2021 year in review: UX trends in digital insurance
As we enter the new year, it's natural to look back at the progress made over the last twelve months. There have been several breakthroughs in insurance UX that will define our digital future. What are some of those key developments? Let's explore them below!
In this article, we will discuss:
- The importance of UX/UI for insurers as they move into the digital space
- The state of digital insurance in 2021
- The rise of new technologies and their impact on the industry
- The future of UX in insurance, and what we can expect in 2023 and beyond
The Importance of UX/UI for Insurers as They Move Into the Digital Space
One of the most critical aspects that insurers focus on as they move into the digital space is user experience (UX).
With new technologies introduced in the insurance industry, insurers must have a solid digital presence or risk losing customers. In fact, according to research from Deloitte:
high digital maturity companies were about three times more likely than lower-maturity companies to report annual net revenue growth and net profit margins significantly above their industry average.
And a unified digital experience is one of the major drivers towards digital maturity in organizations.
The benefits of reaching digital maturity for insurers
UX is the process of enhancing customer satisfaction and loyalty by improving the usability, accessibility, and pleasure provided by the interaction between a customer and an insurer's digital products.
Good UX/UI can bring about many advantages for insurers. Some benefits include:
- Increased customer loyalty
- Improved understanding of the policy information by customers
- More efficient claims processing
- Greater brand awareness and competitiveness
- Increased revenues
In other words, insurers are beginning to understand that to stay competitive in this day and age, they need to create an excellent user experience for their customers.
The state of digital insurance
While the importance of UX is becoming more apparent, it's not always easy for insurers to achieve a good user experience. Many insurance companies still face setbacks as they look to improve UX in their digital products and services.
According to the J.D. Power 2021 U.S. Insurance Digital Experience Study, overall customer satisfaction with insurers' digital offerings did not improve at all this year, despite increasing investments and attempts for industry-wide improvements.
The bar for customer expectations about digital continues to rise. While many insurers are doing well on digital fundamentals, only a few are successfully finding innovative ways to grow and engage their customers.
The real issue for insurers is to push the limits of digital innovation. Although many insurers now allow customers to do simple tasks online or via mobile, very few provide a significantly enhanced, highly personalized overall experience via digital.
Customer satisfaction scores decline as activities become more complicated across all account service and purchasing interactions reviewed in the study. Insurers struggle to delight their customers on more complex tasks, such as requesting a quote, researching policy information, adding a driver/vehicle, and viewing policy-related information.
User experience becomes crucial for insurance shoppers seeking quotes and existing customers conducting typical policy-servicing activities. Customers' expectations for change are increasing rapidly, and insurers must go beyond simply digitizing basic customer activities.
Catching up to the digital insurance leaders
Digital insurance leaders are those insurers excelling in customer experience and have been able to translate their success into tangible business results.
According to the latest UX ranking, GEICO has topped the service sector for a fourth consecutive year with an 879 score. Progressive (868) comes in second. In a tie, Farmers (867) and The Hartford (867) rank third.
With a score of 821, Mercury ranks highest in the shopping segment. Auto-Owners Insurance (816) comes in second, and State Farm (807) places third.
The study found that the best digital insurance experiences come from companies with a clear focus on providing an exceptional customer journey rather than simply digitizing basic activities.
These leaders are using digital technologies to enhance interactions across channels, driving more profound relationships and higher levels of engagement with their customers.
Moreover, digital insurance leaders tend to have a strong understanding of the factors that drive customer satisfaction and loyalty across all account service interactions, especially those involving more difficult or complex activities such as filing an auto claim.
Moreover, digital insurance leaders also benefit from having a strong focus on building agile organizations that can adapt and respond to customer feedback in real-time.
Why is it so difficult to catch up
While some insurers have begun investing more heavily in their digital capabilities through acquisitions or new product launches, it's clear that most are still behind the curve. Insurers need to catch up quickly by focusing on these elements to delight their customers and move up in the rankings.
Despite understanding that UX/UI is essential, insurers have difficulty catching up. There are multiple reasons for it.
Complex proprietary and legacy systems
One of the main challenges is that many insurers are still using legacy systems, making it challenging to create a seamless and user-friendly experience for customers as these old technologies are difficult to reconcile with the latest front-end technologies.
