Last week, we debuted our “Connected Insurance” webcast series with ““DISRUPTION: Technologies Transforming the Industry.”  I had the pleasure of serving as host and moderator, and by all accounts the session was well received. 

Our underlying theme for the session was how digital technologies, including AI, are transforming the insurance economy. More broadly, our expert panelists shared their perspectives on the state of digital transformation across the auto insurance ecosystem and views on  the technologies poised to revolutionize how the process works near- and long-term.

Participants represented four key inter-dependent industry segments:

• Collision repairers/MSO (Matt Ebert, CEO, Crash Champions) 
• Auto insurer claims management (Scott Kohl, AVP Claims, Kemper)
• OEM parts distribution (Dan Ducharme, senior manager, wholesale parts, VW America)
• Insurance economy platform provider (Marc Fredman, chief strategy officer, CCC Intelligent Solutions)

The premise of the session was this: A billion days elapse every year between when auto claims are opened and when claims are resolved. Consumers are losing patience with industries that don’t keep pace with modern experiences, and disruptors stand ready to deliver change. 

Several important observations became apparent as the discussion unfolded:

• Technology has and will continue to transform how business is conducted in every segment; the rate of change is accelerating and presenting its own challenges, including shortages of skilled staff 
• The new technologies having most impact across the entire ecosystem are telematics, auto photo inspection and computer vision, advanced driver-assist systems (ADAS) and electric vehicles (EVs)
• The companies in all four segments are focused on exactly the same outcome but are achieving it in different ways – they seek safe and proper repair of damaged vehicles, resulting in a positive customer experience and ultimately brand loyalty and retention 
• The collision repair industry has changed most dramatically over the past decade, driven by consolidation financed by private equity investors
• Digitization of the thousands of steps involved in the auto claims process, and integration between segment participants, is enabling the customer experience associated with auto claims to begin to approach the “Amazon standard" 

At the industry segment level, the following panelist comments struck me as particularly insightful and informative:

Collision Repairers/MSO

Matt Ebert noted that the new technologies are definitely making the “front end” of the auto claims process faster, but the offset for collision repairers is that the greater complexity of vehicles (e.g., ADAS) creates new challenges for repairers; even what used to be a simple bumper repair may now involve scanning and recalibration).  

Matt also pointed out that repairers are affected by the large number of different repair requirements from carriers and OEMS and often find themselves “in the middle” of the dynamics that exist between some insurers and OEMs. On the subject of OEM certified repair networks, Matt said that, while his participation in these programs helps brings some incremental repair volume to his repair shops,  particularly for higher-end vehicles, to him right now participation is more about credibility with insurers and consumers.

See also: Key to Transformation for Auto Claims

Auto Insurer Claims Management

Scott Kohl made the point that what was only recently thought of as innovative in auto claims is now table stakes and that planning cycles that used to be in the five-year range are now only two to three years. He added that there is a constant need to be ready to pivot quickly in response to events and market changes. He also stressed the importance and value of using AI to connect the supply chain for multiple use cases including automating accident management triage, parts ordering from real-time first notice of loss (FNOL) and total loss identification and resolution as that percentage continues to rise toward 25%.

OEM Parts Distribution

Dan Ducharme also referenced automated parts ordering using on-board vehicle telematics to pre-position parts inventory based on vehicle and damage detail and geo-location to reduce overall “keys to keys” time for customers. He also reinforced that auto makers are focused on keeping customers for life, which further emphasizes the importance of customer experience and satisfaction.

Insurance Economy Platform Provider

Marc Fredman pointed out that while some of us talk about emerging technologies and future auto repair process capabilities, a good deal of it is happening and available today; he indicated that CCC has 30,000 customers using their technology across all segments represented here. Marc also indicated that the building blocks for an Amazon-like experience exist today, as exemplified by the CCC Engage and CCC Car Wise solutions in use in approximately 25% of their shops for sharing photos and estimates between consumers, insurers and shops and enabling insurers and consumers to schedule repair appointments. He said that over 200 million shop calendar entries have already been made in this way. Marc also said that insurer adoption of digital solutions is significant, with some insurers managing 25% to 30% of assignments. Other examples of digital building blocks already in market include 50 million text messages that employ AI and enable insurers to better manage claims intake and provide text messages to consumers tracking repair status and “ready for pickup” notices.

The Amazon-like Auto Claim Experience

Having worked in the claims technology space for more than 35 years, I find it stunning to look back and realize all the improvements that technology has already enabled. It is even more exciting to realize how much more improvement can be expected and see the rate of that change accelerating. This change is driving collaboration and cooperation between key participants in this extensive supply chain to a level until now unimaginable. 

The final pieces of technology required to achieve the long-elusive goal of delivering straight-through-processing of auto claims are now falling into place. A couple of prime examples include artificial intelligence and computer vision to assess damage and produce estimates from photos and digital claims payments speeding settlements to insureds, vendors and lenders. 

A truly Amazon-like auto claim and repair process is finally at hand.

Traffic is back. Are insurers ready for the inevitable rise in auto accident claims?

Motorists filed fewer claims during the pandemic, as lockdowns reduced the number of cars on the road. Data from Allstate, GEICO and Progressive show that claims frequency fell by 27% to 30% in 2020 for physical damage claims and 25% to 30% for bodily injury.

But those numbers don’t tell the whole story. Driving in the U.S. became more dangerous last year. As traffic volumes declined, risky driving behaviors, especially speeding, surged – and so did traffic fatalities: up 8% in 2020 over 2019 in total numbers and up an astonishing 24% per 100 million miles driven. 

The grim trend has continued this year. For the first five months of 2021, motor vehicle deaths increased 21% over the same period in 2020. 

At the same time, those in insurers’ supply chains and at many tier-two and -three carriers have reduced staff. Some fear that if reckless behaviors persist (and even if they don’t), claims will surge even after the country begins to return to normal. There is already evidence that an increase in claims has begun.

This could swamp insurers’ capacity to respond in a timely manner and ultimately increase premiums. Insurers can prepare for the future by taking a few measures, such as: 

Continuing to roll out straight-through processing (STP) for low-complexity claims

Carriers learned that the claims process can be simplified through an integrated partner ecosystem by providing the right digital tools for their insureds. This moves simpler claims through the process with little intervention, allowing adjusters to focus on the more costly, complex claims. By implementing true STP automation in key claim activities (e.g,, first notice of loss (FNOL), document management, customer communications, fraud and subrogation predictive analytics and payments) and across certain claim types, carriers can enhance the customer experience while increasing efficiency. That’s a big reason why adoption of STP is rising across all lines of business.

