of the claims journey is also crucial.

Insurance company involvement in repair decisions has come under scrutiny. There are accusations of insurers pressuring repair facilities to use generic parts or cut corners to save on costs.

In response to these concerns, the state of Connecticut proposed House Bill 5366. It prohibits insurer influence over collision repair decisions at auto repair facilities. Though the bill did not pass, it highlights the debate surrounding insurance company interference in repairs.

How can insurance companies build trust with their customers in this context? To do so, insurers should maintain transparency in their dealings with repair facilities. Also, they should prioritize customer safety and satisfaction over cost-saving measures.

Insurance companies can strengthen customer relationships and enhance their reputation by fostering a culture of openness and accountability.

Customers Switching Car Insurance Providers

As frustrations mount, more customers shop for new insurance providers and switch coverage. This increase in insurance shopping and provider-switching rates has coincided with a decline in advertising by insurance companies.

Insurance companies should reconsider their advertising and retention strategies. With customers frustrated by rising rates and exploring new providers, insurers must enhance how they convey their services' value and retain current customers. Offering incentives for long-term customers could also boost loyalty.

Telematics Adoption: A Silver Lining?

There is a ray of optimism in the acceptance of telematics. Programs that offer usage-based insurance have become popular with drivers as they provide incentives for safe driving by monitoring driving behavior.

The availability of more driver data enables insurance providers to simplify coverage and expand customization choices. As a result, insurers can offer more personalized policies that better reflect individual driving habits, leading to fairer pricing and lower overall premiums.

Furthermore, telematics can reduce accidents by encouraging safer driving, benefiting drivers and insurance providers in the long run.

See also: Automakers Build New Insurance Future

Final Word

The car insurance industry is grappling with increasing costs and growing customer dissatisfaction this year. Insurance companies can better navigate their challenges and work toward a more customer-centric future by adopting strategies such as providing telematics, fostering transparency and streamlining claims processes.

The annual Global Priorities survey by the International Insurance Society found that industry executives are feeling more prepared than in the previous two years on a whole range of issues: cybersecurity, climate change, inflation, competition for talent, data security and expense management.

In addition, major concerns from prior years — how to cope with the pandemic and how to adapt to a hybrid workplace — have greatly diminished.

The major uncertainty among executives is geopolitics. What will happen in Ukraine? Will China invade Taiwan? Will the trend toward what the report called "backsliding democracies" continue? 

While I'm delighted by the upbeat responses to the survey, I'd add one uncertainty to the list, echoing what an executive said in a webinar that the IIS held to analyze the report. Worried about misplaced complacency, he said: "I'm surprised anyone can feel comfortable about the level of cybersecurity protection that insurers have in place."

To tick through the main numbers in the IIS summary: 

• Cybersecurity: "In 2021, 83% of executives who were prioritizing cyber security said they felt their company was prepared to do so. By 2023, that number increased to 94%."
• Climate change: "In 2021, 62% said their company was prepared to address the effects of climate change, and, by 2023, 78% said the same."
• Inflation: "89% prepared in 2021, to 93% in 2023."
• Competition for talent: "59% to 79%." (One executive said in response to the survey: “We are faced with numerous retiring subject matter experts without having new talent coming in behind them to continue moving the business forward from here. Huge legacy knowledge bases will be disrupted, shrunk, or lost altogether.”)
• Data security: "87% to 97%."
• Expense management: "94% to 97%."
• Hybrid workforce: "46% of executives were prioritizing a hybrid workforce in 2022, but that number dropped to 14% this year."
• COVID: "In 2021, the pandemic response was the top economic priority, with 63% of executives saying that the pandemic recovery was one of their top-three economic issues. In 2023, however, the pandemic is a top-three economic priority for only 11% of executives."

To put the report in perspective, IIS President Josh Landau conducted a webinar with two longtime stalwarts of the IIS: Andreas Berger, CEO, Swiss Re Corporate Solutions, and John Spence, retired regional head, M&A and strategy, Generali Asia. This is where Spence said he couldn't understand anyone feeling comfortable about the current level of cybersecurity. 

"I was surprised by the answers around cybersecurity and the sort of view that insurance executives felt they could cope with cybersecurity," he added. "I don't know where that strength of position comes from. Cybersecurity really has to be at the top of the agenda.... And I'd encourage significant caution and investment to deal with that issue." 

Berger added his own note of caution about inflation. "Inflation should remain a top concern for executives this year and beyond," he said. "Global inflation rates are easing more slowly than desired... [and] executives in service industries like ourselves in insurance, where labor is the key input, will have to really watch [wage] inflation [to see if it] is set to stay structurally higher over the longer period."

Concerning geopolitical uncertainties, he said he sees them leading to three profound changes that will play out over many years in how the world economy operates — and, thus, in where the opportunities for insurers will lie:

"Number one, it's a reorientation of global supply chains to insulate economies against future trade disruptions. That's what we see. Number two, added impetus to the green transition, given worries of energy security that Russia's invasion of Ukraine has sparked, and number three, potential risk of global food security."

