Tag Archives: customer experience

How to Improve the Customer Experience

Tunnels, once the greatest innovation in transportation, are poised to be the greatest once again through innovation and rethinking of transportation. While Elon Musk has been looking to the sky with SpaceX, he’s also been going underground with the Boring Company, creating test tunnels in California and operational tunnels in Las Vegas. The key to Musk’s tunneling concept is the rapid technological advancement being made in boring machines. Prufrock, the current all-electric boring machine, can dig a 12’ diameter tunnel up to one mile per day. The Boring Company has a goal of producing a machine that would be able to bore up to seven miles per day, a stunningly fast pace that will change the landscape of transportation and create a system that connects people and places more than ever before.

The value of tunneling is also a new level of versatility and looks at the concept of mobility rather than individual types of transportation. It will improve pedestrian traffic, auto traffic and certainly some forms of subway traffic, but it will also facilitate new types of underground travel, such as autonomous vehicle traffic and hyperloop travel. Tunnels can be dug without disruption to the infrastructure, and they could be an excellent way to improve ground-level and atmospheric environments through non-emission subterranean commuting. Who would have thought that digging could lead to a more sustainable future? It is just one more example of how complex problems are often best solved by breaking outside of the boundaries of convention and incorporating new 360-degree thinking with an outside-in perspective.

Recently, we have been looking at Majesco’s latest thought-leadership report, Digital Insurance: The Inflection Point, in an effort to peek into the future of the insurance experience. Increasingly, customers choose insurers not just for the risk product but for the combination of risk product, customer experience and value-added services. Because of this, future insurance leaders will be those who provide smooth, pleasant experiences with the best views into products and value-added services. Can we learn anything by digging deeper?

An Outside-In Mindset

No one will argue that insurance opportunities exist for those who can innovate and adapt. Each insurer has its own mining to do. Not only do they need to think ahead about the impact of new technologies, like the Boring Company, on P&C insurance products, but they need to think about the impact of 360-degree digital views and services that create greater value for customers today and tomorrow. When it comes down to it, the customer is the one who is pushing insurers to innovate. They are looking especially hard at companies that can provide unconventional solutions to difficult insurance puzzles.

Insurers must lay the groundwork of a new digital business model. We are facing a constant flow of disruptive factors at the same time we are witnessing unprecedented opportunities.   

Consider the pressures, threats and opportunities, including:

  • Non-Insurance Providers: Companies like Tesla and GM are offering/embedding insurance and have access to more real-time data to competitively price and underwrite the risk than most insurers will have, potentially cutting off traditional carriers from these opportunities. 
  • Connected Everything: Connected devices, beyond telematics, are enabling underwriting and pricing based on mileage, location, weather and behavior for P&C and L&A products, which would tie premium to usage, risk or more – providing more personalized coverage. 
  • On-Demand and Embedded Insurance: On-demand insurance, expected to increase 30% by 2026, will expand to nearly all lines of business. Furthermore, embedded insurance is poised to automatically include insurance in the purchase of something else — like a vehicle, home or electronic device.
  • Continuous Underwriting: Rather than pricing once, insurers are shifting to constantly updating the risk profile. This changes policy terms and pricing using the continuous flow of data from different sources like cyber, fitness devices, telematics and other IoT devices and encourages people to manage their risk, which can drive lower prices.

See also: 3 Ways to Improve Customer Experience

Today’s customers are extremely digitally adept, with higher expectations, different needs and a demand for better experiences that are not met with the “traditional” insurance approach, creating a fault line between customers’ expectations and insurers’ ability to deliver. In our customer research for individuals and businesses (Figures 1 and 2), the digital shift is well underway, reflected in the interest among both the older and younger generations for digital customer engagement and pricing. 

Figure 1: Interest in digital customer engagement and pricing — consumers

Insurers leveraging digital technologies, data and AI/ML are poised to leapfrog the competition by organizing talent, technology and ways of working around a digital-first vision for empowering customers.