See also: Power of Partner Ecosystems

Using chatbots, texts and apps to facilitate a quick and frictionless claims experience for customers and service providers 

Customers have become more willing to engage digital tools during the claims process, which allows them to participate in creating their own claims experience. These solutions drive down cycle time, which is a primary driver in customer satisfaction. They also free employees so they can use their greatest assets -- empathy and emotional intelligence – to enhance customer experiences. For example, Indian insurer Bajaj Allianz lets customers submit photos of vehicle damage via a mobile app. The insurer uses AI and machine vision to provide claim assessments within 20 minutes. If the customers agree, the funds transfer straight into their accounts.

Providing risk management advice such as storm alerts and hazardous road warnings to help customers avoid losses in the first place.

Insurers can channel this advice to customers via apps to encourage safe driving or to protect their insured property. They can even nudge customer behavior by rewarding them for being safe. As our recent paper, Insurance in the Age of Instinct, noted, insurance touchpoints will become fluid, varied and responsive and ultimately allow experiences and services to be tailored to the individual. Using data to assess risk in real time by predicting the likelihood of adverse events transforms insurance models from claims-paying activities to claims-prevention services.

Springboard for innovation

But why stop there? Now is the perfect time for insurers to consider even more transformational strategies, such as shifting from traditional actuarial underwriting models to pay-as-you-drive (PAYD) models. In 2020, most new vehicles sold in the U.S. could connect to the internet, compared with just 5% in 2016. The real-time data on driver behavior provided by telematics improves on legacy actuarial underwriting models by providing more accurate rating risks and taking the subjectivity out of underwriting a policy.

Insurers have taken notice. PAYD is gaining momentum – one tier-one carrier had six times more interest in its pay-per-mile program in 2020 versus 2019.

Other transformational strategies gaining momentum include parametric insurance, which is tied to indices like wind speed or precipitation, rather than losses sustained. 

The most forward-thinking insurers will adopt all these innovations, and more. But the most successful companies will be the ones that also reskill and upskill employees to master the new technologies and roles. Lifelong learning is a requirement in an industry that is becoming more dynamic by the day. A workforce that is adept at acquiring new skills is now a big competitive advantage. And remember, the more an insurer is known as a believer in lifelong learning, the easier it is to attract a new breed of talent to the industry.

See also: Innovation in Fraud-Detection Systems

As we continue to grapple with the pandemic, it’s important to recognize and adapt to the new normal. By adopting innovative technologies and new ways of working and learning, insurers will be ready for an increase in claims -- but more importantly, will be prepared to capitalize on opportunities emerging in years to come.

What single problem must all engineers solve? Hint: The answer is so simple, you can’t even see it.

The paradox of invisibility

A firefighter may be worth a million dollars per hour when there is a fire and her or she courageously saves lives and salvages property. The value of the firefighter is derived from the severity of the fire. On the other hand, a fire protection engineer can design a thousand buildings that will never burn. But, in the absence of the fire, the true economic value of the engineer cannot be measured.

This is the paradox of invisibility.

Much the same can be said of aircraft that do not crash, bridges that do not collapse and pandemics that do not spread.

What single problem must all engineers solve?

Answer: Engineers remove risk from complex systems. That’s it. This simple fact is true for every single engineer and may even serve as an adequate definition for “engineering” at large. Engineers increase human productivity by reducing the risk to human life and property when confronted with the natural constraints such as gravity, temperature, impact, etc. The value of engineering is literally immeasurable in the absence of the disaster. Hence, it’s a problem so simple you cannot even see it. 

But wait, risk can be measured! Insurance companies and financial institutions do it all the time. It turns out that engineers think along the same lines as all risk managers and may deliver solutions that integrate seamlessly into the same computational analysis.   

Engineers resolve risk in three ways

Engineers follow a similar thought pattern when addressing problems as the actuary in formulating insurance products. This is so natural that we often don’t recognize what they are doing it.

1. Engineers invent ways to identify and define the existence of a peril.
2. Engineers invent ways to reduce the probability that the peril will manifest. 
3. Engineers invent ways to reduce the severity of consequences if the peril does happen.

Each of these actions is identifiable, verifiable and measurable. Each – separately or together -- can increase the efficiency of existing insurance products and facilitate the creation of new or expanded insurance products. Engineers validate the data that insurance depends on. Once validated, the risk resolution may be duplicated endlessly for similar risk exposures and standardized at near zero marginal cost.

See also: A Quarantine Dispatch on the Insurtech Trio

The Innovation Bank

At the Innovation Bank, we are setting up a network platform that uses a combination of game mechanics, blockchain technology and actuarial math to decentralize the engineering and science professions. In the case of fire protection, the Innovation Bank would curate the validated claims of all fire protection engineers, which can be analyzed to estimate how much risk has been removed from the “fire economy.” This value can be represented as a cryptographic token (on a dedicated blockchain) that may be purchased by banks, insurance companies, municipalities, corporations and property owners to access the database to better understand their specific risk exposures. The value of the tokens compensates the engineers to perform more comprehensive fire safety surveys and mitigation strategies. This positive feedback loop eventually can reduce total risk to near zero.

The world is on fire

Fire is only one peril related to one engineering discipline. The reality that confronts civilization today includes multiple complex global systemic risks affecting nearly every facet of life on Earth. These include climate change, pandemics, political instability, grinding debt and wealth inequality. 

To untangle every contributing risk exposure and replace it with comprehensive solutions that do not break the bank, we hope to introduce a parallel financial system that hedges the one currently being stretched to the limits. A digital token that represents engineering and scientific risk mitigation would be mutually convertible with national currencies and therefore taxable and transparent to regulatory standards. The two currencies would hedge each other.

Conclusion

The insurance industry faces daunting challenges, including inflation risk, cyclical risk and a plethora of systemic risk exposures. Fortunately, the single problem that all engineers can solve is the reduction of risk – if that reduction can be measured. 

The Innovation Bank could be finished within a matter of months for mere Satoshis on the dollar. 

Please continue reading articles from the Ingenesist Project at https://ingenesist.com. Our juried paper published by the American Society of Professional Engineers may be found here: The Innovation Bank; Blockchain Technology and the Decentralization of the Engineering Professions. Also, please see our other publications at: Select Publications and Lectures.

