Tag Archives: digital channels

Insurers Fail at Digital Experience

Despite the growth of digital channels, insurers seem to be stuck in an analog world, unable to respond accurately, quickly or consistently to customer queries asked via the web, email, Twitter, Facebook or chat, according to new research that we’ve done.

Insurers could only answer 28% of queries across digital channels, and 14% of companies failed to respond successfully on either email, social media or chat. While email was the strongest channel for answers, with a 37% success rate, the average time to receive a response was nearly two days (1 day 23 hours 38 minutes).

These are the top-line findings of the 2016 Eptica Insurance Multichannel Customer Experience Study, which evaluated 100 leading U.S. insurers, spread across 10 sectors, on their ability to provide answers to routine questions via email, the web, chat, Facebook and Twitter. Additionally, 1,000 consumers were polled on how long they were willing to wait for responses on these channels.

The study measured the ability of insurers to provide answers to 10 routine questions via the web, as well as their speed and accuracy when responding to email, Twitter, Facebook and chat. Questions were deliberately similar to those that consumers ask, such as around purchasing or administering policies online, discounts for multiple products and when cover would start.

Insurers provided answers to 30% of questions on their websites, 23% in response to Facebook messages and 12% to tweeted queries. There were big differences between particular sectors – pet insurers answered 57% of questions online, compared with 16% among long-term care providers. One dental insurer responded to an email in 13 minutes – yet another took more than 6 days to answer the same question.

The insurance industry is at a crossroads, with the rise of digital disrupting traditional ways of doing business. To succeed in this new world, insurers need to prioritize the digital customer experience, yet the Eptica study shows that they are struggling to adapt and move away from analog channels. Digital doesn’t just benefit consumers, but also drives greater efficiency and enables innovation – it is therefore time for insurers to learn from their peers in other industries and apply best practice to their operations to meet changing customer needs.

See also: Answer to a Better Customer Experience?  

The research found that insurers are out of step with consumer expectations. While more than half of consumers (57%) expect a response on Twitter within half an hour, just 26% of insurers met this deadline, with the majority of replies not answering the queries. 61% of consumers complained that they could not find information on company websites half the time they looked for it.

On social media, speed varied wildly. One long-term-care insurer successfully responded to a tweet in less than two minutes, while 13 companies answered on Facebook within within minutes. Yet at the other end of the spectrum, 20 insurers took more than six hours to respond on social media, with three taking a day or more. There was little consistency between different channels, showing that many are taking a silo-based approach to customer service that pushes up costs and slows service.

Additional key findings included:

  • 68% of responses on email, Twitter and Facebook asked the researcher to change channel and call, even for the most basic queries
  • 47% of insurers failed to provide consistent answers between different channels
  • Just one company replied on all four channels of email, Facebook, Twitter and chat
  • 17% of insurers claimed to offer chat, yet only 5% had it operational when they were evaluated
  • Nearly half (46%) of consumers said they’d spend just five minutes searching for information on a company website before giving up and going elsewhere
  • U.S. performance trails the U.K., where insurers answered 54% of all questions, 80% of those asked via email and 45% of those made via the web.

Eptica Insurance Multichannel Customer Experience Study methodology

In total, 100 company websites across 10 different insurance sectors were evaluated in September 2016:

  1. For their ability to answer 10 basic, sector-specific questions via their website, such as, Can I purchase my policy online, or, How can I cancel my policy?
  2. On the speed and accuracy of their response via the email, Twitter, Facebook and chat channels.
  3. On the consistency of responses across the web, email, Twitter, Facebook and chat.

Consumer research on channel expectations was conducted by Toluna with 1,000 American insurance buyers in September 2016.

See also: How to Redesign Customer Experience  

The full 2016 Eptica Insurance Multichannel Customer Experience Study, which includes a full listing of companies evaluated, a detailed sector by sector breakdown of performance and full analysis, can be downloaded from http://www.eptica.com/insurance-multichannel-customer-experience-study.

