The need for speed

The insurance industry is not known for its speed and agility. Quite the opposite, it is most often characterized as slow, methodical and cautious.

Fortunately, over the last few years, insurance companies have been taking measures to improve and enhance engagement with their customers, agents and distributors. These efforts have been fueled by the Insurtech market disruption and consumer demographic growth toward Gen Xers and millennials who expect flexible, digital engagement with their insurance provider or agent beyond the initial buying experience and billing.

Those organizations most active in this respect have led the way in terms of transformative innovation, but most insurers have opted to spend their time on other things, hoping they can be “fast followers.”

COVID-19 has shifted the need for transformation into high gear. As stringent physical distancing policies have been adopted at state and local levels, insurance businesses have closed offices, shifted employees into work-from-home programs, and are stretching to conduct all of their business through digital and/or virtual channels.

Those organizations hoping to be “fast followers” are going to be faced with having to make more urgent decisions about how to transform their businesses and avoid being left behind.

Just a moment, first things first…

Focusing on a wholly new digital operating model can sometimes distract from core concerns.

The most important first step in improving customer engagement during the crisis is to reach out, not in marketing or overt attempts to gain a competitive edge, but to offer genuine support. Supporting policyholders, listening to their needs and challenges, and maintaining trust is the basis for growth.  Don’t wait until you have the perfect medium.  Some solutions are better than others (and most suitable for future use), but any will do: email, phone, in-app messaging, text.

Beyond the obvious benefit to policyholders, this open dialogue and collaboration, regardless of the suitability of the method for the long-term, will help educate the organization and inform engagement and experience design around which future digital models will be constructed.

Digitally enabled engagement models

In order to survive and continue to thrive post-crisis, carriers will need to transition their sales and customer engagement processes to an online and contactless sale through digital engagement models at every step of the customer journey.

“Digital engagement model” does not necessarily mean “direct-to-consumer.” Regardless of whether carriers wield a distributor-supported channel, a direct-to-consumer channel, or a hybrid of the two, initial opportunities to leverage digital models exist.

For example, in the direct-to-consumer model many carriers are successful in leveraging digital front-ends to remote call centers employed to close the sale. While there is a still a human-aided sale, the process leverages digital and simplified straight-through capabilities. In distributor-supported channels, insurers that are doing remarkably well during the crisis by putting digitally-assisted sales programs and processes in place to empower and enable distributors to sell high-end policies to consumers.

Ongoing, the digital engagement model coming out of the pandemic requires a fully developed digital customer engagement strategy. It will be built on highly interactive platforms that leverage and facilitate collaboration in multiple directions – between the distributors, the client and the insurance company.  These platforms will enable carriers to engage and communicate directly with their policyholders to provide guidance throughout major life events and changes, and jointly deal with the fear and uncertainty of difficult situations like COVID-19.

Digital beyond customer engagement

While most applications of digital technology are generally aimed at customer engagement, fully digitizing the operating model will involve utilizing digital processing in everything from underwriting to claims. Those that were innovative insurers prior to the crisis will certainly have already moved in this direction or will be doing so in the near-term.

Conclusion

There will be very clear winners and losers when the pandemic is over. The winners will be the insurers that had or quickly established a digital engagement platform, and have the ability to underwrite high-value policies without requiring a paramedical exam. Such companies are actively selling policies during the pandemic as consumer fear mounts. The insurers that lack digital capabilities will encounter challenges to underwrite and distribute their products in a remote environment.

For more information on this topic or to learn how Baker Tilly specialists can help, contact our team.

Todd D. Wilkerson
Director
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