Tag Archives: SMB

3 Biggest Cyber Threats for 2019

Cyberattacks on brands and organizations have become an all-too-common occurrence in recent years—and 2019 will be no exception.

Hardly any company is immune, regardless of the business sector, size of company or brand visibility. In fact, SMBs may be more vulnerable to computer attacks compared with their larger counterparts because smaller businesses tend not to invest in cybersecurity.

Many SMBs also lull themselves into complacency when it comes to cybersecurity because they think their company couldn’t possibly possess enough online assets to attract malicious actors online. But hackers don’t discriminate.

That was the major takeaway from a recent roundtable discussion focusing on how companies inoculate themselves against the growing threat of cyberattacks. The roundtable was hosted by Allianz Global Corporate & Specialty. I took part in the discussion, along with Steve Martino, Cisco senior VP and chief information security officer, and Gregory Falco, Stanford fellow, CISAC security researcher and MIT grad.

The panelists agreed that computer hackers want to sow chaos just for the sake of doing so. What’s more, the problem is likely to get worse before it gets better.

See also: Quest for Reliable Cyber Security  

With that in mind, here are a few areas that companies need to think about this year (and beyond) to mitigate cyber threats. Brace yourselves.

1. Disruption from ex-employees rises. You know the drill. An employee is let go, and, before he can catch his breath, the head of HR tells him to turn in his ID badge, gather his belongings and vacate the building. However, does the employee have a duplicate ID badge at home? Did he download any corporate data to his smartphone? Ex-employees looking to wreak havoc on their former employer happens more often than you might think. Indeed, according to a recent poll of 472 cybersecurity professionals by CA Technologies, 90% of organizations feel vulnerable to insider attacks. The cyber threat posed by former employees is liable to get even more challenging in 2019, what with jobs created and old ones phased out due to the digital lurch. To bolster their company’s cybersecurity efforts, CIOs and IT departments must sharpen company protocols regarding how to make sure dismissed employees do not possess anything digitally that may cause the company harm. Another way to sharpen oversight is to clamp down on company intranets and reevaluate the kind of information or data that employees are able to access.

2. Ransomware threats grow more acute. Online crime travels fast, and hackers always seem to stay a step or two ahead of the efforts among companies and organizations to thwart them. But the ability to combat cyberattacks won’t get any easier in 2019, as ransomware becomes more difficult to contain. Ransomware is a type of malware that restricts access to the infected computer system in some way and demands that the user pay a ransom to malware operators to remove the restriction. Ransomware demands are typically made in Bitcoin, according to ZDNet, the cryptographic digital currency based on blockchain. As Bitcoin has spiked in recent years, so, too, has ransomware. A survey by Osterman Research found that ransomware attacks were the most common in 2017, leading to massive losses to businesses from the inflicted downtime, per Alverez Technology Group. Many businesses had to shut their systems for extended periods—up to 100 hours or longer, the survey said. To get their hands around the problem, companies should think about expanding their digital teams to include computer engineers who specialize in combating ransomware.

3. Digitization of manufacturing poses new problems. Large manufacturing plants that were formerly analog are fast being converted into digital systems—and posing new cybersecurity threats in the process. Many of these new systems are designed to assemble, vet and distribute products more efficiently, and not necessarily to detect cyber threats. A growing number of connected devices throughout manufacturing plants gives bad actors additional “pipes” to breach. For example, closed-circuit TVs and internal computer networks—both of which are fairly prevalent in manufacturing plants—are significant targets for hackers. As AI becomes a more integral aspect of manufacturing plants—with fewer and fewer people on-site—manufacturers will have to ramp up their cyber defenses even further.

Is your company bringing any of the above cybersecurity strategies to bear? Is the board of directors tackling these questions head-on or sticking its collective head in the sand? Has the company sharpened both existing cyber defenses and training for rank-and-file employees on what to do if they spot something fishy in their email inbox?

See also: Best Practices in Cyber Security  

In 2019 (and beyond) these questions will be paramount for companies that want to protect their precious assets.

7 Things I Learned at Bold Penguin

This is my first week at Bold Penguin… marking the true beginning of my insurtech life.

I’ve followed insurtech for more than three years, writing and speaking on the movement, but my vantage point has always been one of the intrigued outside observer.

And while one week does not make you a qualified insurance technology startup guru, here are my first seven insights after diving headfirst into my new role as chief marketing officer at Bold Penguin.