An infographic illustrating the results is available from:

PDF: http://www.eptica.com/infographic-insurance-multichannel-cx

JPG: http://www.eptica.com/infographic-2016-insurance-eptica-multichannel-cx

Hey, Pharma! It’s Time for a Change

As Bruce Buffer, voice of the UFC, would say, “IIIIIIIIIIIIIIIIIIIIIIIT’S TIME!”

In this case, it’s time for big pharma to stop just defending its prices and to start to tap into the consumerism that is transforming healthcare.

Check out these stats (mostly from Google and Decisions Resources Group):

  • One in 20 online searches is for health-related questions.
  • According to comScore, health topics are the No. 1 search category on mobile.
  • 72% of people with pre-existing conditions searched for medical info online.
  • Half of all patients and caregivers already turn to digital channels to look up formulary or dosing information.
  • After a diagnosis, 84% of patients searched for options.
  • In a report by Decision Resources Group of 1,000 physicians, more than 50% reported their patients are more actively involved in treatment decisions — and these doctors called on pharma to support affordable options, provide relevant information and make online information more understandable.

The latest survey from Medical, Marketing & Media (MMM) shows 76% of pharma respondents use digital marketing, but the channel segregation below shows respondents devoted the greatest percentage of their marketing budgets to professional meetings/conferences and sales reps/materials. Digital channels — including websites, digital advertising and social media — lagged behind.

More surprising is that only half of both large and small pharmaceutical companies see the growth of consumerism in healthcare as an opportunity. But that’s EXACTLY where the opportunity for growth lies. To thrive in the new era of value-based care, pharma companies will need to change their marketing strategy toward partnering and will certainly need to focus far more on the individual consumer.

See also: Checklist for Improving Consumer Experience  

Trying to scare politicians away from lower-price reforms with the “It will kill our R&D” excuse is becoming the “BOO!” that no longer scares the grown-ups. Both 2016 presidential candidates, Hillary Clinton and Donald Trump, plan to stimulate price competition through imports — and there is bipartisan pressure to lift the ban on Medicare’s negotiating drug prices. Apart from trade groups and shareholders, high-priced pharma doesn’t have many friends.

Payer pressure is bad enough, but if you don’t get into the value-based care game, you are going to be on the wrong side of a very emotional equation.

Patients have greater financial burdens because of higher deductibles and greater cost-sharing requirements, with varying medication tiers. Providers are ever-burdened with less time, and, now, a greater level of risk is being put on them to deliver higher-quality care, better outcomes and greater patient satisfaction — all at a lower price.

Patients are not just seeking advice from providers. They are increasingly online, and at all hours. Plus, we’re going to start to see greater levels of patient-generated healthcare data with wearables and digital technology. And, as we have seen, half of consumers spend their online time on social media. (HINT: Tap into consumers’ behaviors and beliefs, show that you genuinely care and engage them in ways that let them feel as though you are part of their health team.)

The writing is on the wall. Consumers are practically screaming out what they want and need from you. Partner with wearable and EHR companies. Start developing ways to capture and interact with your customers — specific to individuals, at the best times to engage. Find ways you can partner with hospitals, physicians and affordable care organizations (ACOs) to get into their care pathway in ways that help them lower costs to patients and payers.

See also: Stop Overpaying for Pharmaceuticals  

Say “yes” to predictive modeling, big data, analytics, lots of testing and customer segmentation. “Yes” to retaining some of the traditional marketing. Most of all, become human in your approach. Put yourself out there and let people know that you are no longer on an island, separate from everyone else. Let them know your port and beaches are open to more boats and more people than ever before.

Global Insurance IT Spending Set to Top $100 Billion

As conditions in insurance markets worldwide slowly improve, CIOs are beginning to re-assess their strategies to drive a new set of IT priorities and are increasing their IT budgets.

The new reality of only modest premium growth in most mature markets is driving focus on simultaneously improving operational efficiency and organizational flexibility. As a result, Ovum is seeing the re-emergence of IT projects focused on legacy system consolidation/transformation and replacement.