Siloed data leads to lack of personalization
Additionally, customer data is often siloed within different parts of the company (e.g., underwriting, billing, marketing), making it difficult to get a holistic view of the customer and thus provide an improved, personalized experience. As a result, many companies are still using the "one size fits all" mentality, which does not work in the digital age.
Low-quality user experience with little to no focus on customer needs
Digital insurance leaders are always looking to improve their UX/UI and customer experience. They know that the market is constantly changing, and they must continue investing to stay ahead of competitors. It's a never-ending race for many insurers who struggle with catching up because it takes so much time and resources that digital laggard companies simply do not have.
Less digitally mature organizations are desperately trying to catch up, but it's not an easy task.
As a result, those firms spend most resources trying to develop new products instead of improving UX/UI, falling further behind the digital leaders with design that is often not user-friendly and difficult to navigate, and products are not always visually appealing, which can turn customers off.
Amplified service issues
Insurance companies with pre-existing problems in the customer service amplify those issues in a digital realm, where users experience crashes, errors, and other problems, increasing friction instead of removing it.
Lack of resources
Lack of resources such as qualified IT personnel and the need to allocate these scarce resources in other areas of the business.
The Future of UX in Insurance, and What We Can Expect in 2022
Insurers have been slow to improve UX/UI and customer experience due to the reasons mentioned above and a lack of resources needed to do so. However, with technology constantly changing, it will not be possible to succeed in the market unless they find ways to catch up to the digital leaders quickly.
At this point, it is difficult to predict which insurers will catch up quickly and rise in the rankings by 2023. However, it is evident that digital innovation will play a key role for all players over the next five years as customers continue to demand more personalized experiences across channels.
In 2022, we expect digital insurers to focus on UX/UI improvements to keep up with the competition. Looking ahead, we can expect to see even more insurers putting a greater emphasis on UX as digital products continue to become more popular.
In fact, according to one survey, 70% of insurers state that they're planning to either increase or maintain their current level of investment in regards to improving the user experience for all digital interactions over the next three years.
As we look ahead into the future, insurers need to think about how they can continue improving their user experience. More specifically, we can expect many insurance companies will be focusing more on:
- Developing digital journeys that provide customers with information and services for complex interactions through various touchpoints (including mobile)
- Expanding the use of chatbots and self-service tools to make it easier for customers to interact with their insurer, whether they're looking for an explanation of benefits or trying to receive assistance in filing a claim
- Utilizing new technologies such as AI and the IoT to improve customer service, fraud detection, and other key areas
- Improving the overall design of their digital products to make them more user-friendly and visually appealing
- Offering more personalized experiences for customers based on their individual needs and preferences
- Allowing customers to interact with their insurer in a variety of ways, whether it's through video chat or other means
- Providing more proactive support for customers who need assistance before they experience an issue by utilizing Big Data and Machine Learning to identify customers in need of assistance
- Using predictive analytics and data insights to better understand customer needs and pain points over time in order to embrace human centric approach
The role of no-code in the digital insurance age
It's clear that insurers are beginning to understand the importance of UX, and we can only expect this trend to continue as we move further into the 21st century.
Insurers are beginning to realize that to stay competitive in the digital age, they need to focus on creating an excellent user experience for their customers. As digital products continue to evolve, insurers are starting to see the value in using no-code platforms as a way to improve their user experience.
What is no-code development?
What is no-code? Simply put, it's a platform that allows users without coding skills to create and manage digital products without writing any code. This can be done through a variety of methods, including drag-and-drop tools, visual builders, and WYSIWYG editors.
The benefits of using a no-code platform for improving UX in insurance are clear:
- Less digitally mature organizations can catch up to digital leaders quickly and make rapid improvements to their UX
- Users create digital products without heavy IT involvement, allowing insurance organizations to achieve more with fewer resources
- Non-technical employees (such as business people and marketers) can participate in the product development process
- Speed up the time it takes to create a digital product, often by weeks or even months, allowing organizations to create a variety of digital products, quickly
- Create products that are more user-friendly and visually appealing since the best UX/UI practices are already built into the no-code platform
Insurers are beginning to realize the value of using no-code platforms to improve their user experience. They'll be able to produce digital goods more quickly and with less expense than conventional processes, as well as take advantage of UX expertise to create aesthetically superior, more personalized, and easier-to-use digital products.