1) Small Business Insurance Is the Holy Grail

McKinsey & Company has been referring to the SMB market as one of the “few bright spots” in the property/casualty insurance sector for years now.


Because no one owns the small business insurance space. The marketplace is fragmented, and generally speaking the commonly accepted customer experience is poor at best. Yet, done right, small business insurance is a growing and profitable market segment.

This is by no means breaking news.

That doesn’t diminish the fact that no one has small business insurance figured out, (except maybe…), making the SMB market the holy grail of meaningful organic growth for the foreseeable future.

2) There Is No Road Map

In case you’ve never worked for a startup before, there is no road map for success.

Insurtech startups are creating solutions that haven’t existed before. Look at the work that Chris Cheatham is doing in policy automation at RiskGenius or Mike Albert and Allan Egbert are doing in open APIs at AskKodiak.

Quite literally, they’re making things up as they go along.

…because they have to. The work lives in uncharted waters.

My point is, just as insurtech startups must mature into the greater insurance ecosystem that has existed for more than 400 years, the more traditionally oriented organizations (and individuals) must accept the slightly more haphazard nature of startup companies.

Insurance carriers with open-mindedness to the realities of trailblazing startups will position themselves out front as the partners of choice for insurtechs mapping solutions for our industry’s most challenging obstacles.

See also: An Insurtech Reality Check  

3) There Is a Race to Remove Friction

Research from a McKinsey & Company survey shows a 73% increase in customer satisfaction when customers reported they were pleased with the entire customer journey, not just specific touch points.

Winners and losers of the digital insurance revolution will be determined in the race to remove the most friction from the customer experience.

This doesn’t mean removing human agents or blowing up the traditional insurance carrier model. Rather, we must think of insurance as a service and create flow throughout the customer journey.

I joined Bold Penguin because it’s my belief that their solution will be the foundation upon which many winning agents, brokers and carriers build their unique customer journey.

Whether you partner with Bold Penguin or not, make no mistake, the race to remove friction is real and it’s happening right now.

If your organization is not having serious conversations about the customer journey, you’re already losing.

4) It’s Time to Ask “What if?”

It’s time for everyone to start asking “What if?” when it comes to the future of insurance.

  • What if APIs are the future?
  • What if customer experience is all that matters?
  • What if we can’t build it ourselves?
  • What if half our agency plant retires in the next five years?
  • What if our carrier partners demand digitization?

Whether you believe these scenarios will come true or not isn’t the point. The insurance marketplace is changing rapidly and being prepared for all the “What if?” scenarios possible is the only way to survive…

…because no knows what’s actually going to happen.

5) Disruption Is Dead

From now on, every time you hear the words “disruption” or “disruptor” come out of a startup’s mouth, your insurtech B.S. alarm should leap to life, the blaring sirens and seizure-inducing flashing lights overwhelming your senses while an impenetrable B.S. Protection Barrier envelops your entire body like some scifi force field.

Seriously though, disruption is not the answer.

Instead, insurtechs should focus on collaboration, facilitation and integration with traditional partners, building on the previous foundation as much as possible and alongside where it does not.

6) Culture, Culture, Culture

I’ve seen first-hand the impact a toxic culture can have on organizational success.

We live in a tumultuous time for workplace culture. According to the American Psychology Association, the workplace continues to be a leading cause of stress (with 61% of Americans listing work as a significant stress factor).

We’re under more pressure to spend more time, to get more done every single day. Work-life balance has become a cliche joke.

While I believe in hard work, giving more of yourself than is asked in the job description and just kicking ass in general, organizational culture must be a fit to achieve our goals of world domination.

Here are three aspects of insurtech culture vital to success:

  1. Always put staff satisfaction first. An inspired team believes, an uninspired team blames.
  2. Never blame the customer. Period. Own your outcomes. The customer may not always be right, but the customer is never wrong.
  3. Don’t take yourself too seriously. As an old mentor used to tell me, “Everybody ?s.”

I’m sure there are more. But these were the three most obvious to me after spending time at the Bold Penguin headquarters this week.

7) Your Story Matters

Your story matters as much as your product.

It doesn’t matter how amazing, revolutionary or game-changing your product or solution is, if your story doesn’t make sense, if people can’t connect the dots between your solution and how it benefits them and their organization, your product essentially doesn’t exist.

This is something we need to do better at Bold Penguin.

We’re not amazing at telling our story today.

We’re going to change that.

