Tag Archives: ADT

Keen Insights on Customer Experience

The need to improve customers’ experiences in interacting with insurers strikes me as so acute that I’m going to take a shot at the issue here, even though we’ve been hitting it hard in a series of articles from Capgemini and Salesforce over the past month. (The articles are here, here, here and here, and a related white paper is here.)

I want to share what I found to be some keen insights from a webinar I hosted last week with executives from the two companies and with Donna Peeples, a member of our advisory board who was the chief customer experience officer at AIG and who is currently the chief engagement officer at Motivated, a consultancy she founded to help improve experiences.

The basis argument goes like this: Customer ratings of their dealings with insurers are bad and getting worse, putting hundreds of billions of dollars of premiums at risk. Insurers need to solve the problems and even find ways to start delighting customers. Technology must play a huge role.

But a lot lies behind that straightforward argument, and a lot of art, as well as science, needs to be applied to the problem. Thus the insights from the webinar, whose panelists, in addition to Peeples, were Nigel Walsh, vice president, insurance, at CapGemini, and Jeffery To, senior director, insurance, at Salesforce.

The insights are too long to fit on bumper stickers but are still plenty pithy and deserve careful thought.

The Problem

Peeples:

“Let’s face facts. Who really gets excited about buying insurance? It’s just not that much fun.”

“We think of claims as our product, when in actuality peace of mind is really our product.”

To: 

“There’s $400 billion in premiums across P&C and life that is at stake. That’s because 70% of policyholders are making renewal decisions in the next 12 months.”

“You lose, not just the customer for that one policy, but you lose the lifetime value of that customer.… The second thing that insurers will suffer from when a customer leaves is brand erosion, because in this day and age, with social media and mobile and so forth, bad news travels fast.”

Walsh:

“Insurers get compared to every other retail product or retail approach that consumers make. More often than not, of course, those are retail purchases that you make. They’re joyful, they’re delightful, they’re exciting.”

What Customers Want

Walsh:

“GAFA — or Google, Amazon, Facebook, Apple: If I could describe the ideal experience every one of us wants, we almost want data like Google have it, supply chain like Amazon have it, a community like Facebook have and a brand like Apple….This whole concept of GAFA to me gives you the ideal framework for what a great experience would look like.”

The Key Words to Focus On 

Walsh:

Convenience: “Let me pick on Amazon and Amazon Prime, specifically. I’m still in awe that someone turns up on Sunday morning, first thing, with my package I ordered the day before, and it’s just there…. The speed at which they operate and are able to fulfill those things, we need to apply that to a claims scenario or a mid-term adjustment.”

Relevance: “We need to be relevant to customers time and time again, as opposed to approaches that we do once a year or at certain points in the year….Day in, day out. ADT and Nest is an example about how you become relevant to your customer by doing more than just insurance.”

To:

Seamlessness: “Customers are expecting the Apple-like experience….You want to provide that effortless experience to policyholders across all phases in their journey.”

Stickiness: “If you can provide agents and brokers with the latest product updates, support and expertise with the same ease as in a community like Facebook, you’re creating loyalty and stickiness.”

Integrated: “Insurers have grown through acquisitions….I’ve worked with insurers who’ve got hundreds of different legacy systems, back-office claims, policy billing systems that they have to deal with, and you can’t achieve a true single view of a customer without integrating all of these various pieces.”

The Solution 

Peeples:  

“Always start with the people. We have to stop thinking about sorting data, and we have to start thinking about beating hearts.”

“We all talk about busting silos, but silos are like cockroaches. They’re going to outlive us all.”

“How do you think about those verticals where we all take such good care of the customer and say we own them, when in fact we’re all just caregivers for a certain amount of time along that customer’s journey? The elegance, or lack thereof, of those hand-offs is where I would also focus.”

To:

“If I’m a service agent or a sales agent, regardless of what device I’m using, whether it’s a desktop or a mobile device, I want a single view of that policyholder that pulls together things like claims history, policy changes, interaction history, and add all of that in addition to policyholder profile information…. If I’m a life provider, it’s important for me to know who the spouse and the children are because they could be potential dependents or beneficiaries. Tying all these pieces together requires more than just a unified front-end user experience. You need to actually unify the underlying pieces.”

