Articles - Solving the Digital Dilemma

The insurance industry is at an important cross-roads and needs to change its customer communications strategy towards a model that is more attuned to today’s consumer behaviour and preferences. Specifically, a survey by London Calling found the insurance industry to be particularly conservative in its forays into digital.

 By Giuliano Altamura, Financial Services Business Unit Manager, Fincons Group
  A more efficient multi-channel model of interacting with consumers and brokers is required as well as an increasing focus on digital touchpoints all of which can deliver huge cost efficiency benefits as well as increase loyalty.

 On the one hand, having a clearer, more organic view of customer behaviour and interactions with the insurer can help brokers make more relevant and informed suggestions, on the other this can increase sales leveraging cross-sell and up-sell opportunities thanks to a holistic view of the customer. At the other end of the spectrum, direct customers are offered more relevant reminders for renewals or add-ons to their policies.

 Given the increasing importance of purchasing online with UK online spending exceeding £130bn in 2016, it’s evident that consumers are taking their wallet on their web searches. It is therefore, important that insurers learn to leverage this channel and offer user friendly and intelligent interfaces to both brokers and direct customers.

 Mobile sales are also becoming increasingly popular across sectors with mobile app purchases up 47% YoY since 2015 and the insurance sector needs to remain ahead of the curve on this channel by monitoring changing customer behaviours and providing appropriate tools. Insurers should therefore be providing apps and mobile optimised sites which consumers have come to expect from all providers of goods and services.

 Social media is another channel that is becoming increasingly important and there are solutions that allow the conversation to start over social media, so for example via Facebook Messenger, and then be transferred to the website where the client can access more information and eventually be enabled to buy their cover.

 The market is slowly moving to a model that requires an up-to-the-minute overview of the customer in order to move from the provision of single cover for a specific item or activity such as travel, home or car insurance and renewing it on a yearly basis, to offering an overall insurance service tailored to consumers’ needs across a range of types of cover (home, motorcycle ownership, classic car, business) for a monthly fee.

 Unfortunately, customer information in back-end systems, which are usually legacy systems, tends to be ‘siloed’ in different formats for the use of single departments such as P&C, L&H, Claims and Finance. It is, however, possible for experienced system integrators to collect data from these different systems and form a single repository for a complete and organic single customer view.

 Trying to integrate back-end systems into one is a very expensive and time-consuming process, but creating new modern front-ends and integrating them with the different back-ends allows you to collect and pool all types of structured and unstructured data from various systems with greater ease. Big Data can further help in this, by enabling the creation of a unique data repository, regardless of the data source, whether it is internal or external, structured or unstructured data. Add to this the contribution of Artificial Intelligence and companies will be enabled to further improve strategy and decision making across the business in an over-arching Business Intelligence framework.

 Thus, in the future, AI is expected to provide way more than simple chatbot automation, understanding and mimicking natural speech, and to become a way of providing systems with suggestions that can help identify cross-selling or up-selling opportunities and achieving a whole new degree of effectiveness. In a Big Data-empowered world, AI may for example be able to provide predictive analysis and help decision makers with suggestions as to which segments of clients to target for a more profitable and lower risk investment or to automatically respond with an action to specific trigger behaviour by consumers.

 Achieving digital innovation can be time consuming and relies on staff having the right set of technological skills, the ability to deliver and on there being enough capacity to carry out the task. Managing this type of project internally is difficult for most underwriters whose staff is already fully employed in carrying out their day-to-day tasks or who simply don’t have the required technical expertise required. It is therefore highly cost effective to engage with a third-party consultant to help provide a roadmap of the process of improving user experience via greater digitalisation and to help implement or entirely outsource the process.

 In the highly competitive insurance market, underwriters cannot afford to lose the loyalty of direct customers or of brokers because they are not providing an up-to-date and contemporary level of digitalisation. As more and more insurers understand the importance of bringing their systems and processes up to speed with the multichannel customer and embrace new digitalisation-enabled business models, those failing to tackle the issue risk falling behind.

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