One of many reasons I joined Bold Penguin was that the whole story had yet to be told.

I feel like I’ve found a gigantic diamond just lying there on the sidewalk.

And while everyone else walks past, oblivious to the treasure they’ve just nonchalantly stepped over, to the trained eye all it takes is a craftsman-like approach to telling the story of what Bold Penguin can do for insurance agents, brokers and carriers to unlock industry defining value.

But Bold Penguin isn’t alone. Wait until you hear about what Joseph D’Souza is doing at ProNavigator, or Jason Keck at Broker Buddha, or Phil Edmundson at Corvus Insurance.

Having a great solution is the barrier to entry. For anyone to care about your company, you must to be able to tell your story.

See also: Innovation: ‘Where Do We Start?’  

The Rub

According to the most recent CIAB Market Study, “Driving organic growth, hiring and recruiting talent and enhancing the customer experience remain top organizational priorities” for the U.S.’s top insurance brokerages.

With 80% of CIAB’s responding agents and brokers listing “driving organic growth” as a top priority for 2018, it’s exciting to be part of a company working to solve organic growth concerns, not through disruption but through collaboration, facilitation and integration.

You can find the article originally published here on LinkedIn.

Click here to learn more about Bold Penguin.

Digital Playbooks for Insurers (Part 2)

In the first of my four blogs on insurer playbooks, we looked at the consumer market from the vantage point of a pre-game analysis. This week, we’ll once again be taking a pre-game approach to playbook development, but we’ll focus instead on scouting out this highly coveted small-medium businesses market for opportunities that may lie in understanding SMB ownership and size.

Playbooks are the core of game strategy. As many watched the Super Bowl, they saw well-honed playbooks in action, with some unique plays to leapfrog the competition and keep momentum — remember Nick Foles’ trick play touchdown! A playbook accomplishes several things at once. First, it gives the coach a group of testing plays that it will run against any team that it encounters. Once the coaches have a feel for the opposing team’s response to those plays, they are then free to quickly adapt their playbook to capitalize on opportunities the rest of the game.

Every team’s playbook is different, and for good reason. Certain plays that work for one team will not be compatible with others. The universal truth behind playbooks, however, is that they are forward-focused. Understanding the NEXT opponent is always more important than looking at your past opponents. In insurance, the same holds true. Understanding where the market is going, rather than where it has been, will help insurers efficiently use their time in preparation. Playbooks unify the insurer’s teams behind the best responses to industry change, ensuring they are in the game to win.

See also: Do You Really Have a Digital Strategy?  

In today’s blog, we’ll focus on pregame analysis, and in our next SMB blog we’ll look directly at ideal offerings that insurers can use to target SMB businesses.

SMB Segment Playbooks — Pregame Analysis

An important first step in any pre-game analysis is to obtain a thorough understanding of the background and context within which the game is occurring. The context has been shifting dramatically and rapidly. Insurance 1.0 business models of the past 30-plus years have been based on the business assumptions, products, processes and channels primarily for the Silent and Baby Boomer generations, who built traditional small-medium businesses (SMBs) such as flower shops, retail and automotive repair. As the millennials and Gen Z mature and increasingly become entrepreneurs of new businesses or take over existing businesses, we see the next generation of SMB owners whose influence is growing and intensifying. They are shifting the fundamental business models of all businesses, including insurance, by demanding the use of digital technologies, new products and services that align to their demographics, needs and expectations … creating Digital Insurance 2.0. This will fuel tremendous growth for both SMBs and insurers.

Adding to this growth momentum are unprecedented expansion opportunities for commercial, specialty and group/voluntary benefit insurers in terms of new risks, new markets, new customers and the demand for new products and services. So, having a scouting report to capture these opportunities before others, including new competitors from insurtech or greenfields launched by existing insurers, is more important than ever.

Scouting Reports

Driving that point home, the results from this year’s SMB research underscore an acceleration in changing behaviors and interest in using new business models and technologies that are reshaping insurance. When it comes to experience with these technologies and trends, there is a clear, strong interaction between business owner age (generation) and the size of the company (number of employees). Cumulative participation rates in the behaviors we asked about increase with company size; but within each company size category, they also are at their highest levels with the Gen Z/millennials group and decrease with increasing age for older generations.

Given the strong interaction effect caused by these two factors, we grouped the SMBs in our survey into eight segments based on three generation groups (Gen Z & millennials, Gen X and pre-retirement Boomers) and three business sizes (1-9, 10-99 and 100-499 employees).