The Talent Crisis — and Opportunity Paul Carroll, Editor-in-Chief of ITL A recent survey by PwC found that nearly two-thirds of employees in the U.S., including executives, are looking for a new job. That number is stunning. It suggests that insurers need to play some serious defense, to keep employees happy and on board and to keep competitors from poaching talent. But it also illuminates an opportunity to play offense. If lots of employees are looking for a new position, then, by all means, let’s go get the best we can. continue reading > Majesco Webinar Tune in to this month’s webinar as industry experts reveal insights to next-gen distribution management that will help insurers grow and retain their distribution channels.  Register Now SIX THINGS Embedded Insurance Reaches Tipping Point by Meitav Harpaz Embedded insurance is the way forward for many online businesses to offer confidence to consumers in these uncertain times. Read More Growing Number of Uninsurable Risks by Barry Rabkin Uninsurability of certain risks has been happening more frequently over the decades -- and cyber risks look like they may not be insurable. Read More Climate Change and Product Liability by Christopher McKeon Climate change risk is emerging within the product liability discipline in a pattern seen previously with mass tort litigation. Read More Digitizing Reshapes Home Insurance by George Hosfield A survey of the top 50 U.S. property insurance carriers shows how digital disruption, innovation and the pandemic are affecting the industry. Read More Blockchain Smooths Subrogation by Sanjeev Chaudhry Blockchain is poised to rewrite the rules of competition in subrogation by streamlining operations, enabling data to be shared seamlessly. Read More Time to Rethink the Approach to Risk? by Bethany Greenwood A major survey finds that the pandemic and ensuing lockdowns have transformed business leaders’ views and expectations of insurance. Read More Minimize Fraud, Lower False Positive Rates and Increase Automation for Low Value High Volume Claims Using Halo Based AI Sponsored by Daisy Intelligence This whitepaper explains how using Halo-based AI minimizes insurance fraud, increases automation, lowers false-positive rates and delivers excellent financial results. Read More MORE FROM ITL Resilience Ratings: Triple-I Unveils Way to Measure Communities’ Risk Levels Peter Drucker once famously said that “what gets measured gets managed,” and the Insurance Information Institute is unveiling measures for U.S. communities’ resilience against natural disasters. In this webinar, ITL Editor-in-Chief Paul Carroll and the Triple-I’s senior economist, Michel Leonard, discuss what the measures cover, how individuals and communities can use them and where the Triple-I will take them from here. Watch Now SEPTEMBER FOCUS: Life Insurance   "...It seems to me that the lines will increasingly blur between life insurance and financial management, given that life insurance is an important financial asset; people often think about their finances, and life insurance can become a natural part of that focus. I could also see the trend toward embedded insurance expanding the life insurance market — why couldn’t a term life policy be, for instance, embedded in a mortgage when someone buys a building, to make sure the purchase is secure even if something happens to the buyer? Over the years, I’ve had people tell me life insurance is boring. I don’t see it that way at all." Keep Reading Partner with ITL to create expert thought leadership content. Custom Content Promoted Content Display Advertising Custom Webinars Monthly Topic Sponsorships ITL Partner Packages and more Learn more and get the 2021 Media Kit GET INVOLVED Write for Us Our authors are what set Insurance Thought Leadership apart. Get Started SPREAD THE WORD Share Share Tweet Forward SUBSCRIBE TO SIX THINGS

This article was written by Ronnie Klein for the International Insurance Society, a sister organization of Insurance Thought Leadership, under the umbrella of The Institutes. To see more IIS articles by Ronnie and other IIS experts, visit internationalinsurance.org.

There is a saying in German: “Traue keiner Statistik, die du nicht selbst gefälst hast.” This translates as, “Do not believe any statistic that you have not forged yourself.”

Many credit this saying to Winston Churchill, but Nazi propagandists actually made up the quote and attributed it to Churchill as a way of impugning him as a liar. It appears that “fake news” is not a new phenomenon.

An example of misleading statistics is when determining whether to take a medical test for a rare but serious disease like spina bifida. This rare disease causes the spine of a baby to form improperly and can lead to serious mobility impairments and possible organ malfunctions. Many doctors will recommend that the patient undergo a blood test to detect this disease. The test has improved over time and is now 95% accurate.

This sounds like an easy choice. The test is 95% accurate and can detect a horrible disease. But let’s explore.

The probability of contracting the disease, according to the U.S. Centers for Disease Control and Prevention (CDC), is 1 out of 2,758. Therefore, out of 1 million pregnancies, there should be approximately 363 babies, or 0.03%, born with spina bifida.

Assuming that all 1 million women opt for the test and that no false negatives occur, there will be 363 actual positives and about 49,982 false positives ((1,000,000 – 363) x .05) for a total of 50,345 positive tests. Receiving a positive result now means that the baby has a 363 in 50,345 chance of having spina bifida — or 0.7%.

Does this sound like a test with 95% accuracy?

Further, once a woman receives a positive test for fetal spina bifida, she must undergo follow-up tests that are a bit more invasive to more accurately determine the status of the baby. However, those additional tests take time to schedule and to generate results.

How much stress is the woman under during this time? What effect could this have on the  unborn child? None of this is usually discussed with the mother.

How can a test that is 95% accurate change the probability of contracting the disease from 0.04% (363 out of 1 million) to 0.7% (363 out of 50,345)? Should an expectant mother take a test for a disease that will affect 363 babies out of 1 million? Armed with the  correct statistics, an expectant mother will be much better prepared to make an informed decision.

COVID-19 statistics can also be misleading. The most common misstatement is that the disease only kills the elderly. According to the most recent data from the CDC at the time of this writing, 80.5% of COVID-19 deaths have occurred in people ages 65 and over in the U.S. On the surface, this seems like a daunting fact.

Of the nearly 540,000 U.S. deaths attributed to COVID-19 as of this writing, almost 435,000 are from people age 65 and over. Breaking it down further, 58% of all COVID-19 deaths occur in  people age 75 and over. It is no wonder that most of the attention has been given to the most vulnerable people in these age groups. Why worry about those under age 65 when only 20% of COVID deaths can be attributed to this cohort?

Examining mortality by age for all causes shows that the statistics for COVID deaths do not vary greatly from all-cause mortality. Said another way, COVID deaths by age are highly correlated to deaths by all causes (see Figure 1).

Figure 1: COVID-19 Mortality vs. All-Cause Mortality by Age Group

Limiting the analysis to age groups over 25, which basically eliminates infant mortality and teen auto accidents, shows an even stronger correlation (see Figure 2).

Figure 2: COVID-19 Mortality vs. All-Cause Mortality by Age Group (25+)

While the media is quick to broadcast that approximately 80% of COVID-19 deaths occur in people over age 65, it fails to state that, in a given year, almost 75% of all-cause mortality occurs in the same age group.

Exploring the data for those ages 25 and up shows that people ages 75 and over account for 59% of all COVID-19 deaths and 56% of all-cause mortality – not far off. This virus is not only a worry for older people, it affects younger adults in a similar proportion to other causes of death.