In the recently released reports on innovation rating status, AM Best found that while the pandemic forced businesses to cram years’ worth of innovations into one year, most companies still have a long way to go. The report also found that there is a perceptible link between superior ratings and use of cutting-edge processes and technology-leveraged innovation initiatives.

If insurers are willing to dig deeper, they may find that data, analytics and digital technologies can help them create paths to income and value. The costs of cutting-edge technologies are continually going down as their impact rises. For example, the flexible, scalable, volume-based pricing of cloud-based processes that are necessary for digital service create a tremendous cost savings over on-site, server-based systems, but more importantly provide the flexibility to connect with ecosystems and adapt to market changes rapidly.

This is similar to tunnel boring. Prufrock’s boring cost per mile is going down just as the necessity for tunnels is on the rise. The result in both cases (tunnels and insurance) will be an ability to improve traffic flow, improve speed, improve experience and meet demand while reducing the overall use of previous technologies. That’s what makes digital insurance a more sustainable solution in the long run. It is solving multiple formulas at the same time.

The bottom line … a digital-first strategy will position that insurer as a future leader.  

Figure 2: Interest in digital customer engagement and pricing – SMBs

Can a Digital Strategy Meet the Digital Insurance Shift Quickly Enough?

Nothing satisfies an insurance customer more than having a positive personal interaction with any company — even their insurer. All it takes is to meet their expectations of a personalized, smooth experience for a claim, a purchase or a routine contact such as billing and payments, creating the “Amazon experience” for insurance.

Of course, when interactions are disparate, frustrating, complex or redundant, the opposite is true. Customers become disillusioned and unsatisfied with the insurer.

COVID has tested insurers’ ability to pivot to a digital-first strategy, with an increased focus on customer experience. Years of adding disparate, siloed digital capabilities like functional portals were challenged. It became apparent that real digital transformation required a mindset shift to a new way of thinking, planning and doing. Leaders know this.

Unfortunately, insurance still embraces decades of legacy business assumptions and technologies that are roadblocks on the path to digital maturity. Many insurers were early adopters and innovators in technology but have built up a complex landscape of technical assets over decades, resulting in significant technical debt. The “modern” solutions of 10 years ago no longer meet the demands of a digital era or match the capabilities of insurtechs that are raising the bar.  

Creating compelling experiences for customers that provide transparency, intuitiveness and efficiency require next-generation core, data and digital platform solutions that use cloud, applicating programming interfaces (APIs), microservices, AI/ML and other technologies. This next-generation technology stack allows the exchange and ingestion of valuable data from diverse sources to produce highly personalized customer experiences in near real time. 

Insurers need to do some future-thinking around real-time risk assessment. They need to re-imagine customer journeys to move beyond a “tunnel-vision” portal to a new customer experience, to create new products offer new services and innovate their business models.

Can CX Be a Stand-Alone Discipline?

Let’s say you’ve appointed a head of customer experience, who is part of your senior management team. You have a customer experience practice. This might be a small team of a few people, or it might be a larger division or department within your organization. And you’ve implemented practices and procedures driven by customer experience. You’re doing research. You’re creating and using personas and journey maps. Maybe you’re even doing a service blueprint. And, of course, you have metrics and measurements. From thoseat, you get analytics and intelligence. You know what your customers need. You know how they feel; you know what they’re saying. And you are acting based on what you learn. You’re changing priorities, decisions and investments. So, you’ve established the discipline, and you’re doing everything right.

But are you really? Don’t get me wrong. Everything you’re doing in that scenario is essential to your organization. But if your customer experience discipline is siloed, if it is simply aligned but not embedded and woven throughout your organization into everything you do, and if it is not a key driver for almost everything you do, the notion that you’re truly driven by customer experience is more myth than reality.