Similar to our companion consumer research study highlighted in our last blog, we categorized our analysis of the segments’ participation in these behaviors into six key areas: gig economy, connected devices, payment methods, products, channels and other emerging technologies. Here are some of the highlights:

  • All segments are actively engaged in the gig economy, both as providers and consumers of independent contractor/freelancer services – averaging between 36% and 40%. The smallest companies are most likely to have been an independent business based on working as an independent contractor.
  • There is strong, widespread use of apps and connected devices in buildings across most of the segments, with the highest use of 44% by Gen Z/millennials and Gen X in companies with 10-99 employees, followed by a third of those in the largest companies.
  • Use of connected devices in company vehicles is less prevalent, but nearly a third of Gen X/millennials with 1-9 employees and Gen Z/millennial and Gen X in companies with 10-99 employees are actively using this technology.
  • Use of ApplePay and SamsungPay is strong among all segments except pre-retirement Boomers with fewer than 10 employees. Overall, the increased use of digital payment capabilities is heightening growing expectations across these segments for all types of purchases, including insurance.
  • On-demand insurance was particularly strong, with 13% to 41% already purchasing it for a specific event, and with high rates of usage among Gen X and pre-retirement Boomers. Between 30% and 50% of the Gen Z/millennial and Gen X segments are experienced with cloud-based subscription products, highlighting their comfort in purchasing products with this business model approach.
  • Most segments have had experience purchasing insurance from a website, with Gen Z/millennials leading the use of this channel at 19%-39%.
  • The Gen Z/millennial segments slightly lead the older generations in their use of drones and 3D printers (or items produced by one) with usage at 10%-13%. Interestingly, 30% of the Gen X/Boomer 100-499 employee segment reported the use of a 3D printer. These are two rapidly-growing technologies that create new risk implications and, as such, require new products and services.
  • The behavior and expectation increases for Gen X and pre-retirement Boomers coupled with the already high levels for Gen Z and Millennials are driving significant interest in innovative products and channels for insurance, with millennials and Gen Z leading the way.
  • A strong appeal among SMBs for reducing costs and risks through value-added services and social networking options stood out.

As new companies emerge and the leadership of companies, both large and small, continues to move to the Gen Z and millennial generations, use and expectations around digital technologies and activities will continue to accelerate, influencing new behaviors, needs and risks that require innovative insurance products and services represented by Digital Insurance 2.0.

Time to Up Your Game

Both traditional business insurers, intent on keeping pace, and startup insurers, intent on staying ahead, are grasping the tremendous gap in SMB coverage and its corresponding opportunities for growth. Digital Insurance 2.0 models are proving themselves to be more valuable and relevant to today’s SMB owners. To look more deeply at model impact, Majesco tested four business models within our survey group to find out which models would resonate with business owners. We also went one step further and examined 30 attributes that can be used to build Digital 2.0 models. Suffice it to say, the responses across these models reached 50%, and with the swing group up to 80% or more across many of the segments, highlighting the competitive threat posed by these new business models.

See also: Linking Innovation With Strategy  

In my next blog, we’ll look deeper at the survey results and see how our SMB segment playbooks confirmed the need for different market and product strategies. We’ll tie the most popular of the 30 attributes to specific SMB segments and suggest ideal offerings for insurers hoping to reach those segments. For an in-depth look at Majesco’s findings, download and read Insights for Growth Strategies: The New SMB Insurance Customer.

Digital playbooks are essential to accessing the hard-to-reach SMB customers. Without shifting to a Digital Insurance 2.0 framework, they will be even harder to capture … let alone retain in the coming years, putting insurers stuck in Insurance 1.0 at risk.

Are you ready to move to Digital Insurance 2.0 and capture your share of the $80 billion to $100 billion SMB opportunity?

What SMBs Want in Group Insurance

In my last blog, we established the rationale for group and voluntary benefits providers to consider new business and technology strategies. The market is changing. Market drivers should be pushing carriers to recreate themselves to meet the needs of employers and employees.

As a part of that blog, we touched on group and voluntary benefits for the small-to-medium business market. Nearly every group insurer recognizes that there is opportunity within the SMB market segment, but they need confirmation that: a) They understand what SMBs really want from group and voluntary benefit providers, and b) they grasp how they can employ technology to meet those needs.

So, in today’s blog, we will look at the answers to those issues in greater detail.

What do SMBs really want from their group insurance providers?

