The Road Ahead: 5 Practical Ways For Insurers To Achieve ROI Success
Recently I met Nick, my business acquaintance, at his office for our regular catch-up meeting. Not too long into our conversation, I noticed that Nick was not his usual self and looked worried. I could not stop asking him if all was well and if I could help him with anything. He shared that he has been diagnosed with 80 percent blockage in one of his arteries and that he has to undergo surgery to clear the blockage. With no hesitation, I consoled him as he looked tense. He assured me that he was fine and claimed that his situation could have been more stressful if not for the claims service app which his insurer has provided. He spoke with delights on how the mobile insurance app was planned out so well that he did not have to worry about his claims. He elaborated on his claims experience of how he appreciated that he did not need to do the chore of paperwork and how quickly he submitted his claims through the mobile app. He could check the status of his claim at any time, and information was also available timely to serve his inquiries, which gave him some peace of mind.
I was glad to hear this, and this incident led me to think of the significant impact of customer experience. Providing a positive customer experience is essential for keeping customers loyal, happy, and satisfied. In addition, customer experience is an important differentiator to set winners from runners up in the competition. In my opinion, the quality of the customer experience is dependent on how insurers perform in each of these five areas.
No one-size-fits-all approach to customer needs
Each customer has different needs and expectations based on their personalities, environments, and circumstances. As a result, there is no one-size-fits-all approach to meet the needs of all customers. However, the insurance companies that constantly research and examine the changing demands of their customers and act timely to meet these demands will earn the customer’s satisfaction and loyalty. Furthermore, a combination of advanced technologies and methodologies could help insurers collect, utilize and translate complex data into useful information to develop practical, customer-centric product offerings and deliver seamless customer experiences.
The insurance business has seen a drastic change since last year as the Covid-19 pandemic disrupted the traditional way of business operations. Face-to-face meetings are restricted and replaced by video calls, so agents can no longer freely personally attend to each of their clients’ concerns. This change in the insurance landscape has demanded that insurance companies shift to digital apps and technology tools to make offerings more accessible to their clients. Furthermore, customers are evolving with the digital age. They are becoming more digitally savvy and discerning in validating choices, so insurers must remain resilient to offer seamless service to customers who value convenient, fast, personalized service.
In one example, a Singapore domestic insurer, NTUC Income, leaped onto the digital transformation bandwagon four years ago and has embraced the ‘hyper-personalization approach in using technology to segment customer needs based on data and develop outreach strategies according to the groups. The insurer believes that the way to go forward is to provide customers the right solutions that meet their specific needs, through the right channel and at the right time.
Keeping customers happy brings business success
Customers today are empowered with the knowledge and use of technology to expect the same level of service from their insurance company that they receive from providers in other service industries, such as retail and mobile phone providers. With the rise of digitalization and the widespread use of social media by millennials, inevitably, customers can now set higher parameters to define customer satisfaction. According to a survey conducted by Accenture of 8,000 insurance customers in 14 countries, although 86 percent of respondents are satisfied with the way their claims are processed, 41 percent said they might shift to other competitors in the next twelve months. On the social media front, 29 percent of respondents said they would post a positive claim experience, 30 percent of people would share their negative experience. Together these results reinforce that customers have a powerful impact on a company’s business and image.
To win the favor of customers, insurance companies must continue to accelerate their digital transformation products to meet customer expectations to stay competitive and relevant. Since claims and benefits are essential service activities in the insurance industry, effective claims and benefits management is necessary to create positive word-of-mouth, achieve customer loyalty and increase wallet share. However, the complexity of managing a claims environment with multiple systems and manual handovers leads to errors and delays that can adversely affect the customer experience. A comprehensive and trustworthy integration platform will allow insurance companies to provide integrated services, enabling fast and accurate claims processing while providing customers with timely and relevant information.