Spence emphasized the need to focus on acquiring AI talent. "Insurers need to be thinking very carefully about the people they have on their teams that are equipped to understand the transformation or issues associated with AI, ... [who are developing the use cases] that are improving customer service, that are personalizing products, that are optimizing the pricing and detecting fraud and reducing costs.... It's a significant challenge, and insurers who in many ways have been very slow to adopt new technologies will need to move rapidly in this new area or be left behind," 

That's a lot for you to sort through, I know, and I encourage you to dig into the report and watch the webinar. But here's my summary:

Insurers have been working hard for years to tackle a whole array of problems and can feel good about being better prepared but still need to stay on alert, especially about cybersecurity and inflation, in addition to the scary possibilities of today's geopolitics.

Cheers,

Paul

It is an exciting time for the life and health insurance industry. Traditional and new entrants are introducing novel coverages and opening distribution channels to build market share, expand coverage availability, manage risk, save costs and improve the health and wellbeing of the people they serve. Ultimately, the real winner is the consumer, who is benefitting from creative propositions offering enhanced financial protection. 

Three new business trends are particularly worth noting. The first centers on ecosystem partnerships. The second is the convergence of group and individual offerings, and the third is the emergence of new opportunities for critical illness (CI) cover. 

Trend 1: Ecosystem Partnerships

Insurers are developing ecosystem partnerships with non-traditional insurance market participants to create and distribute new products and services, reach new markets and ultimately improve engagement with their policyholders. Some examples: 

• One company supplies a single point of contact to collect data using a contactless video-based software solution. The company deploys machine learning to capture micro changes in facial skin color to measure stress, heart rate, blood pressure and other metrics. 
• Another business addresses the challenge of collecting data from multiple sources. After securing customer permission to collect personal healthcare data, the company provides insurers with a complete and unified view of a consumer’s health, medical and wellness information. 
• A clinical stage healthcare company is applying artificial intelligence and deep learning with dermoscopic imaging to detect within seconds skin lesions with a high risk of being cancerous lesions. Besides saving lives, the approach improves outcomes and reduces health claim costs. 
• One vendor offers eight online mental health treatment programs, each confirmed effective by at least one randomized controlled trial, to improve mental health while managing claim costs. Given the increase in depression since the onset of COVID-19, successful and cost-effective mental health programs are more necessary than ever. 

These new digital entities come from outside the insurance industry. They are joining the insurance ecosystem and working with insurers to create consumer propositions that enhance the customer experience, improve consumer health outcomes and ultimately strengthen the insurance value chain in areas such as underwriting and claims. 

Trend 2: Converging Group and Individual Coverage 

Propositions are emerging that blur the lines between group and individual cover, allowing the consumer to enjoy the best of both worlds. This convergence is occurring against the backdrop of a changing workforce and the explosion in freelance or “gig” workers. Broadly, group and individual insurance are converging in two different ways:

• Strategic archetype 1: Insurers sell individual products through the employer channel, thus tapping into the employee base as another conduit for alternative distribution.
• Strategic archetype 2: Insurers define criteria to combine disparate individuals into a group of their own and offer group products to them (as key decision makers) or voluntary-style products that provide individual choice with elements of group underwriting.  

An example of strategic archetype 1 is a group-focused startup offering employee benefits and rewards for working to improve physical and mental health. A proprietary gamified interface with a unique digital currency engages employees with a suite of health services, including employee assistance programs, mental health support, access to virtual physicians and more. The platform also offers the opportunity to “top up” traditional group benefits and add more individually selected products, effectively opening a new channel to make incremental insurance sales. 

An example of strategic archetype 2 is a digital insurance broker and robo adviser that offers income continuation to independent contractors and freelancers in case of illness, sick leave, disability or death. The platform gathers a disparate community of individuals (freelancers) and effectively recreates the employee benefits those individuals would have enjoyed were they employed in a more traditional arrangement.  

See also: Selling Where Life Happens

Trend 3: Expanding Critical Illness Coverage

CI provides a great canvas for innovation because insurers can experiment with a wide array of benefit designs, payment types and segment-specific strategies. The possibilities for consumer propositions are almost limitless.  

Medical innovation plays a significant role in CI product development. A greater understanding of illness and disease creates possibilities for insurance coverage, and insurers around the world are taking advantage. Four emerging areas of innovation include dementia benefits, defined disability benefits, precision medicine benefits and pre-early benefits.

Dementia benefits are evolving and taking various forms. For example, riders are expanding cover to include in-home care facility admission and caregiver support. Insurers are also offering benefits that cover services for preventing and detecting milder or earlier cognitive impairment and help senior citizens age in place to reduce the need for expensive nursing home care.

Defined disability benefits, also known as functional impairment benefits, are a hybrid of CI and disability coverage. For example, one company pays a lump sum for a specific defined medical event, based on the diagnosis and its severity, for those who otherwise would not qualify for traditional occupational disability. The tiered benefit covers a range of CI categories, from upper limbs to cardiac and respiratory events. 