Walsh:

“[The three most important areas for focus are] connecting elegantly, engaging regularly and seeing completely.”

“Engaging regularly is actually a tough challenge for insurance organizations because ultimately, why would I want to talk to my insurance provider unless it’s a time of crisis? …There are some great examples, from the connected car, the connected home, the connected self, where we can actually regularly engage with each of our individuals that we want to market to and talk to. That’s really, really key.”

“Millennials want to connect the way that says, “We actually have no clue what we’ve bought. We’re worried about what we’ve bought. Therefore, can we speak to someone that’s going to give me the assurance and confidence and walk me through the process?”

Peeples:

“The call center folks generally, not always, are some of the lowest-compensated. Maybe some of the least-trained. But they still represent the brand every single day as surely as the senior executives when they’re speaking on analyst calls or to Wall Street. Those people are really where the rubber hits the road. If you haven’t gone out and stood in the retail locations and seen the interactions, if you haven’t sat at the caller processing centers… these are the warriors of your brand and of your company.”

“There was a study that was conducted around call centers that found that, in 2013, the average number of screens that a CSR would have to pull up to get to what you and I as a customer would think is a relatively simple answer, was five. That number jumped in 2014 to seven…. I would encourage just a very thoughtful process around connecting those systems.”

“We have to recognize that we no longer have the benefit and control of a monologue at the customers or stakeholders. It’s no longer ‘word of mouth’; it’s a ‘world of mouth’ out there.”

“We talk a lot about the customer’s journey, but there’s also equally as important an employee journey that creates this double helix that is the corporate DNA.”

Walsh:

“You can actually break the problem down into some quick hits. We’ve got some clients that launch products in 30 to 40 days. I say that to most people, and they almost fall of their chair because the usual time for these things is six, 12, 18 months….You need to tweak it, or it’s going to fail. But with modern technology at least you can try and prove it and move it into a full rollout or move on to a different thing.”

Peeples:

“We need to listen to our customers, get out of our focus group of one, out of our own head.”

To:

“It simply will not work to turn to the predefined business process maps that you’ve done in the past. Don’t turn to those. Think first about the customer and agent experience, what their goals are, and design the customer experience around those goals. Don’t pave the cow path.”

“Rationalize. Make those tough decisions about what systems that you have in your spaghetti factory of legacy systems, which ones of them are strategic and which ones are you going to sunset.”

“Unify. Before you can even take the first few steps toward actually deploying or designing, you need to get basic blocking and tackling stuff done, like governance. Like having a common data model in place so that everyone agrees on what the data is, how it’s defined and where it’s going to come from. Unify the visions across the various levels in the organization.”

“You want to be able to measure your results. At the end of the development and after we’ve let it run for a little while, have we met our objectives?”

“Before problems even arise, you want to be so in tune with where that policyholder is in their interactions with you or in their life events that you are able to actually provide value-adding services and information before it even has to be requested.”

Walsh:

“Think big, start small, act quickly.”

“The cross sale, up sale is a constant, constant challenge. Most companies that I work with right now have an average of 1 to 1.1 products per customer. Best in class will tell you that it’s probably 3 products per customer. What’s the route for 1 or 1.1 to 3?”

Final Words

Walsh:

“Believe me, it’s absolutely possible to do some crazy things out there.”

Peeples:

“Let’s be honest here, we talk about hearts and minds, but it’s really about hearts, minds and wallets.”

“By the numbers, 55% of our customers tell us that they would pay more for guaranteed better service, and 82% of our customers would buy more from us if we just made it easier for them. 89% of our customers said that they would quit doing business with us after a bad experience.”

“Stop thinking about transactions and start thinking about relationships. Whether they’re customers or they’re employees or they’re part of the bigger universe of stakeholders including the intermediaries and the legislators and the regulators, it’s about the people.”

“Always keep the people in mind. Be data-informed and technology-enabled, but always think about the people.”

To hear the full webinar, click here. To see the slides, click here. If you want the full transcript, email me at paul@insurancethoughtleadership.com.

The Insurance Agent of the Future?

