How to centre CX in insurance digital transformation (and what happens if you don’t)

13 Sep, 2022

Forty-two percent of customers don’t fully trust their insurer, according to an IBM study. This blunt statistic is a kick in the gut, though probably not a complete surprise to most insurers. It’s a legacy of the impersonal, choiceless insurance markets of the past that are yet to reach their modern potential. The industry is yet to shake past impressions of slow processes, long hold times and complex policies. 

The same IBM study shows that 60% of insurance executives agree that their organisation is lacking customer experience (CX) strategy. Meanwhile, a Deloitte survey states that 95% of insurance executives are (sparked by the pandemic and its associated global changes) speeding up the timelines of digital transformation – replacing legacy tech with cloud software and enabling new ways of interacting with customers and distributors. 

This rush to pull off major transformational work without prioritising CX is a concerning trend – continue reading to see why. 

Why do Australian insurers need to prioritise customer experience during digitalisation?

By nature of the service, no customer ever wants to have to use their insurance. It means there’s been an accident or incident – stressful at best, truly traumatic at worst – and there is already tension woven into the interaction. What this means for insurers is that you’re already in a difficult starting position, as far as providing a great customer experience goes. Every frustrating or slow experience feels amplified, while a good experience is rarely celebrated. 

Gartner research shows insurance interactions are almost as likely to produce a negative outcome as a positive one (42% positive outcome, 41% negative outcome). So why should Australian insurers make the effort in what feels like an unwinnable game? Aside from tipping the scale in favour away from the brand-damaging painful experiences, centring the customers’ experience in a full digital transformation has many flow-on effects into operational efficiencies. 

Many insurance organisations have begun digitisation work that improves processes to some degree – digitised applications or claims forms, for example – that are a step in the right direction, but still require manual processing from your employees. This work is an early step in a modernisation journey, but skims the surface of what digital transformation can achieve. 

Giving your employees the tools to provide a great experience to customers – to do their job well! – saves time and resources, and keeps job satisfaction and retention levels high. Automating processes increases scalability and opens up valuable staff time to focus on higher value interactions.

Three ways to make customer experience the centre of insurance digital transformation

1. Implement omnichannel capability

Linking each of your customers’ touchpoints is a high impact way of improving their overall experience with your brand. Customers have the expectation to be able to self-serve as much as possible, connecting with your customer service team at the point they choose (or at the point their problem becomes too complex). 

Interconnecting all of the ways they can interact with your services – phone call, online form, app, chatbot, etc – saves both frustration and time for customers and employees alike. Omnichannel capability relieves customers from having to re-enter their information whether switching between devices or connecting with a representative.

2. Make the most of your available data

Data is one of the most valuable assets in any organisation – when it’s able to be used to its full potential. Data that sits in legacy systems and departmental silos is a wasted opportunity. 

In the past, insurers relied on customer surveys and market research to gather data points to design products that suited customer needs. Now, they can analyse text interactions to identify customer pain points and tailor offerings, at both a cohort and individual level.

 3. Let humans manage human tasks – and AI handle the rest

The current state of the Australian insurance industry, as a whole, still relies on people manually assessing and processing tasks, and personally working through customer queries. These processes are a perfect candidate for automation; they can be completed faster and to a higher standard (no margin for human error) – not to mention, processed 24 hours a day, 365 days a year. 

A well designed AI customer service capability – a chatbot – is a gamechanger for an organisation with many similar customer queries, like insurance. Even used as a triage service before moving into personalised advice, it is a highly valuable asset. In its first year (2018), nib’s chatbot saved 535 hours of consultant handling time. Chatbot technology (and customers’ comfort and trust in the service) has of course continued to progress rapidly in the intervening years, producing accurate, empathetic and speedy support to customers with high satisfaction rates. 

Saving voice channels for showing understanding and genuine empathy to customers – and for the most complex or high value interactions – is the direction of future insurance in Australia. (Just remember to set your customer service representatives up for success by providing omnichannel background information before connecting them with the customer!)

Worst case scenario: what will happen to insurers who don’t take action?

The risk of delaying digital transformation work is a combination of lost opportunity and poor brand perception, and a further accrual of technical debt on legacy platforms. Increasingly, insurers cannot depend on customer loyalty or brand reputation. Customers are more discerning than ever and willing to shop around for a provider that suits their needs. 

Contact 9Yards today to talk to our solution architects about how digital transformation could empower your customers and employees to have a better insurance experience.