Top reasons to transform digital customer journey in insurance
Historically, insurance providers heavily relied on offline touchpoints and in-person customer interactions as customer acquisition and retention tools. Insurance suppliers engaged in a race to the bottom to entice customers, competing on price to bring people in. But this isn't a sustainable approach—insurers can't sustain profitability by eroding profit margins.
The widespread digital disruption, shifting customer preferences, and the surging demand for remote servicing brought by the ongoing pandemic resulted in a shift in focus. Insurers are now focusing on two things: the quality of the experience and creating a connection in an online environment.
As a result, the digital customer journey in insurance has notably evolved over the last few years. According to research from Newsweek Vantage, "a differentiated customer service experience" has become the leading competitive differentiator within the industry.
According to a Novarica report, 100% of life and annuity carriers say digital distribution is their top budget allocation priority for 2021. With the pandemic still raging in 2021, opportunities for in-person customer/agent conversations remain limited. Digital platforms are proving to be must-have solutions to meet customer demands for self-service.
So what does a customer journey in insurance look like, and how can organizations within this industry leverage digital feedback to optimize various stages within the journey?
Stages of the Customer Journey in Insurance
Of course, every journey is unique, and the digital customer experience in insurance is complex. Depending on the journey, there will be multiple Moments of Truth (MoTs) and critical touchpoints that vary from organization to organization.
However, despite the wide variation in digital journeys, there are some common elements across the board. Many insurers also share many of the same online processes (i.e., online forms, eSignatures, FAQs, Customer portals, Digital FNOL.) If we were to breakdown a typical customer journey in the insurance industry, it might look something like this:
At every stage, the importance of frictionless, omnichannel experience cannot be overstated.
The omnichannel digital distribution boosts operational efficiency, improves agent productivity, and empowers insurers to reimagine the purchase journey, focusing on convenience, seamless online shopping, and quick processing. Efficient digital interactions can
- Reduce customer acquisition costs by up to 50%
- Generate 5 to 10% of new premiums
- Slash customer churn by up to 30%
The importance of digital experience for customer acquisition
Customer expectations have shifted towards a channel-agnostic, consistent experience that supports real-time, self-service workflows but balance it with comprehensive support at their fingertips.
As a result, more than 90% of new life insurance sales are expected to have a digital interaction by 2020, providing an added impetus for carriers to offer experience-led digital channels both for direct-to-customer and agency-driven sales.
Insurers' digital acquisition initiatives can support policy seekers' experience-led shopping options while simultaneously boosting a firm's market share and profitability.
A digital customer acquisition strategy is so efficient that it can be very targeted when analytics are applied to model prospects into micro-segments based on various criteria such as risk tolerance, demographics, location, and projected lifetime value.
Keeping the experience streamlined, whereby prospects can complete the initial customer onboarding in minutes without leaving the digital journey, contributes to higher completion rates. By enabling eSignature and supportive documentation uploads from within the journey, insurers can significantly improve customer acquisition.
Within the expanding digital environment, agents still remain critical. Agents require digital tools and predictive, real-time analytics to boost sales interactions. The broker/agent channel also benefits from being empowered with digital tools to seamlessly connect with policyholders and turn customer data and actionable insights into sales.
Importance of CX for customer retention
Only 29 percent of surveyed customers are satisfied with their current insurance provider. And with only 16 percent willing to buy more products from their providers. Failure to deliver on customer expectations results in high customer churn and bottoming up customer lifetime value.
Digital capabilities empower a targeted approach to customer retention by empowering insurers to offer contextual products in sync with customers' life events. From marriage to a home purchase to childbirth, or retirement, targeting provides what is relevant to that particular customer at a specific point in time significantly improves retention rates.
Transforming the experiences of both customers and agents with the power of data-driven multiple engagement channels opens up new avenues for product recommendations and upsell opportunities.
Importance of CX for lowering operating costs
Inefficient manual processes that support core interactions such as customer onboarding claims processing or policy sales have a hefty price tag. Ensuring that the data is digital at the point of entry eliminates data processing and data entry costs lowering operating costs significantly.
How to transform now: no-code and EasySend
An acquisition process that supports efficient digital interaction on every channel: direct-to-consumer, agents, and other engagement opportunities require insurers to digitize their processes fully. From digital onboarding to claims processing, there is no room for inefficient, manual interactions.
Carriers need low-cost, robust, and scalable digital transformation solutions. But this has proven to be challenging to implement in practice.
While 90% of insurers had implemented some digital acquisition capabilities, only 30% could scale it to stay ahead of the curve. Industrywide digitally mature capabilities are still few and far between. Only a few Insurers are offering a frictionless digital quote-to-buy experience for innovative products leveraging rich external data.
The end-to-end transformation of digital experience is a monumental undertaking that requires significant budgets and often takes a long time. This is reflected in the fact that larger insurers who can allocate significant budget and manpower to the task are 18% more likely to have developed digitally mature capabilities than average midsize insurers, according to the July 2020 Novarica 100 (N100) Framework. And when it comes to leveraging data across marketing, distribution, and underwriting, the industry is even less mature.
Efficient transformation of digital customer experience requires a modern digital platform that empowers insurers to swiftly innovate and launch new products quickly and efficiently.
EasySend is a no-code platform that empowers insurers to craft and launch digital journeys quickly and efficiently at every stage of the journey. From a frictionless application process that enables customers to complete the application without leaving the app, EasySend brings a consistent, frictionless experience without lengthy development projects or skyrocketing budgets.