Creating the reality of being driven by customer experience requires education, understanding and implementation of the discipline throughout your entire organization. It calls for the knowledge of how customer experience differentiates from customer service and the need to share, apply and nurture practices and assets, not simply develop and document them. This is not about creating personas and journey maps and then putting them on a shelf or implementing them within a siloed discipline. CX assets and practices need to be top of mind and referenced frequently by everyone – in thoughts, conversations, planning, practices and absolutely decision-making. And, just as your customers’ journeys continually evolve, so must your CX practices and assets. 

I cannot stress enough that the associated knowledge or practice of customer experience affects almost everyone in your organization and just about everything in your organization in the same way that everyone and everything in your organization affects your customers, whether you realize it or not. Customer experience should become an inextricable part of your culture. This is not accomplished top down, and it’s not accomplished bottom up. It needs to be woven throughout all of your strategies, plans, projects, workflows, conversations, decisions and how you apply technology.

To achieve this organic customer experience culture, all of these components need to be designed and orchestrated to enable the desired customer experience. It is not just going to happen. Done right, this transformation is a journey much like innovation or digital transformation, and it’s one that gets to the real heart of your organization and affects every aspect of what you do and why you do it. It’s a big journey. But like all big journeys, it begins with small steps and is about gaining momentum. Over time, customer experience will no longer be a thing you do, but rather will become a natural part of how you think, how you behave, and what drives your conversations, priorities, investments, and decisions. To move from the myth to the reality and become truly driven by customer experience, it is key to educate and involve everybody. Do not align, but rather embed. And go beyond the customer’s view and journey and look at your internal journey.

See also: 3 Ways to Improve Customer Experience

Is customer experience a discipline unto itself? I hope you would agree that customer experience is certainly a discipline, but that the last thing you want is to keep it unto itself.

ITL FOCUS: Customer Experience

JULY 2021 FOCUS OF THE MONTH
Customer Experience



FROM THE EDITOR

For maybe the first 15 years of the personal computer revolution, business and even government leaders talked a lot about the need for computer literacy. We were told that the very competitiveness of our nations depended on educating the populace to prepare for the digital age. Then Steve Jobs came along.


It turned out the problem wasn’t our lack of education. The problem was that computers were just too hard to use. Once Jobs and Apple brought the graphical user interface to computers, and once processors became powerful enough to handle the demands of GUIs, the talk of computer literacy faded. Then came the iPad and iPhone, making an intuitive experience available on almost any device. If you asked a teenager to define “computer literacy” today, he or she would likely say, “Hey, Siri….”


The insurance industry is trying hard to move into a “Hey, Siri” phase, as companies focus on drastically improving the customer experience. Companies are finding that they have to reinvent chunks of their businesses to really get the experience right. Yes, they have to focus on the ways that they touch customers, through agents and brokers, through call centers, through adjusters and through an increasingly broad array of electronic means. But a customer doesn’t just experience a company through a direct communication. Customers also experience, for instance, how long and painful an underwriting process or a claim is.


And here’s the thing: This emphasis on customer experience requires a revolution for companies but merely an evolution for customers. Insurers have to move heaven and earth to add computing power, to deal with new kinds of data, to come up with new analytical models, to design new processes and so on. Consumers just have to add an app or a phone number so they can text a company, have to e-sign documents rather than printing and mailing them, etc. — and consumers have already been doing these sorts of things with other companies in other industries.


So, customers may understand at some level all the effort that has to go into changing how they experience an insurance company — but they don’t really care.


As you’ll see from this month’s interview, from the appended articles and from a host of articles throughout the website, lots of noble efforts are underway, and companies are making progress, but improving customer experience is a marathon, not a sprint. Every January, I publish articles about how this is the year that the industry will figure out the customer experience. Then I publish more of those articles the following January… and the January after that. Despite the undeniable progress, I don’t expect to stop publishing those pieces any time soon.


– Paul Carroll, ITL’s Editor-in-Chief


ITL FOCUS INTERVIEW

An Interview with Scott McArthur, CRO, Statflo

We spoke with Scott McArthur, chief revenue officer, Statflo, about the impact of digitization on customer interactions.