Precision medicine benefits provide incremental coverage for higher-cost or specialized medical services for a particular disease. The approach enables insurers to create a comprehensive value proposition around a critical illness in highly competitive markets. As an example, one insurer offers an array of support services to help cancer patients financially, emotionally and physically. 

Finally, pre-early benefits expand traditional CI benefits to less critical but still important early-stage diseases. The expectation is that diagnosing diseases sooner will help the consumer secure treatment earlier to reduce the risk of disease progression to later stages.  

As medical innovation continues to advance, CI innovation must likewise advance to keep pace. 

Conclusion

Thanks to product and distribution expansion, life and health insurers are finding new ways to differentiate their brands. Fueled by innovation in technology, medicine and financial services, these advances will help shape life and health insurance in the years to come.

The post-pandemic years have not been kind to U.S. personal auto insurance underwriters. Drivers' return to the road, high inflation and several catastrophic events compounded by an auto parts shortage contributed to higher-than-expected claim costs. 

In 2022, the 10 largest publicly traded U.S. personal auto insurers with the exception of Progressive all reported combined ratios ranging from 103.8% to 119%. That means for every $100 in premiums, these insurers had to pay out between $103.80 and $119 in claims and expenses. Mutually owned State Farm also reported an auto-underwriting loss of $13.5 billion against $45.7 billion in premiums in 2022.  

To improve auto-insurance underwriting profitability, insurance leaders are turning to tried-and-true methods: raising rates, stricter underwriting requirements and expense management. 

However, auto insurance is a highly elastic good. When prices rise, consumers will start switching in an effort to save. Allstate expects only 85% of its annualized written premium increases to be realized as customers modify policy terms or don't renew. Some auto insurers are also starting to lose market share. In a recent SEC filing, Berkshire Hathaway shared that GEICO's market share has declined from 14.4% in 2021 to 13.9% in 2022. 

Simon-Kucher expects customer churn and switching behaviors in auto insurance to increase sharply in 2023. In a recent Simon-Kucher project, 74% of personal P&C insurance customers said they are comparison shopping more frequently in response to inflation. More than half of these customers said they are likely to switch providers, and nearly 60% of customers said their policies included features they did not need or value.

As auto insurers hunker down to address their profitability challenges, some more aggressive players smell opportunity. These insurers are leveraging advanced customer segmentation, pricing accuracy and opportunistic marketing to grow market share. For example, Progressive is finding ways "to grow as fast as possible while delivering a calendar year 96 combined ratio." 

Underwriting discipline and expense management are important, but insurers must not neglect retention, opportunities to cross-sell and upsell to existing customers and ways to improve conversion. This is the time to play defense and focused offense using precision marketing techniques to protect market share and uncover untapped avenues of growth. 

Advanced segmentation and personalization

Instead of a broad-strokes approach to segmentation, auto insurers' segmentation efforts must be more granular, precise and strategic. Auto insurers must be able to position the right product to the right customer segment at the right time as part of a wider retention, cross-selling and up-selling strategy. 

For example, price-conscious customers can be offered telematics or usage-based insurance, while customers who are buying a home can be offered options to bundle policies in exchange for discounts or rewards. Data-driven approaches coupled with advanced segmentation techniques can uncover unmet customer needs, behaviors patterns and customer lifetime value for product development and new experiences. 

See also: Nonstandard Auto Insurance's Key Role

Feature bloat

Precision marketing techniques can also be used to address feature bloat, a phenomenon where executives include product features or attributes that they assume are valuable to their customers, but that in reality lead to overloaded products. Instead of adding value, these extra 'bells and whistles' cost too much, overdeliver, confuse and overwhelm customers. 

Insurers need to take a closer look at their products and their features to ensure they are aligned to customers' needs. Packing too much or too little into a product means the insurer is either not meeting clients' needs or hitting the appropriate price point. 

To capture customers in the current environment where insurers are increasing rates at a time of sharpening pricing sensitivities, optimized products are critical. Insurers products must have the right market fit, be compelling when compared with competitors' offers and communicate clear value to the target customer segment. This is the key to differentiating what increasingly seems like commoditized products to the consumer.  

Marketing efficiency

Auto insurance has one of the highest customer acquisition costs of any industry. P&C insurance analyst Adam Klauber estimates U.S. auto and home insurance providers spend more than $53 billion annually on commissions, customer-facing expenses and advertising to attract customers.  

To stay on the path to profitability and sustainable growth, auto insurers must improve marketing efficiency. There are customer segments in P&C insurance willing to pay for high-value insurance products, secure more coverage and upgrade to more comprehensive products and services. If insurance providers can identify these customers and find ways to engage them, these can become opportunities for growth. 

Using data-driven and advanced segmentation, auto insurers can also find ways to optimize the customer journey for conversions. For example, some customer segments might appreciate more personalized or human-assisted interactions. At certain junctures of their buying journey, these customers can be directed to an agent or representative.  

The current environment should be viewed as an opportunity for carriers to secure their book, retain their customers and capture new customers who are looking to switch.