Within emerging insurance markets, expanding core platforms and infrastructure to support growth in these regions remains the priority.

Consumers' demands for “anywhere, anytime” interaction continue to drive significant IT investment in digital channels across all regional markets.

These findings come from the latest Ovum Insurance Technology Spend Forecasts, available on the Ovum Knowledge Center. These interactive models provide a highly detailed breakdown of IT spending through 2017, segmented by geography, insurance type, insurance business function, and IT category.

The sharp decline in new business growth across all life insurance markets following the global slowdown led most insurers to rapidly and significantly cut their IT budgets. However, accelerating year-on-year growth in 2013, following some cautious expansion from 2011, confirms that life insurers are now moving from a cost-cutting mindset toward reinvestment in strategic IT projects. Ovum expects this growth in IT budgets to continue at a 7.6% compounded annual growth rate (CAGR) between 2013 and 2017 to reach a global value of just over $49 billion.

IT spending across global non-life insurance markets varies less and has generally lower growth rates. However, Ovum expects IT spending by non-life insurers to grow at a 5.7% CAGR overall to reach $60 billion in 2017. IT spending in the most mature regional markets of North America and Europe will continue to remain significantly greater (at least twice the size) than the faster-growing Asia-Pacific region beyond 2017.

As insurers emerge from short-term cost-cutting, CIOs are beginning to prioritize projects that drive customer acquisition and retention or improve operational effectiveness – ideally both. All insurers should at least be re-assessing their current IT approach to ensure sufficient focus is given to revenue-growth initiatives, to prevent becoming stuck in a “maintenance only” IT strategy.

Within the European markets, intensive competition and prolonged slow premium growth is driving a focus on customer retention, with online portal projects being key IT initiaitives for many life insurers. These initiatives are a critical means of driving process efficiency, reducing operational costs, and responding to the demands of policy-holders for self-service functionality. As the requirements of Solvency II recede and the imperative to deliver sustainable reduction in operational costs becomes increasingly urgent, European life insurers are also refocusing on the issue of legacy system modernization. Legacy systems are not a new concern, but market conditions are now forcing insurers to address the problem. As a result, Ovum expects to see continued expansion of IT budgets in support of consolidation/transformation and core system replacement projects, to reach annual spending of nearly $5 billion by 2017.

A key priority driving IT spending by North American life insurers is the need to comply with emerging regulation such as the National Association of Insurance Commissioners (NAIC) Solvency Modernization Initiative (SMI). The impact of regulatory compliance on IT budgets will continue to be felt up to 2017, driving spending on enterprise risk management (ERM) and enhanced management information systems (MIS) in particular. Ovum forecasts a 9.7% CAGR in this area.

The Asia-Pacific region will see the most significant growth at an 11.6% CAGR to reach annual IT spending nearing $15 billion by 2017, overtaking the European market to become the second-largest regional market. This expansion is being driven by life insurers needing to “build out” core systems and infrastructure to capture the strong growth opportunities in the region.

The goal of increasing new revenue through greater customer interaction is a critical objective for non-life insurers in both the North American and Asia-Pacific markets. Although North American non-life insurers are already well advanced in terms of online channel deployment and functionality, Ovum expects budgets directly related to digital channels to grow at a 9.0% CAGR, with mobile and social media emerging as the key focus of channel-related IT projects. Among Asia-Pacific non-life insurers, Ovum expects advanced functionality (such as policy application, quotation, payments, claim tracking, etc.) served via digital channels to see rapid development in the next 24 months.

European insurers in general are less advanced in the implementation of digital channels than their North American counterparts, although there is significant variation between individual players. However, Ovum expects this gap to rapidly diminish as the deployment of online portals and mobile channels emerges as a key priority from 2013 onward. IT spending in support of digital channels will grow at a 7.4% CAGR to 2017, with much of this growth occurring early on.