WHAT TO WATCH

3 Tips for Increasing Customer Engagement

Even before the pandemic, insurance customers were moving to digital channels and demanding the kind of smooth experience they get with Google and Amazon. With customers demanding new types of interactions and agencies and companies needing to increase leads in a world that’s gone from face-to-face to zoom, technology doesn’t have to be intimidating.



WHAT TO READ

Key to Better CX: Think Like NTSB

Airlines are rarely held up as exemplars of customer experience, but in one important respect the industry deserves such recognition.

 

Why CX Must Trump Efficiency

Companies talk about improving customer experience but focus too much on saving money. Customer process automation does both.

 

Providing a Better Claims Experience

It’s important to consider the communication preferences of five different generations when building a better claims process.

 

Self-Service Portals Improve CX

81% of companies expect customer experience to be a key battleground. Self-service portals are a great place to start.

 

3 Ways to Optimize Customer Experience

Even in a heated marketplace, a superior customer contact center can let life insurers grow.

 

Millennials Demand Modern Experience

To address the life insurance gap among millennials and create more financial security, the industry needs to move quickly.

 

How to Increase Profits With Connected CX

Fostering connected experiences is vital to meeting customer expectations and succeeding in a technology-centric world.

 



WHO TO KNOW

Get to know this month’s FOCUS article authors:


Andi Dominguez


Tina Hammeke


Ian Jeffrey


Renaud Million


Jon Picoult


Thiru Sivasubramanian


Kseniya Yurevich



Learn More about ITL Focus


Interested in sponsoring ITL Focus or learning about other promotional opportunities? Contact us


3 Ways AI Can Boost Customer Retention

The insurance industry has steadily been digitizing in recent years. It is taking advantage of technological developments in automation, offering apps to clients and introducing things like electronic proof of auto insurance.

PwC’s Annual Global CEO Survey in 2020 identified customer experience (CX) and core tech transformation as the top two opportunities for companies to set themselves apart, with CX significantly ahead. When customers are communicating with their insurance company, they are usually dealing with an awful experience (a car accident, a medical issue, a home invasion, a roof leak or a full-on natural disaster). Hitting any snags when it comes to getting the service they need is a big factor in driving them to a competitor.

Artificial intelligence (AI) addresses both customer experience and tech transformation and has helped insurance companies improve their services and stay competitive in a tough industry. AI enables many services and processes to be automated, resulting in both cost and time savings. But AI deployment also benefits customer experience, in three specific areas.

Improvement of policies, products and processes

The retail sector has capitalized on custom products and experiences, and the concept that one or two sizes will fit everyone is fading quickly in other sectors, too. The insurance industry is now also latching onto customization, as AI enables companies to leverage data to personalize a core product for an individual customer. 

A company’s AI model can use a client’s historical data to calculate with a high degree of probability that a particular product or policy will be the best fit. In the eye of the customer, they get an attractive product without needing to spend a lot of time on consultations with the broker. For the insurance company, the efficiency gains are impressive, and agents don’t need to spend a lot of time finding the right product for the client.

See also: How AI Powers Customer Contacts

Not only does AI improve the speed of crafting policies for customers, the technology can also speed up underwriting, as well as the claims process — two key touchpoints where turnaround time is essential for CX. If a health insurance customer is filing a claim for an expensive prescription, they will want a simple and quick resolution. Long waiting times may drive them to a competitor known for quicker reimbursements. But AI can bring a competitive edge to an insurance company if customers know they can expect trouble-free claims processing.

Enabling rapid online assistance

The days of customers playing phone tag with agents to get the information they want are long gone. Insurance companies can leverage AI on their platforms — both web and mobile — to allow customers to quickly find an answer to a question. The ability to more easily respond to inquiries from policyholders is especially important following a major event, such as a tornado or hurricane, when there is sure to be a high-volume of online interactions.