What this means is that the target life insurance-buying population (people ages 30-60) should be very interested in purchasing life insurance to protect against this and future pandemics. COVID-19 increases mortality for adults of all ages at similar percentages. However, this very important fact is not widely broadcast in the news. And the life insurance industry has remained relatively silent on this topic, as evidenced by the continued flat sales of life insurance during the pandemic.

In the largest life insurance market in the world, the U.S., premium sales in 2020 actually dropped while number of policies showed a slight increase. Considering that there are no infectious disease exclusions in the vast majority of life insurance policies and that the world is in the midst of the worst pandemic in the past 100 years, one would think that sales of life insurance would be skyrocketing.

Every life insurance sales person will be familiar with the term “share of wallet.” Potential customers only have so much disposable income, and only a portion of that can be allocated to life insurance. While the pandemic should certainly highlight the need for life insurance, the ensuing financial crisis brought on by travel restrictions, hotel closures, restaurant closures and other lockdowns make certain that a person’s share of wallet is more focused on food, housing, medical supplies and other essentials. Life insurance has  been moved further down the list.

A survey performed by the U.S. Census Bureau revealed that more than 60% of low-income families experienced “income shocks” during the pandemic. This includes food insecurity and delinquencies on rent or mortgage payments. The percentage is even higher for families with children (see Figure 3).

When choosing between paying rent or purchasing life insurance, there is no question at all. However, as bad as things are for these families, it will become much worse if the breadwinner dies due to COVID-19.

Figure 3: Share of Families Experiencing an Income Shock by Household Income and Presence of Children

The U.S. Congress recently passed the American Rescue Plan, which provides aid to all citizens and disproportionately helps low-income families. A family of four earning less than $150,000 per year received $6,400 in cash and possibly other benefits, including extended unemployment, tax credits and lower health insurance premiums.

If a family of four is earning $50,000 per year, this is more than a 12% increase in pay — and the money has already arrived. Similar packages have been offered in most developed countries in the world that are experiencing the same adverse mortality and economic downturn as the U.S.

These low- and middle-income people are suffering from a huge protection gap. One estimate places the middle-market protection gap in the U.S. at $12 trillion (see Figure 4). This is exactly the market that the life insurance industry has been talking about addressing, but failing to reach, for decades.

Wouldn't this be a great opportunity to approach these people, as they receive a relatively sizable lump sum of cash? A small term policy that costs less than one-per-thousand for most of these ages would help to protect those families most in need.

Figure 4

But the window for action by the insurance industry is short, as these funds have already been distributed. This money will not sit around waiting to be spent on life insurance.

Selling pure protection to the middle markets during a pandemic is a great opportunity for the customer and the insurer. It provides much-needed protection during a time when excess deaths due to COVID-19 in the U.S. are estimated at about 16% (see Figure 5). It benefits insurers as a way to reach a market that has thus far eluded the insurance industry. And, it will help inform the middle markets of the importance of life insurance and may win over many customers for life.

Figure 5

The life insurance industry has long lived by the motto, “Let sleeping dogs lie.” During a 1-in-100-year pandemic, would it be worthwhile to attempt to make a change and tout the industry’s many benefits – especially to middle-income families? For example, would this be a good time for life insurers to contact all of their existing policyholders to remind them that policies are valid for death due to COVID-19? In-house lawyers can put in all of the caveats such as, “assuming all premium payments are current, assuming the policy is not accident-only, etc.”

J.D. Power performed a life insurance survey in late 2020 and concluded that “…a combination of infrequent client communications and a pervasive perception of high cost and transaction complexity have suppressed consumer interest and customer satisfaction with life insurance providers.”

Following the results of the survey, Robert Lajdziak, a senior consultant for J.D. Power, said that policyowners’ satisfaction with their life insurance products declines the moment the sale is completed. Lajdziak showed his surprise that this trend would continue during a pandemic and implores the industry to “rachet up” its client contact, not just its communication with agents.

To some, telling customers that they are covered for death due to disease is not necessary — but is this really the case? Just one Google search with the tagline, “Does life insurance pay for COVID-19 death?” will show how many articles have been written on this subject.

Why do customers need to get this information from a third party? While there may be risks to offering it to in-force policyholders, the benefits of this positive communication could dramatically outweigh these risks.

The life insurance industry protects policyholders from the financial hardships of premature death or disability of a breadwinner. This is especially important during a pandemic. However, sales of life insurance have been flat in most mature insurance markets for decades.

If a pandemic that is responsible for about an eighth of all deaths of people ages 25-64 cannot generate interest among the general population to purchase insurance, at a time when lump-sum stimulus payments are being made to lower-income earners, it is difficult to imagine what will cause an increase in sales. But consumers will not run to purchase this insurance. The industry must think of a coordinated, thoughtful and compelling message.

Epsilon Marketing estimated that there are about 50 million middle-market households in the U.S. A survey performed for this report revealed that reaching the middle market was a top priority for 25 of the 35 life insurance companies that responded. This survey was performed in 2014, so these companies and others had approximately seven years to work out a plan to reach this market.

Now is the time to “pull out all stops” and market aggressively. Doing that will generate sales and create an entire class of new life insurance purchasers who will be able to tell positive stories in the future. Starting this process may be as simple as communicating with existing policyholders about the benefits of their policies. Word of mouth among friends may be the best sales channel to reach the underserved middle markets and to help close the protection gap.

Selling more life insurance during a pandemic can bring peace of mind to customers and  help protect their families. Yet, with all of the talk about new technologies to market, underwrite and speed policies to customers, there has been virtually no perceptible increase in life insurance sales.

This can be easily evidenced by QualRisk’s assessment that, in 2020, all-cause mortality increased in the U.S. by 16%, but there was only a 3% increase for individual life insurance. Some in the industry may look at this as a favorable outcome. What it really shows is the vast protection gap that exists in the U.S. and in all mature insurance markets in the world. It is time to do something differently and reach underserved markets. Now is a perfect time to begin.

Read more at internationalinsurance.org.

This article was written by Joan Lamm Tennant for the International Insurance Society, a sister organization of Insurance Thought Leadership, under the umbrella of The Institutes. To see more IIS articles by Joan and other IIS experts, visit internationalinsurance.org.

As the world grappled with the overwhelming challenges attributed to COVID-19, racial and social injustice and dysfunctional geopolitics throughout 2020, many observers anticipated that reliance on the ESG framework for establishing commitments to all stakeholders would fade. To the contrary, 2020 ushered in a year whereby the ESG framework provided a strategic and cultural road map for global corporations to adapt, navigate and emerge from 2020 with their businesses not only functioning but thriving. No longer are leaders debating the merits of ESG as a framework for creating long-term value for all stakeholders. Rather, a sustainability plan of action designed around ESG is widely accepted as an imperative for moving forward. We now turn to 2021 and the years ahead to determine if these plans become a catalyst for widespread change in why and how we conduct our business.

