By Jainendra Kumar, VP – Digital Transformation Unit at Xceedance.
Starbucks, the ubiquitous coffee retailer, did not mince words when it proclaimed that the company was not about coffee but about providing a positive experience for customers sitting in a Starbucks outlet. To Starbucks, coffee is simply part of the overall experience.
We are living in an era where a focus on customer experience is becoming a focal point of many products and services. The product or service itself is rarely the destination or focal point, rather it is the experience and the entire process many industries focus on to ensure consumers have an enjoyable (and memorable) experience.
Many insurers are now also focusing on improved customer experience. Of course, insurance is not coffee, and securing an insurance policy or dealing with an insurance carrier when something goes wrong will never be a sought-after experience like visiting a Starbucks. Getting insurance cover is an admission that unfortunate things can happen in life. However, that is no excuse for the entire industry not to make the process more palatable to customers.
For a long time, the insurance sector has focused just on its products without much thought to whether the end user could grasp the true benefits of insurance coverage. The entire process has been geared to the convenience of the insurer rather than the insured, from the wording of policies and the scope of coverage to what can potentially result in claims rejections. Insurtechs are now stepping in and changing the rules of the game – relying on technology, digitisation, data analytics, and artificial intelligence to bring the right products to the right consumers and prioritising the customer experience. Let’s look at some ways this focus is changing the industry by looking at a specific example – embedded insurance.
Convenience: Buying insurance coverage as part of another product or service is easier because the customer does not have to seek the coverage out separately. The opportunity of securing life or health cover with a credit card exemplifies this model – the cover is there, the card issuer bills the customer for the premium directly, and the entire insurance transaction becomes part of the regular monthly payment cycle. It doesn’t take up much mind space for the customer but does provide important coverage in case something goes wrong.
Simplicity: An insurance policy is not written for the end user to easily read or understand it. The small text, heavy legal verbiage, and technical coverage exclusions make it difficult for consumers to fully comprehend the scope of the coverage they are buying, which can lead to confusion and dissatisfaction. Several insurtechs are de-jargonising policy terms and conditions to make them simple and easy for the customer to read and understand. Some companies are also working to simplify claims forms.
Speed: Insurance, by its very nature, is a product that responds to the occurrence of a negative event. At a time when policyholders may be preoccupied physically or emotionally the last thing they need is a slow, cumbersome process to work through. Whether it is streamlining the onboarding stage, getting policy documents quicker, renewing coverage effortlessly, making changes to policies with a click, or processing claims faster, insurtechs are working to improve the speed of insurance functions to improve not only efficiency but also the customer experience.
Transparency: Typically, insurance policies do not easily highlight the coverage they provide, the extent of that coverage, and how or why claims are typically rejected. Insurtechs are addressing those issues by bringing increased transparency in terms of the coverage specifics and pricing. There are platforms available that give an instant comparison of prices across different insurers for the same coverage, putting more information and knowledge into the hands of consumers to make better choices.
The evolving nature of insurance must be understood because, within the BFSI sector, insurance is still largely in a nascent stage of digitisation. While banking, payments, and other financial services have embraced digital modes wholeheartedly, the insurance sector is still lagging. To reverse this trend and enhance customer experience insurance firms are beginning to adopt new-age technologies like chat bots, customer relationship management systems, mobile apps, adaptive business process model engines, robotic process automation solutions, policy administration systems, submission clearance automation tools, AI-enabled data extraction, data reconciliation, rating engines, CAT modelling, personalization engines, and more.
With the help of innovative insurtechs to break established models and push the boundaries of innovation, the industry is on the precipice of a true digital revolution.