SMBs want insurance without huge costs. They care about premiums, and they pay attention to how much it costs to simply administer benefits. It takes time to educate employees, enroll them and handle their day-to-day benefit issues. SMBs recognize when an insurer is taking steps to remove administration hurdles and headaches, and they appreciate a streamlined, automated process that will reduce internal administration.

SMBs see innovative voluntary benefits as a differentiating employee acquisition and retention strategy. The unemployment rate is at a record low 4.1% in the U.S., plus we are seeing an increasing move of millennials starting new businesses and a shift of many into the gig economy.  This means that job seekers have options and choices. So, employers must have competitive and compelling voluntary benefits packages that meet the needs and expectations of a changing workforce.

Wearable technologies make a great addition to SMB employer offerings. Employers want health-focused, wellness incentives for healthy habits and exercise to keep costs low but also to align to changing expectations. In our new consumer research, The New Insurance Customer – Digging Deeper, we found that all generations use fitness trackers like Fitbit and that using a fitness tracker is one of the top three digitally performed activities that will have an impact on insurance. So, group and voluntary benefits providers that can integrate products with wearables or mobile tracking may get a second look.

SMBs want to have a wider selection of voluntary choices from their benefit providers. With the emergence of a new set of employee expectations and a competitive marketplace for talent, particularly for millennials and Gen Z, many companies are recognizing the value of voluntary benefits and the potential to offer options that appeal to the unique needs of different employee segments. Each segment has different needs and expectations, and a one-size-fits-all offering does not necessarily work.

See also: SMBs Need to Bulk Up Cyber Security  

Millennials and Gen Z are carrying large student debt loads, and many Baby Boomers are delaying retirement and are facing rising healthcare costs and low wage growth. In line with these issues, there are several voluntary benefit options that are expected to grow in popularity for these different generational groups among mid- to large-sized employers, according to Willis Towers Watson:

  • Long-term care – 30% now, 52% by 2018
  • Student loan repayment – 4% now, 26% by 2018
  • Pet insurance – 36% now, 60% by 2018
  • ID theft – 35% now, 70% by 2018

Self-funding is an area of interest for SMBs. SMBs that have carefully weighed the risk of self-funding, and that have a reasonably healthy employee base, stand to save a tremendous amount of money. Self-funding, however, still requires a carrier of some kind for administration purposes. Insurers that design self-funding plans into their overall offering stand to gain, because they can offer it as a “future” option for employers that may want to change or as an instant option for those that are ready today.

Group insurers can also look to the consumer market for preference and demand trends. In Majesco’s report, The Rise of the Small-Medium Business Insurance Customer, we found that, “insurers should reevaluate their digital and business strategies for small business owners and align them more closely to personal lines.” We also found that:

  • SMBs are thirsting for products that will lower their risk. SMBs are highly risk-conscious, and very in-touch with their employees, making them an excellent market for group products. The desire for lower risk also makes them likely to be open to technologies that will assist.
  • They are not unwilling to share relevant data if it gives them discounts or added protection. This will allow insurers to better control risk over smaller employee populations.
  • They are ready for easy-to-understand and easy-to-purchase solutions. The smallest businesses, those with one to nine employees, represents the largest share of the SMB market, yet they find it much harder to research, buy and service insurance. New insurers or MGA startups are capitalizing on this gap in service.
  • They are willing to break from tradition. SMBs have extremely low loyalty rates across all lines of insurance, and they are highly receptive to insurers with non-traditional offerings or value-added products.
  • They long for personalized service. This doesn’t mean that they need face-to-face service. It means that they need an organization that can customize products to fit the business need and have easy-to-use touchpoints for administration and communication.

What should group insurers seek from technology to meet the needs of the SMB market?

Here are some high priorities that group insurers should consider when they are looking at technology options:

Digital front end

In all of Majesco’s research, we have found that the most important driver for SMB buyers is ease of research, purchase and servicing. A digital front end will provide engaging, easy enrollment. It should come with claims technology and tracking that makes the process simple. It should somehow manage a process of continual engagement. It should provide service options that make it simple for SMB HR departments to administer the products, plus it should offer self-service administration options for employees to remove simple tasks from HR.

Speed to market with new products

Open enrollment happens every year, and it is on a fixed schedule. New products can’t simply be rolled out at any time. Insurers need quick methods for defining and testing new products, so they can offer and be ready when employers are putting together their benefits packages. Technology can help. Today’s cloud-based group product alternatives include pre-built rates, rules and products that can be up and running in a very short time. Group insurers can use these outside of core systems to add new products, services or whole new lines of business.