Year of Commitment

In 2020, ESG went mainstream among corporate leaders, and many within our industry made public commitments to all stakeholders to be a force for good in the environment and society at large. Companies began by establishing a “new” purpose acknowledging all stakeholders and articulating the impact they want to have in the world. With regard to the environment, one example is Aviva’s bold commitment to tackle the climate crisis. Amanda Blanc, Aviva Group Chief Executive Officer, said, “We have a huge responsibility to change the way we invest, insure and serve our customers.”  The commitment goes beyond Aviva’s footprint and investment strategy by extending into their core insurance/underwriting operations. By the end of 2021, Aviva will stop underwriting insurance for companies making more than 5% of their revenue from coal or unconventional fossil fuels, unless they have signed up to the Science-Based Targets initiative (SBTi), a collaboration between CDP, World Resources Institute (WRI), the World Wide Fund for Nature (WWF) and the United Nations Global Compact (UNGC), whose goal is to establish science-based environmental target setting as a standard corporate practice.

Both Swiss Re Group and Zurich Insurance Group also established their respective climate commitments by relying on a multi-prong strategy covering their physical footprint, asset management and re/insurance. Moving beyond their corporate footprint, Swiss Re made a public commitment to reach net-zero emissions by 2020 across the whole business, including asset management and re/insurance. Mario Greco, Zurich Insurance Group’s chief executive officer, sets a high standard by stating, “We want to be known as one of the most responsible and impactful businesses in the world.” Regarding the core insurance business, Zurich goes beyond a pledge to understand and monitor the carbon intensity of their underwriting portfolios and developing key metrics to support alignment to a 1.5°C future by also committing to helping their customers successfully navigate the transition.

As it pertains to societal issues, insurers' commitments are equally bold, addressing the needs of employees, customers and vulnerable people at large. One insurer supported emerging digital trends with a new generation of products and services that deliver the best solutions and experiences while maintaining ethical use of customer data (e.g., personal data will never be sold or shared without the insurer being transparent with customers). Digital was recognized as a means for not only serving existing customers better but reaching the disenfranchised, as well.

Commitments to employees went beyond a safe physical presence to include an environment conducive to the employee’s success and mental well-being. Employees were promised meaningful work with a clear purpose in a safe, attractive, flexible and inclusive work environment where everyone can contribute. Access to training and skill development needed to succeed in a digital business environment and a culture of inclusivity, collaboration and creativity became core.

As for vulnerable people at large, insurers committed to community outreach, using digital to reach and support the underserved and to deliver resiliency programs in developing countries and poor communities.

In terms of governance, companies began with a pledge toward achieving diverse board representation and in many cases set forth specific targets. Aside from board composition, directors engaged in governing all ESG matters by providing oversight of progress toward delivering on stakeholder commitments as well as oversight of material ESG-related risks (e.g., supply chain disruptions, energy sources and labor practices). Boards also seek to be informed about the company’s approach to dealing with investor requests for ESG-related engagement and external disclosure and requests from emerging ESG-ratings services (e.g., the proxy advisory firm ISS’ new “Environmental & Social Quality Score”).

In summary, 2020 was the year of recognition that a sustainability plan designed in accordance with the ESG framework is not only a force for good but is critical to creating long-term value. The absence of a sustainability plan will likely have reputational impacts and result in significant public, investor and stakeholder relations risk. While companies will consider the value proposition of ESG initiatives relative to other business priorities and opportunities, it is important to recognize that the value derived from ESG initiatives will continue to develop, especially as more institutional investors consider sustainability as an investment priority and more companies take an active but targeted approach.

An Era of Action

The year ahead will be a year of corporate action with accountability at the forefront. Global hopes are high that corporate leaders will play a significant role in building a better future alongside governments, civil society, non-governmental agencies and other such actors. But corporates face a paradox. Corporate leaders are increasingly accepting responsibility for their social, environmental and economic impacts, yet they are not in direct control given the systemic nature or the fact that the impact falls upstream and downstream in their value chain. Consequently, corporate engagement with other external stakeholders is imperative. Business leaders now recognize the importance of not just associations but deeper collaboration to drive progress on common objectives. Surely, the COVID-19 pandemic has demonstrated the power of collaboration between government, the private sector and civil society as well as the unfortunate consequences of its absence. The environmental and societal problems that we face are problems of the global commons. Acting alone, even if intentions are good, will prevent a globally optimal outcome.

• Imperative of collaboration to drive needed system change — Collaborative research conducted on behalf of the Sustainability Transparency Network (STN) highlighted trends and best practices for corporate practitioners. Companies are being more selective and strategic when it comes to collaborations and moving away from general participation to being an active piece of the puzzle in areas where they have expertise. At the same time, collaborative peer initiatives focused on sustainability are, by their nature, acts of systems change. They seek to shift the status quo by moving best practice within an industry, or even across the entire private sector. There is wisdom in the crowds. Including voices from outside and within the private sector can enhance systems change. A collaborative mindset requires humility, open-mindedness and a willingness to abandon traditional decision models. The collaborative leader is willing to not only accept but expect setbacks, learn from the setbacks and re-engage, as opposed to being punitive or overly reactive. Organizations will need to seek, develop and reward individual competencies needed to support collaborative efforts and trusted relationships, such as those individuals who forge beyond their organization / industry to form “boundary-spanning” partnerships. How corporations foster collaboration among leaders to draw on the wisdom of the crowd, and who is included in the crowd, will untimely determine success.
• Evolving metrics and tracking systems for informing and validating progress — To date, corporations substantiated their commitment by setting high-level targets or referencing programs currently in operation. Going forward, companies will develop explicit metrics as well as systems for tracking and reporting progress relative to the metrics. Additionally, companies will provide clarity as to how these metrics map to value creation within their own company as well as throughout their value chain and within the economy at large. The association is supported by research, although individual companies will now develop unique roadmaps for building network effects across their various programs, resulting in globally optimal solutions.
• Better governance of information through harmonization — Clarity, consistency and comparability of ESG data remain key challenges. With any new initiative, multiple normative standard setters evolve and in time consolidate or align to achieve a uniform corporate reporting norm. Regulatory authorities and rating agencies are following suit. In recent months, the New York Department of Financial Services, AM Best, Lloyd’s and EIOPA have all made pronouncements. In the meantime, leaders will learn from and select across the varying standards, many of which are not auditable or validated by outside authorities. Boards will need to be aware that regulation and harmonization is evolving, therefore directors are encouraged to be inquisitive about indicators of success against a self-selected framework.

