“Most enterprises are experts at creating digital transactions but novices when it comes to creating digital businesses.” Mark P McDonald & Andy Rowsell-Jones
– Gartner July 2012
For many insurance businesses it has been essential to add digital channels to the customer journey just to stay in the competition. Many have added digital quote capabilities, digital capabilities to buy products and digital marketing capabilities for promotion. Most insurance companies can now interact with customers across web, phone and ‘old school’ bricks and mortar channels.
The volumes of digital transactions that are coming through the front end, and the amount of data that needs to be collated, combined, analysed and interpreted, continues to grow. As the variety of devices and channels that customers now use continues to expand, sourcing data from these different sources becomes an increasing challenge. In addition, customer expectations mean this needs to be done pretty much immediately to support customer needs for instant responses.
Recent Deloitte research illustrates that multi-device ownership is well embedded and that multi-tasking between devices is rife. The research indicates that online research and reviews were influential in decision making and increasingly social media is being used by consumers to support buying decisions. Therefore insurers need to source and analyse this information to understand customer expectations and buying behaviour.
Insurance organisations need to source data that enables analysis of customer behaviour, contrasting with the traditional or needs based information that has historically been used. This behavioural information can then be used to develop propositions that fit with the consumer’s lifestyle and preferred behaviours.
Insurance businesses will need to invest in mobile and interactive technologies for multimedia content creation and product distribution across multiple digital platforms. PWC research suggests that the role of the intermediary sales channel will reduce and customers will demand a direct relationship using their own online and offline trusted network to guide their choices.
Globally by 2014 the number of mobile internet users is expected to overtake desktop internet users. In addition to this the number of internet connected devices is expected to reach 50 billion by 2020 which will have a significant impact on the availability of real-time information. Insurance business will be able to exploit this growth in information to automate intelligent decision making and drive better pricing, underwriting and fraud decisions for competitive advantage. By 2020 PWC predicts that the use of unstructured data (from social media, mobile devices, video and audio) will complement the existing structured data (within traditional insurance business processes) to enable insurers to make strategic real-time decisions to drive better customer journeys.
Becoming digital for most companies will mean an overlap with existing processes and strategies that are enabled by IT but also require a wholesale change in the culture of the business and the way the businesses operates. Approaching digitisation as a journey rather than a radical business transformation will enable Insurance businesses to retain the strengths gained from years of operating experience whilst moving the business to an integrated end to end digital model. The important factor will be establishing which elements of the business process will drive most value in the shortest timescale. To establish which elements to focus on it is worth considering the digital customer journey with regard to these key market drivers:
- Enhanced digital user experiences
Increasing use of mobile devices will lead to customers expecting high levels of customer service anytime, everywhere. Insurers need to consider the value of offering mobile friendly customer service applications for self service.
- Constant social connection
By 2015 Gartner predicts that 75% of consumers will tell friends about good or bad experiences using social media. Insurance businesses must consider adding social channels to their customer service initiatives both monitoring positive and negative sentiment and being able to respond via the same channel that customers are choosing to use.
- Big data - ever growing volumes of data
The ever expanding volumes of customer and market data open up huge opportunities for insurers to analyse and apply greater intelligence to decisions across the business. From customer acquisition, retention, fraud prevention/reduction etc, the automation of decision making to drive business growth and improved customer relationships offers opportunities for new product development and market differentiation.
- Speed, choice, privacy and security
Regulation and compliance needs around data privacy, security, freedom of choice and fairness will continue to underpin the decisions and processes within insurance businesses and must be at the forefront of any change in process or business model.
The key to digital success in insurance is to map out what you want the end to end digital customer journey to look like. Then review this against the existing platforms in the business and identify how they need to evolve to support being digital. Developing a flexible outer layer for faster technology adoption that utilises the value of the existing core systems will help your business to achieve the goal of delivering digital customer service excellence without having to change everything at one time. This approach allows the business to develop the quick wins but the real value gained is to use this outer layer to incrementally update the core technology systems over time. By doing this the full flexibility and capabilities that Insurance businesses need to stay ahead of the competition in a fast changing world are achieved.
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