This is especially effective when considering the development of new personal property and casualty insurance as voluntary insurance. Many group insurers can’t consider these new types of offerings without first acquiring the technology to make it happen. Speed-to-market solutions are now far easier to implement and use than with traditional group systems.

Actionable data and consumer insights down to the individual consumer

Group products, and even SMBs, aren’t all governed by HIPAA-level data constraints that amalgamate individual data into company or community pools. Many types of voluntary products will yield individual data that can help employers and insurers manage risk.

Actionable data, such as social data, wearable data and behavioral data, should be gathered and analyzed. Insurers need a data framework in place that will add value to employers and employees.

An ecosystem for benefits administration

Group insurers should avoid burning their IT budgets with over-customization, or intensive integration or the maintenance costs of trying to keep obsolete technologies alive. An ideal technology solution leverages the best solutions in the market by building an ecosystem of best-of-breed solutions coupled together with a framework that will allow the ecosystem to accept plug-ins for today’s and tomorrow’s services and technologies.

The digital era shift is realigning fundamental elements of business that require major adjustments from insurers for them to survive and thrive. There are a multitude of potential futures for group, employee and voluntary benefits insurers in an increasingly volatile world. The rapid and unprecedented pace of change will drive out old business models and allow new ones to flourish with the introduction of products and the offering of new services, and much more, from both new insurtech startups and established insurers.

See also: Cyber Insurance Needs Automated Security  

At the heart of the disruption is a shift from Insurance 1.0 of the past to Digital Insurance 2.0 of the future. The gap is where innovative insurers are taking advantage of a new generation of buyers, capturing the opportunity to be the next market leaders in the digital age. The next wave of growth is expected to come from their ability to provide superior customer experience – not just in comparisons with other insurers but also in comparisons to all companies with which their customers interact.

There will be constant pressure from startups backed by venture capital, the M&A between traditionally different businesses like CVS and Aetna, the entry by big tech such as Apple, Amazon and Google into insurance and the digital transformation of existing insurers in the digital race to meet those needs and capture more share of the enormous opportunity in the market.

The time for understanding, planning and execution is now to capture these new opportunities for group, employee benefit and voluntary insurance. Those who recognize and rapidly respond to this shift will thrive in an increasingly competitive industry.

This article was written by Prateek Kumar.

Much Higher Bar for Customer Service

“It’s all about the customer.” How often have we heard that statement?  More times than we can count, Yet it is more relevant than ever as we exit the “pre-digital” age and enter an environment where survival will be measured by rapid adaptability (see our recent blog post An Ocean Apart: Pre-Digital and Post-Digital Insurance Models).

In our prior posts, we focused on two areas of the insurance value chain that likely are not top of mind when thinking about digital transformation — billing and claims.  In this post, we’ll cover policy and customer serving, which is certainly a higher-profile area for digital enhancement. Policy and customer servicing should be near the top of insurers’ “to do” lists when it comes to embracing the digital shift and transforming into a digitally optimized, customer-focused enterprise.

While many insurers express the desire to become more digitally enabled, most are struggling to catch up, let alone position themselves as leaders. Technology is evolving, and customer demands are growing faster than most companies can deal with. Add to this the challenge that insurers are often saddled with legacy systems, siloed data and product- (not customer-) focused processes that make anticipating and adapting to these changes all the more difficult.

A McKinsey survey from earlier this year reported that most insurers in the U.S. and Europe focus their digital attention on sales and marketing, in particular on the earliest stages of the lifecycle — research and quoting. While these two areas are important, the survey noted that insurers were lagging in their ability to service customers digitally after they were on-boarded.

See also: Key to Digitizing Customer Experience  

Improving Customer Service Is a Great Way to Differentiate

Majesco’s primary research studies on consumers and small-medium businesses showed that, compared with other industries, insurers are pretty bad at service. Life insurers are ninth out of 10 in terms of “ease” of servicing (of the industries shown in comparison, only streaming TV/video/music gets poorer marks for service), while P&C insurers are in fifth place (behind online banks, local retailers, national retailers and online retailers). All small-medium businesses (SMBs) ranked life insurers and employee benefits providers no higher than eighth out of 10 different industries they use as suppliers. P&C insurers also ranked low (fourth out of 10) among the smallest SMBs (those with fewer than 10 employees), but fare much better among larger companies, rising as high as third and second.