The Years Ahead

The most recent year is the first in a decade that could recalibrate the role of business in delivering on purpose. It has been a daunting year, and more challenges lie ahead. Challenges such as the need to develop an ESG mandate beyond investments to include the core business of insurance/underwriting, the lack of consistency over ESG data quality and disclosures and the need to truly adapt to a collaborative mindset. Furthermore, as an industry we are facing challenges as we broaden the meaning of “E” in the ESG paradigm beyond climate to recognize biodiversity, water pollution and the circular economy. Likewise, we are grappling with the breadth and ever-increasing momentum around social resilience. We are on a multi-year journey, with next year being a year of action toward building truly resilient organizations and systems. Stakeholder capitalism is here to stay, and “triple-bottom-line” goals of people, planet and profit are, in fact, mutually reinforcing. It seems clear that 2021 will indeed be The Year of a New Beginning.

This piece was originally published at internationalinsurance.org.

The pandemic, civil unrest, economic uncertainty and severe weather have created uneasiness and changed consumers’ attitudes and behaviors. To help agents and brokers succeed in today’s current marketplace, Chubb sought to understand how these events have affected the consumer mindset. Our research shows that prospective clients are feeling vulnerable and anxious and are more aware of the current risks they face. 

In addition, successful families and individuals are no longer viewing insurance as a transaction – instead, they  are expecting more from the insurance-buying process and now see insurance as a part of their overall financial wellbeing, especially in a world that is increasingly turbulent. 

For the full research guide, click here. Further key findings are outlined below.

Changed Perceptions

Our research highlighted the negative emotional effects created by recent events, including an increased uncertainty and vulnerability about the future.

In fact, 80% of insurance consumers agree that current events in the world have altered their feelings about risk, and they are more aware of the risks they face than they were a year or two ago. Nearly half of respondents say their insurance purchasing decisions were affected by the need for increased security, concern for the future and an increased awareness of perceived risks.

Yet, as insurance buyers are becoming more conscious of their risks, we’re seeing a new paradigm shift on how they are thinking about insurance agents and brokers. 

See also: How Well Did Agents Cope With COVID?

Old Paradigm Vs. New Paradigm

The old paradigm involved clients interacting with agents and brokers when in need of a new policy or a renewal, and the focus was on the products and carrier alternatives—and pricing. However, the new paradigm now involves clients having a heightened awareness of the risks they face. Equally important, clients and prospects know they need insurance, but now they are looking for solutions and approaches to prepare for an uncertain future, to help secure their overall financial well-being. In addition, they expect their agent or broker to understand their needs as well as their concerns.   

With this new way of thinking, agents and brokers have an opportunity to recognize clients’ emotional needs in the insurance-buying process and to build trust and communicate how insurance can play a stabilizing factor in uncertain times. In fact, according to our survey, when making these insurance-purchasing decisions, 73% of insurance consumers want expert, personally tailored options and 70% want guidance to the best products and services. 

Forming Personal Connections

According to the study, successful individuals and families want their agents and brokers to personally engage with them. Clients and prospects agree that their insurance agent could provide service beyond their expectations by explaining how they can protect themselves from different risks (83%). Furthermore, clients also expect to speak to their agent or broker on the phone at least once during a crisis (92%).

The research also showed that clients and prospects are looking for transparency, which may come in the form of initial and continuing reviews, explanations of coverage details and agent/broker accessibility. Moreover, clients want engagement with their agent or broker to guide them through the insurance process, be a partner in the decision making and express empathy and understanding in their interactions. In other words, emotions come into play during the insurance-buying process—like other direct sales interactions.   

Emotion-Based Selling

The practice of an emotion-based client experience is important in the consumer segment of insurance. Agents and brokers have the opportunity to differentiate themselves by truly educating clients about insurance, how insurance will respond in the event of a claim and what to expect. For example, consumers not only have existing perceptions about insurance products (e.g., homeowners, auto liability and valuables), but their emotions affect their insurance buying behaviors. Thus, it’s important for agents and brokers to connect with their clients to understand their emotional attachment to the assets they are insuring.

Consider homeowners insurance: Rather than speaking to the client about their home in terms of year built, square footage and type of roof — all important details to take in to secure coverage — agents and brokers may want to take the conversation a step further and discuss why the client chose that home or neighborhood. Is it in the best school district? Does it have historic craftmanship or an in-law suite because aging parents are moving in? These important details help the agent or broker establish a deeper connection with clients and understand what’s important — that way, agents and brokers can advise on the best insurance coverages to meet client needs. 

See also: Post-Pandemic: 4 Tips for Independent Agents

To learn more about how the pandemic and other recent events have altered clients’ views of risk and how agents and brokers can continue to build their business by providing an emotion-based client experience, visit: http://www.chubb.com/clienttruths.

To the max. As much as possible. To the utmost extreme.

All of these define the term “nth degree.” As a math major, I know the term has roots in mathematics, where "nth degree" equations and roots have been around for decades. How does this apply to insurance?

The digital era of insurance is accelerating and shifting the business landscape. The digital era has put new technologies, data and capabilities in the hands of business leaders – offering them the opportunity to transform their business and customer experiences.

But an even more powerful transformation is in insurers’ market reach with the power of multi- and digi-channel partner ecosystems!

Buying vs. Selling

Generally, today’s insurance process is difficult, lacks transparency and is complex and often time-consuming. In contrast, many insurtechs and existing insurer innovations are refocusing to a “buying” over “selling” approach --- through a multi-channel strategy that meets customers where and when they want to buy.

If distribution channels are easy to use with products that are easy to understand, then insurance has the opportunity to grow through friction-free, multi-channel distribution.

With the increasing competitive challenges to attract and retain customers, insurers must develop and use a broader distribution ecosystem that engages customers when and how they want … putting them first. A distribution ecosystem can rapidly reach more markets, potential customers and current customers with more purchase and service options by tapping into a growing array of channels beyond the traditional agent/broker channel. Distribution ecosystems provide new access avenues, capabilities and services that create the nth-degree impact – both for customers and insurers.

Simply put, this range of channels includes direct-to-customer, agent/broker, other insurers (for products you want to offer your customers), marketplace exchange or platform and embedded --- provided across a range of soft, hard or invisible embedded partnerships as depicted below.

Together, this spectrum of channels represents the new multi- and digi-channel ecosystem for the digital era of insurance.

Multi- and Digi-Channel Ecosystems — Foundation of the Nth Degree

To compete for the next generation of buyers – millennials and Gen Z -- let alone retain today’s Gen X and Boomers, insurers must be a part of and offer a range of distribution channels with which they interact, transact and integrate, to offer customers innovative, optimized solutions.