AI-powered chatbots have become the first touchpoint for customers in many sectors. When done right, they can give a major boost to an insurance company’s customer experience. Organizations can also save money by automating simple and routine online customer interactions, leading to another win-win situation where customers can quickly get to the information they need.

See also: Wake-Up Call on Ransomware

Using AI to test AI models

Once an insurance provider has an AI model in place to help with the crafting of policies and settling of claims — and the organization begins using it as an integral part of its daily routine — it is vital that the AI model suitably addresses four risk factors: accuracy, stability, flexibility and ethics. AI can be used to test these models against those factors.

Any AI model an insurance company employs should have a high accuracy score. Smart AI model testing will ensure that the results are reliable — with an agreed tolerance for the model, to protect a company’s profitability while appropriately managing their risk. Because data changes over time, testing will ensure that an AI model remains stable when there’s a change in the data in the ecosystem, or in the way the insurance company handles business. Such testing will also ascertain that the model is flexible enough to react to those changes while remaining accurate. 

Above all, AI can be used to test whether the insurance company’s AI models are ethical — meaning that they are not biased toward or against any specific groups of society. Even the largest dataset imaginable can be flawed or biased depending on the data that is included. Therefore, it is vital that these models be tested on a regular basis, to verify that the risk factors are being appropriately applied without bias, ensuring the company’s reputation and its brand.

Giving customers a reason to stay

As the saying goes, it’s cheaper to retain a current customer than to attract a new customer, so insurance companies need to look at technological innovations that can improve customer retention. By recognizing the value AI can bring to all aspects of the customer experience, insurance providers can deliver fast, accurate and fair service to policyholders. 

Whether a business provides health, car, home or other types of insurance, there will always be a line of competitors just waiting to snatch away disappointed and frustrated customers. What’s most important is for insurance companies to focus on giving customers reasons to stay.

The Finish Line Keeps Moving

Much has been written, and much has been done in the past decade regarding the customer experience in P&C. Progress has been made in understanding customer needs and journeys, implementing digital solutions for mobile and self-service capabilities and improving interactions with agents and policyholders. However, anyone involved in strategies and improving the CX in P&C is likely to admit that the industry is still in the earlier stages of the journey. It is clearly a marathon, not a short term, once-and-done project. But now, as a result of the pandemic and the momentous events of the last year, the race has changed.

A new SMA research report, Customer Experience in P&C: Transformation in the Pandemic Era, assesses the journey of P&C insurers. Companies covering the personal lines, small commercial and mid/large commercial market segments are profiled based on a survey of executives and SMA’s analysis of customer experience projects with insurers.

About one-quarter to one-third of insurers are in broader rollouts of customer experience strategies, with the personal lines segment being the most mature. There is a correlation between the status and maturity of CX officers and the level of overall segment maturity. There are two categories of CX-related projects that are vital to track: those that are strategy/organizational in nature and those that are oriented around technology capabilities. For example, flipping the lens from a customer service to a customer experience orientation and establishing a customer-centric culture are the top two project areas, signaling a recognition that these are foundational elements of a good CX strategy.

See also: Lessons on Reaching Customers Remotely

The project plans recognize the change that is underway. While it may be hyperbole to say the pandemic changed everything, the pandemic and all that it has entailed altered customer expectations and caused insurers to rethink and reprioritize plans. The short-term focus has been on enabling and improving self-service, digital payments and digital intake for both sales and service. Improvements will continue, but, in the meantime, P&C insurers have been taking stock of their customer experience journey – and this is where they are running a marathon. What once was movement at a steady pace has now taken on steadily increasing momentum. Virtually every insurer is accelerating digital transformation, and customer experience is an important element.

However, now that the expectations of agents and policyholders have risen, the finish line for the marathon has been pushed out. It is not as if there was ever a firm finish line where a company could claim it was “done” with customer experience. But the race is now taking some new turns, will require adaptability and may require a longer sustained effort to remain competitive.