Furthermore, our research noted that poor marks have a demonstrable effect on success. If a respondent reported that any one of the aspects surveyed (research, purchase, service) was “not easy” then their Net Promoter Score dropped significantly. And NPS is recognized as a key predictor of a company’s growth and profitability.

According to Celent research, even agents, who are understandably worried about digitally enabled self-service reducing their importance in the sales process, recognize the need for digitization of insurance service processes. The research notes that agents are asking insurers to invest in technology enhancements to, among other things, improve online policy changes.

But It Isn’t Easy (of Course)

At first glance, policy and customer service appears to be an important and straightforward – if not particularly sexy – way to apply digital capabilities to improve outcomes. But looks can be deceiving.

Some of the basic tenets of good service – a 360-degree view of the customer, for example – can be difficult and expensive to implement. Regulatory barriers may prevent streamlining how policy changes are implemented online, varying significantly from state to state and country to country. Legacy policy management systems may not be able to connect to digital front ends in a direct way.

But all of these challenges provide an opportunity to focus on a customer journey-map-based approach to digital transformation! By starting with a vision for digitally enabled customer service (what you want the service experience to be, what business goals you are trying achieve, what key performance indicators you will measure for success) and then creating customer personas and journey maps, you will be able to create a transformation road map. That road map will include people, process and technology changes that you will make over time to reach that vision, allowing for incremental change (instead of taking a riskier, big-bang approach to changes).

Don’t Ignore the Shiny Objects

Just because we recommend an incremental approach doesn’t mean it can’t be fun! There is a lot of cool and interesting insurtech investment in this area, which can (and often should) be leveraged to roll out needed functionality without having to build it yourself.

For example, having e-signature (and as per this blog post on digital billing) and multiple e-payment capabilities can make a policy change paperless and seamless for the customer, something that has been shown to improve service “ease of use” scores. Chat capabilities (human or chatbot) to walk customers through basic to tricky processes is a boon to customer service, with leaders like Lemonade and Geico leveraging them at almost every step of the customer lifecycle. Co-browsing options can be used to help customers navigate particularly tricky process steps. Customer analytics can be used to identify customers at risk of leaving, help them manage their risks and even identify cross- and up-sell opportunities.

Even artificial intelligence (AI) shows promise in customer service, and far beyond just chatbots. IBM’s Watson is assisting customer service efforts in dozens of industries, and all indications are that it will be especially useful in insurance, where matching customers to products and services can help generate revenue and improve customer satisfaction. An excellent non-insurance example is the work Watson is doing with H&R Block. Watson is used to feed appropriate question prompts to tax professionals during client consultations. Bill Cobb, H&R Block president and CEO, said, “Watson is learning more and more as it does more tax returns.” According to a recent IBM blog, “Watson has learned 600 million data points relevant to the industry as well as the U.S. tax code.”

Imagine Watson in insurance, rolled out to give agents prompts based on both individual knowledge and “learned” experience. Watson will help insurers translate regulatory requirements and improve relationship management. Cognitive customer service will give real depth to the possibilities. The Future Today Institute has stated in its 2017 Tech Trends Report that artificial intelligence will soon be integrated into nearly every facet of work life. In a detailed look at industries covered in the report, AI is the #1 trend in every industry.

But Keep an Eye Out for Pitfalls

One potential pitfall is to think this service mentality applies to just personal lines, which, as I’ve highlighted in my other blog posts, is far from the truth. Commercial carriers have a lot to gain from digitally enabled servicing, particularly in the SMB market, where margins can be thin on a per-policy basis. Commercial carriers may be very amenable to service outreach that includes risk-mitigation advice as well.

See also: ‘It’s the Customer Experience, Stupid’  

Insurtech is not just for personal lines, either: A recent SMA study highlighted more than 400 insurtechs targeting the commercial space, and the carriers themselves are interested in leveraging them for, among other things, customer servicing.

Other pitfalls include trying to do too much at once or taking a scattershot approach to service improvements. These dangers reinforce the critical importance of leveraging customer journey mapping to create a disciplined approach to capability deployment.

How to Start

As we have consistently advocated, start with a vision of what you want to achieve. Check this against other investment priorities and pain points for your customers and other stakeholders (for example, if the biggest area of complaint is with the claims process, you may want to consider starting there). Create personas and journey maps to guide your decision-making.