In our 2020 customer research on auto and life insurance, we found younger generations are open to buying insurance from a wide array of channel options, including:

• For life insurance, they are 33% more open to new channels than older generations.
• The preference gap between new and traditional channels is large for older generations – nearly 50% – as compared with only 21% for Gen Z and millennials. So, customers are much more open to different, new channels – creating an opportunity for growth.
• The younger generation is twice as likely to buy auto insurance from a car shopping website or a vehicle manufacturer website or have it included in the purchase or lease of a vehicle.
• Millennials and Gen Z are open to buying insurance from Big Tech like Amazon, Apple and Google.

Insurers looking to compete are ill-equipped to do it alone. They must create an ecosystem of connected channels, using a range of digital capabilities to connect with customers when and how they want.

Let’s face it…. we all interact with a wide array of different entities, businesses and individuals on a regular basis. Many of these entities have earned our loyalty and trust, providing a platform for future engagement. Many of these are now becoming channels for insurance --- GM, SoFi, Ford, Petco, Airbnb, Uber, Intuit and more. At the same time, we are seeing partnerships form within the insurance industry --- insurers selling each other’s products, leveraging new marketplaces to expand reach and strengthening the traditional agent/broker channel with new digital capabilities.

Together, the partnerships represent a powerful distribution ecosystem that places insurance directly in the path of a customer’s life journey events, where insurance is relevant and needed. Ecosystems provide a greater impact on sales because they are an “outside” customer approach instead of an “inside” product/process approach. This is the shift from selling to buying that is so crucial to today’s insurer growth. It’s an approach that naturally reduces infrastructure, operational and capital expenditures at the same time that it brings in more business with less effort.

However, in our joint research with PIMA last year, we found that of the wide array of 34 channel options, only 18% (or 6 of the 34) are being planned -- reflecting a very narrow view of channels that significantly limit reach and revenue opportunities and create a wide-open field for those who dare to be creative in establishing a multi- and digi-channel partner ecosystem.

Next-Gen-Multi- and Digi-Channel-Gen Leaders

Who is taking advantage of this wide-open field, becoming next-gen multi- and digi-channel leaders? Some are starting in other financial services areas first (which provides insights to broader opportunities) while others are directly entering insurance. But they are all vying for the next-generation customer!

Outdoorsy + Roamly — Online recreational vehicle rental and outdoor travel business Outdoorsy said it is partnering with insurtech Roamly to provide insurance for RVs, travel trailers or campervans. With Roamly, commercial and personal policy owners can safely rent their RV, trailer or camper on marketplaces like Outdoorsy without losing coverage or worrying about loopholes.

SoFi, Ladder Life, Lemonade and Gabi — One of the best examples of a company looking at the customer across life, health, wealth and wellness is SoFi, a fintech organization – under SoFi Protect. SoFi started out as a student loan consolidator and provider and has rapidly expanded to owning the entire customer financial services relationship – life, wealth, health and wellness. The original focus on student loans has been capturing the next generation of customers – millennials, Gen Z and eventually Gen Y. SoFi now has over one million members and 7.5 million contacts, where members may represent family units. The company created “vaults” for customers to use for saving and spending, for categories like insurance, taxes, travel, house, emergency fund, etc. and offer insurance through an ecosystem of partners, including Ladder Life for life insurance, Lemonade for renters or homeowners insurance and Gabi for auto insurance.

State Farm and Ford — State Farm announced a partnership with Ford for usage-based insurance (UBI) using the auto telematics and connected data from eligible, connected Ford vehicles. Ford vehicle owners will be able to opt in to State Farm’s Drive Safe & Save program, which aligns premium to miles driven while also rewarding safe and good driving behavior with potential discounts.

John Hancock and Amazon — John Hancock announced the integration of its Vitality Program with Amazon Halo, allowing Hancock’s Vitality customers to use the Amazon Halo Band to earn Vitality points based on their daily efforts for a healthier lifestyle that should mean a longer life. The Amazon Halo Band, a wearable health and wellness device, will measure and analyze users’ activity, heart rate, sleep and tone of voice to provide individual health insights and help encourage healthier habits – thereby earning Vitality points.

Google, Allianz and Munich Re — Google is partnering with these two global insurers to cover cyber breaches and related risks for client businesses that use Google’s cloud services.

The Guarantors and Property Management Companies — The Guarantors is a fintech company providing innovative insurance products and financial solutions for residential and commercial real estate professionals as well as their residents and tenants. The goal is to be the most trusted “go-to” brand for insurance and financial solutions throughout the real estate industry.

Chubb — Launched Chubb Studio “digital insurance in a box.” Partners can access their products, services and claims digitally and integrate what they do into what the partner does – embedded insurance. Initial products offered include: health and well-being, home contents, gadgets, travel and small businesses.

And on the horizon are more companies whose first focus is financial services (such as banking) but that will be well-positioned to offer and provide insurance. The companies also have the motivation. With low interest rates and increased competition from digital leaders, banks need to grow their service portfolios. Consider their customer bases and the impact if they move into insurance.

Verizon — While fintechs globally have been vying for the next generation of banking customers by offering them custom accounts when they turn 18, Verizon has jumped into the game by offering mobile banking with a checking account for the younger generation. The new tool, called Family Money, has two options -- monitorable checking for parents to observe and track what their children are paying for and a “savings vault” account with real-time alerts, rules, spending limits and locks. Verizon uses Galileo for the application programming interface (API) and payment processing platform and are offering bank accounts and a prepaid Visa card through Metropolitan Commercial Bank.

Google — Similar to Verizon, the company is vying for the customer relationship. Google’s “Plex” accounts are a mobile-first checking and savings account directly integrated into the Google Pay app. The company is partnering with about 10 financial institutions, ranging from big national banks to regional banks and credit unions, and customers will be able to choose which one they want.

Walgreens — Walgreens is launching a bank account in partnership with MetaBank, inclusive of a debit card, as a way to complement its current services and enhance its loyalty program and customer personalization.

H&R Block — H&R Block, in partnership with MetaBank, is offering an Emerald Prepaid Mastercard account that will do more than accept tax refunds loaded onto it, including allowing customers to withdraw cash, pay bills and perform other money management tasks.

Each of these have been dabbling in insurance, and these efforts are further evidence of their customer strategies.

Distribution Partner Ecosystems — Go to the Nth Degree

Market leaders and competitive market position in the future will be how insurers create distribution partner ecosystems that leverage their strengths and embrace partners to fill gaps and expand market reach. It’s all about the multiples!

In our 2021 Strategic Priorities research, we found that insurers with new products are blowing away their traditional product counterparts in leveraging partnerships and ecosystems across many different areas of the distribution spectrum noted previously. Unfortunately, too many insurers seem stuck in their traditional channels rather than expanding channel choice and reach, meeting the customer where and when they want.