Recently, my 80-something mother bought an iPad to replace one of the first models, which is now obsolete (can’t upgrade the iOS!). So, though she is an always-with-some-trepidation user, she’s no Luddite. After her second day with the new device, she called me with some alarm to say that someone named Siri was trying to hack into her iPad (for you non-iOS users, Siri is the name of the iOS speech recognition software – a new feature for my mom).

This got me thinking about big data and the role of the insurance agent in the future. My thinking goes something like this…

Insurance Agent of the Future

Insurance of the future will be beyond indemnification for losses (at an actuarially fair price, of course) and will include loss reduction in some way, whether through direct action or indirect advice.

Let’s think about home automation and monitoring systems, a.k.a., the connected home, or “telematics for the home,” delivered through companies such as Keen, SNUPI and Revolv. Think thermostats, video cams, carbon monoxide and fire/smoke detectors, storm shutter and roof single sensors, refrigerator and freezer sensors, door lock sensors, etc. The capabilities are going to be integrated and will involve big (data).

Some company – maybe insurance companies, maybe those giant B2C companies like Google and Amazon, maybe some others – will take all that data and present it back to the consumer in an intelligent manner. Here is where loss reduction becomes very interesting. Companies could take direct action through automated activation of alarms and shutdown of systems when storms are approaching. Indirect advice might mean notifying a homeowner of unlocked doors, foot traffic in the house and refrigerator doors opening and closing.

Where does the agent come in? Maybe Google or Amazon and ADT will just get this all to simply work: Download the app, and it tells you what to do. But maybe the consumer will want some help with all this data and all this activity: what filters to tighten, what sensors to de-activate and what data is needed to get the right coverage at the right price.

Maybe the Geek Squad needs to morph to the Home Monitoring Squad. And the Home Monitoring Squad sure sounds like the possible insurance agent of the future – tech-savvy, risk-savvy and comfortable conversing with 80-year-olds.

Insurance and the Internet of Things

Depending on the day of the week, one of three buzz words seems to fill every column inch, to be used in the marketing of every new product or service and to be cited in every press release. To me, these are, digital (insert anything here), big data and the Internet of Things (IoT). It’s no surprise that the IoT is at the peak of Inflated Expectations in Gartner’s Hype Cycle.

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In this post, I want to explore IoT a little further, specifically with the insurance world in mind.

Like any self-respecting early adopter (technology geek/gadget magpie), I personally see the IoT as a game-changing disruptor, regardless of industry. My kids won’t know a world without almost every conceivable thing being connected to the Internet. Depending on which report you read, there will be anything from 100 to 500 sensors in every home and a market for the IoT worth $7.1 trillion by 2020 (IDC), with more than 4.9 billion connected things by 2015 (Gartner). Very few of the technology giants are not investing heavily in this secto. The IoT is not a fad.

So what is the IoT?

It’s simply the ability to interact with a network of physical objects that feature an IP address (directly or indirectly) and can connect device to device or device to human. Today, you can connect lots of things to the Internet, some of which you would never expect. Examples include:

  • Homes and commercial buildings — Smart buildings with smart sensors and smart utilities, security systems, environment monitoring, smart carpet, etc.
  • Automobiles — tracking when, how and where you drive. Transport vehicles of any kind, including driverless cars, could be connected, as could individual items/packages on a cargo ship.
  • Livestock — WiFi sheep; see here from the BBC on why sheep are being fitted with WiFi sensors,
  • Human beings — the latest in wearables allows companies such as Vitality Health Insurance to reward healthy behavior, reducing your premium for the more active and healthy you are.
  • Smart cities — where everything is truly connected. Libelium has 50 great examples here. Have you walked down Regent Street in London recently? It’s an interesting experience. We live in a truly context-aware world.

As Ben Evans said in his great piece, “Mobile is Eating the World,” “Sensors profoundly change what a computer can know.”

Perhaps an easier question to ask is: What can you not connect to the Internet these days? This is a rapidly diminishing list. Look back 12 months or so to the Top 25 weird things to connect to the Internet; all of a sudden they don’t seem so weird. What will happen in the next 12 months? For fans of contactless payment cards, how do you feel when you can’t use it, as a retailer hasn’t yet adopted the technology? Inconvenienced? These are the sorts of simple things that give me time back and are simple and convenient.

