Insurance is an organic ecosystem. Now, that may sound odd, but hear me out, it makes sense if you think about it this way; It grows and adapts with us and our needs throughout our lifetime. As our journeys pivot, circumstances change, it adapts and provides the right amount of protection at the right time. Buying a house? Starting a new business? Starting a family? All of these major life events certainly impact each and every one of us in different ways. Insurance not only provides peace of mind, it enables us to take on every single one of these major life events with the knowledge, and indeed relief, that somebody has our back, and we will be protected at that time of need. For insurance to thrive as an industry, it needs to flow with us on this journey. Unfortunately, the reality of the matter is that more often than not, friction has been in the driving seat.
In my first article of the series, I spoke about “The Two F's”—the emergence of InsurTech as a direct response to a fragmented value chain and a customer experience that has been polarized by friction. In the couple of months that have passed since, the world has changed, and the insurance industry is under greater scrutiny than perhaps ever before. Transparency, responsiveness and claims handling are all under the microscope and it is up to us as an industry to respond in kind.
For an industry that has for so long struggled to engage the community, there have already been some bright points and areas that have seen some truly significant improvements. Case in point: auto insurance: 2019 has seen a continued climb in customer satisfaction:
"Auto insurance customers have more access, control and visibility into the details of their policies, and that is translating into record high levels of customer satisfaction." said Robert Lajdziak, Senior Consultant for Insurance Intelligence at J.D. Power.
The CAV Model
When you break down the key ingredients that are helping drive this move towards increased customer satisfaction, it starts to make sense. The key elements can be broken down into three broad areas:
Control -> Bundling and packaging of multiple lines into a single platform. Companies like Finmaal are making enormous strides in creating an experience that provides a 360° view to customers across multiple lines of business and adapts with their needs as circumstances change.
Access -> Personalized Digital Portals (self-servicing). Companies like Embroker, WeFox and CoverWallet have created digital platforms that foster a much higher level of engagement and transparency with the customer. As a result, we see much greater:
Visibility -> Perhaps one of the key areas where insurance has consistently struggled—how do we bring greater visibility, and therefore trust, into the industry? Companies like Care Bridge International and Hazard Hub are bringing solutions to the table that place a greater emphasis around intelligent data and open the door to innovative solution-ing that require advanced insight and rapid decision making that can be delivered at scale.
When you think about technology and the opportunity that we have to make a tangible impact within the industry, Control, Access, Visibility are all key ingredients to a customer experience that promotes transparency, ease of use and accuracy. Technology becomes the enabler.
From Friction to Flow
The journey from friction to flow is not an exact science. Technology brings enormous potential for change, but the hurdles and obstacles along the way are many and require a delicate balance of structured planning and open-minded innovation. Open-minded innovation in the form of re-thinking and re-imagining the insurance experience: design-thinking and customer journey mapping exercises can help teams who are accustomed to working within slower, more traditional working environments dream about the art of the impossible. Here is a blank canvas: What sort of experience and journey do we want to create for our customers?
Structured planning in the form of looking at a process hierarchy and applying a standardized methodology. As a Lean Six Sigma Green Belt, I am partial to the DMAIC approach: Define, Measure, Analyze, Improve, Control. Consistency around planning and governance open the door for innovative thinking. More guts and less glory. At a company like ReSource Pro, the art of Kaizen—a Japanese term meaning "change for the better" or "continuous improvement"—is embedded within the company culture. This is a structure that helps foster a culture of innovation from within.
The claims journey is one that typically has seen a lot of friction, the result of fragmented and antiquated processes running behind the scenes. For insureds, it is typically a stressful and nerve-wracking experience, driven by uncertainty.
For insurers, the struggle is to deliver a compassionate customer experience. The challenge is exacerbated by confusion around what the insured IS insured for, what the insured THINKS they ought to be covered for and perhaps most damaging of all, what the insured SHOULD be insured for. Lack of consistency across all three creates noise across the insurance value chain that is perhaps loudest and most noticeable at the moment of claim. It is also where trust within the industry is at its lowest point.
2020 & Beyond
As we move towards the second half of 2020, there will be a greater need for digital tools that deliver a superior digital and customer experience and help drive organizations towards delivering an organic customer experience that adapts with their needs and enables a much more proactive insurance experience.
For insureds, the rest of 2020 and its relative success will be dictated by the response to COVID-19. Clarity around claims related to COVID-19 will be a critical part of the success story. For carriers, insight around the potential cost of treatment from COVID-19 related claims will be essential to accurately forecast future care and medical reserves. Digital tools like the Analytic Powered COVID-19 Calculator will help companies make faster, more accurate decisions at scale and remove some of the uncertainty from the picture.
The next step on this journey is how to integrate and bring together solutions like these within an ecosystem that not only drives efficiencies, but also brings a greater level of insight and joy to the customer journey. In part three of the series, I will take a closer look at how companies across the insurance industry are bringing together people, process, technology and intelligent data to help bring an innovative lens to the challenges posed by friction.
Chief Innovation Officer, Care Bridge International