We see big bets being made in new business models, products and services from fintech, insurtech and incumbent insurers that are focused on capturing customers when and where they want through a broader market network of partners. But the challenge for those not embracing a distribution partner ecosystem is that they will have decreasing opportunities for partnerships the longer they wait, limiting their market reach and growth opportunities as a new generation of buyers increasingly turns to alternative channels.

The question is… are you ready and willing to take your distribution strategy to the max… to the nth degree? Your customers are waiting.

In this webinar, ITL Editor-in-Chief Paul Carroll sits down with Chris Wei, Chairman of the Executive Council of the International Insurance Society and a longtime senior executive at Aviva. In advance of the IIS annual forum on Sept. 27-29, they explore how the industry can help drive a sustainable global recovery.  

This webinar will discuss: 

--Why “the answer is not to have the answer” – but, instead, to be prepared to pivot quickly in the face of global challenges (such as by developing a vaccine for COVID). 

--How to narrow the protection gap through education and through improving the customer experience. 

--Why it’s wrong to “drip feed” innovation, to delegate responsibility for it or to expect quick results. 

---

Speakers:

If you’re anything like the average person, you probably receive several calls every day from unknown callers or vague 1-800 numbers. And if you’re like most, you probably block those calls or send them straight to voicemail. Americans received close to 46 billion unwanted robocall last year, so this distrustful reaction to incoming calls is forgivable – but the erosion of trust in the phone experience is hampering insurance providers' ability to reach customers. This has hurt bottom lines – increasing operational costs as companies spend more time on customer outreach, while hampering revenue-producing opportunities – all of which is making it harder for agents to generate sales.

To better understand the impact on insurers, our company partnered with research firm Omdia to survey decision makers in the insurance industry. We used the survey to gauge how these negative call experiences are affecting sales, as well as to ascertain what strategies insurers are adopting to restore trust in the phone experience. What we found is an industry in flux, eager to adopt new digital channels while still reliant on traditional ones like the phone to connect and engage their customers. 

A Perfect Storm of Distrust

While insurance providers have embraced the spectrum of digital communications channels such as email and texting to communicate with their customers, studies have shown that consumers prefer the phone channel for sensitive or urgent communications. This is especially true for healthcare insurers, which often are under time pressure to enroll members into tailored care management programs following the identification of a high-risk health issue.

Unfortunately for consumers, few industries have been targeted as heavily by scammers as the insurance industry. Because so much misinformation and confusion exists around insurance, scammers have found great success impersonating representatives from the government-run health insurance marketplace, threatening consumers with fines or imprisonment unless they hand over personal information or pay bogus fees. 

Naturally, the uncertainty triggered by the COVID-19 pandemic has only accelerated these schemes. More than half (54%) of respondents in our survey said that, while outbound call volume increased significantly over the past six months, answer rates have remained largely stagnant, requiring insurance providers to spend even more cycles trying to connect with their customers. 

Because of the high prevalence of fraud in the insurance industry, it’s little wonder that the respondents in our survey said that the phone has been relegated to the third most important communications channel (45%), trailing mobile apps (55%) and email (73%). Despite this, insurers recognize that the phone is an essential channel for certain types of critical communications, with 82% of respondents saying that the phone was their primary vehicle for delivering payment reminders, while almost two-thirds (64%) rely on the phone to notify customers about potential fraudulent activity and cancellation alerts.

Further compounding these challenges is that, because of the confusion around complying with new regulations, an alarming percentage of outbound calls are simply not getting through: More than a third of respondents (36%) reported that over 30% of their calls were being erroneously blocked, with over half (54%) of respondents estimating that they’ve lost 10% of revenue due to call blocking and mislabeling.

See also: Why Open Insurance Is the Future

Five Strategies to Rebuild Trust

Phone calls still play a vital role in the customer journey and offer valuable opportunities to connect with customers. Forward-thinking insurers are using a host of strategies to make outbound voice calls more effective. Here are five of the best practices that we have identified that insurers can leverage to rebuild trust in voice communications:

#1: Call customers when they are most likely to answer.

A surprising number of enterprises don’t take basic consumer behavioral intelligence into account when structuring their outbound campaigns. Modern consumer data insight solutions integrate strategies such as a "contactability score" for each contact and apply phone behavioral intelligence to determine key preferences such as the best time of the day, best day of the week and the best phone number to use when reaching out to each individual in your database.

#2: Apply caller name optimization to boost customer pick-up rates.

Even legitimate calls can be mistakenly blocked by new rules designed to protect consumers. Insurers should invest in solutions such as caller name optimization, which allows them to display accurate and consistent caller ID on their outbound calls. This provides a secondary level of assurance that calls are not inadvertently blocked or marked as spam by network carriers or third-party providers of call screening software. Enterprises can also manage their caller ID through a centralized online portal, protecting verified phone numbers from attempts at ID spoofing

#3: Ensure calls aren’t mistakenly blocked by carriers.

According to our survey, over 90% of respondents said they were familiar with the mandate for Communications Service Providers to implement STIR/SHAKEN call authentication. As more service providers deploy STIR/SHAKEN to protect enterprises and consumers from call spoofing and scams, legitimate calls may be blocked or marked as spam. It’s up to enterprises to authenticate the caller identity for outbound calls and digitally sign calls by integrating STIR/SHAKEN protocols in their calling networks. This provides a way to influence the level of trust calls are given by voice service providers.

#4: Adopt branded call displays to establish trust for outbound calls.

The first step to improving trust in voice channels is to assure customers that the call they are receiving is legitimate. A simple way to achieve this is by implementing branded calling solutions that enable insurers to display their company name, their logo, reason for the call and a verification of the caller identity. When we asked respondents if they thought they would find this solution valuable, 82% of respondents said they would. Branded calling not only makes claims resolution more efficient but can materially reduce inbound calls, which is one of the highest costs to a claims division.

See also: 7 ‘Laws of Zero’ Will Shape Future

#5: Prioritize a layered omnichannel approach.

In today’s multi-channel reality, the most trusted brands are the ones that can deliver a consistent and seamless experience to their customers across channels. A robust omnichannel strategy doesn’t just mean offering consumers a variety of ways to interact with a business – it means that each one should be intelligently weighted to fully realize its respective advantages. For instance, our research has found that consumers are much more likely to answer a call if they receive an email-to-text notification in advance of the call. 

The insurance industry as a whole is predicated on the ability of adjusters to quantify and predict risk. And insurance professionals are better than most at making accurate predictions. While not everything is foreseeable, this much is: The ability of insurers to survive and thrive in the uncertain future will require the ability to adapt and to optimize their voice channel practices.