Ultimately, it’s all about automated data collection from the source itself. As insurers, our success depends on this. It’s what drives our very industry, right from the very first research, through to quote, bind and every event thereafter that drives our risk, pricing and actuarial teams. Getting this data and monitoring this directly from its source has huge potential in today’s traditional insurance business model.

Another example of positive uses is from Uber, whose data is now supporting city planners with urban transport. As insurers, we could use the same data to avoid accident black spots, congestion and much more. Traffic systems would be linked directly to the flow, density, type and vehicles themselves. Basic data such as time of day, postal code or gender is simply not enough anymore. IoT connected services can change everything.

Opportunities


The cost of connecting things today has becoming almost insignificant, and, importantly, the desire for things that are not connected is diminishing at a greater pace. Ten years ago, you would test drive a car and, nine times out of 10, focus on the driving experience. The first thing people do today is check the “infotainment,” how your smart phone can connect, what you can control via an app. It’s not just cars; I recently moved house and, when looking at new house alarms, a key consideration was what can I control and monitor via my phone or an app. Manufacturers are quick to jump on the bandwagon. Have a look at ADT Pulse (unfortunately not yet available in the UK, but many others are).

It seems there are lots of options, but they are still working on old-fashioned business models. When will alarm monitoring be undertaken by your crowd sourced/handpicked local community as opposed to the centralized service center, which then calls the police? With IoT, who needs middlemen? The first notice of loss (FNOL) or claim process becomes automated (we have talked about this for years). The level of fraud can be dramatically reduced. Everything you can interact with or monitor, you can now predict better than ever.

How does the IoT affect the carrier, agent or broker? Have a look at the infographic below — which of these “things” did you expect to monitor? (The site for the infographic is here.) As the local city administration, can you reduce accidents or claims from understanding smart roads, pothole damage and more? Reduce health costs by understanding pollution?

libelium_smart_world_infographic_950px

We as insurers typically struggle because customers rarely want to speak to their insurers. In the new economy, we have the opportunity to be connected all the time to each other. This brings a vast number of possibilities and new potential business models to us, based on this new wealth of data.

Insurers now have the ability to know in advance of an event, ultimately improving their customers’ and potential customers’ experience, security and well-being.

With everything connected, what could go wrong?

However, the IoT has to come with a health warning, too. For me, three of the key things to consider here as insurance organization are:

  1. You are now really competing on data, nothing more. We never produced any products, anyway; now it’s even more transparent. Make sure you know your data, can process it efficiently and effectively, understand it and most importantly use it. How we use information to enrich our world will be key. Don’t drown; the volume is about to explode. As an example, every minute, OCTO stores more than 118.000 data points from drivers around the world. How will you stand out from the crowd? I wrote recently here on how brand will be critical. Ownership of the data will also be key. BMW recently announced that it would not share any of its connected car data. It does, however, have a significant partnership with a large global insurer already.
  2. Another key risk is from cyber security. There are already stories of usage-based insurance (UBI) car devices potentially being hacked. What happens if your driverless car gets hacked and then crashes, causing serious damage or, worse, a fatality? Who will carry the risk?
  3. You must see how the IoT can drive new business models, based on customer demand. Ray Wang recently said that we are now supporting mass personalization for a market segment of one. What can you now insure that you never could previously for individuals and organizations? New business models don’t mean we have to go alone, either. New partnerships will drive innovation and, importantly, convenience for the end user. Be careful not to miss out on the output, as British Gas has with Hive and nPower has with Nest. Ignore the Hive and Nest connected devices; the data they collect is what matters.

For once, the insurance industry could be as quick to adopt as everyone else to adopt, or ahead. We are on the forefront of data enrichment and much more. We can better price, engage and interact with our customers and prospects. We can interact with each and every stage of the insurance life cycle; we can join and automate the dots faster and better than ever before.

It’s an exciting time, and while it may be a while before the legacy oil tanker turns, we had better be ready and at the wheel if we are to own the opportunity.