For instance, Manulife saw the rise in health insurance protection demand in Vietnam last year and quickly implemented digital innovations projects such as e-commerce and eClaims services to meet the market demands. Now, the Vietnamese market has since been the fastest growing revenue market for Manulife.
In Singapore, in March, the General Insurance Association Singapore (GIA Singapore), Life Insurance Association Singapore (LIA Singapore), and Integrated Health Information Systems (IHiS) announced their collaboration in developing an end-to-end health insurance claims platform that aims to speed up insurance claims and help to reduce duplicate claims, manual errors, and processing time. This initiative is supported by the Ministry of Health (MOH) and the Monetary Authority of Singapore (MAS). The ultimate objective is to pave the path for the insurance sector to adopt digitalization and offer integrated health services nationwide.
User adapting the system is critical for the ROI
When digital transformation initiatives are planned well with a strategy and a set of practicalities in mind, they are on the right track to generate the best return on digital investments and business growth. According to Accenture’s survey, 82 percent of insurance executives have developed or are developing a strategy for digital transformation – this underscores the importance of having a strategic roadmap. So, what and where is the best place to invest and maximize your investment return? The way to achieve this is to combine strategy with practicality.
There are practical ways insurers can look into strategic investment in embracing future-proof technology to accelerate digital investment return. For example, the insurer could first select the most appropriate use cases to optimize customer engagement and strengthen retention. Additionally, also transforming the existing system to increase competencies to enhance business values and ROI. Insurers who can understand the customer’s journey well can deploy the right technologies and re-calibrate processes to strengthen their business capacity to deliver more value to customers and keeping them happy and engaged.
Think of creative ways of using the Digital Assets
Providers can also use technology to gain a digital return from increasing market share by offering various products.
In the case of microinsurance, which is highly specialized coverage to cover a specific need, it is suited to underserved populations or developing markets that cannot get affordable risk protection from where they are. However, it requires pay-per-use services, one-time services, and high servicing costs. As a result, most insurers are not interested in investing due to low sales volumes and low market penetration and high operating costs, and low profit margins.
However, the mindset that microinsurance is less profitable has changed, thanks to digital innovations and technologies. In recent years, new and transformative technologies are helping insurers to adopt creative methods to improve the traditional constraints: expand distribution at scale for the broader market, process claims quickly and transparently to reduce expenses and fraud; level up payment facilitation to serve low premium payments and claims to reduce high transaction cost.
For example, technology can help insurers make an innovation breakthrough in their business by moving past the traditional model where insurance buyers are required to pay for the whole period of insurance coverage; insurers can now offer dynamic insurance offers such as customers can now activate and deactivate their insurance cover at will . And they will be charged for the time their coverage is active, be it car, telephone, house, or even life.
More examples of creative product offerings include a Swedish micro insurer expanded its market to Cambodia targeting premium as low as $1 per month; and an Indian boutique micro insurer that offers “bite-sized” insurance policies for eyewear care, pet dogs, fitness, commuting, and backpacking, etc.
Cross-functional teams must keep the customer at the center of the product
The implications of digital transformation are extending into agility in operational excellence, customer experience, risk management, and products. As we know, the product must reflect the user and its environment. To develop a product that perfectly caters to the customers’ multifaceted needs does not rely on an individual department’s effort alone or depends on a one-time project alone.
To be more agile, insurers need to break down silos and coordinate cross-functional teams working in tandem on product development projects with an agreed-upon objective. Once the project is completed, this cross-functional team will continue improving and calibrating the customer experience to achieve organizational goals.
The practice of enterprise-wide agility is not new, and many technology companies and industry giants have used it, including banking and telecommunications. With insurers going digital to keep up with digitalization demands and to become competitive in the pandemic time, adopting agile strategies to handle rapid industry shifts is a wise decision to reap the benefits of digital transformation projects.
We are all in the same boat
Since the beginning of last year, we have experienced an unprecedented pandemic of Covid-19, and since then, we have been adapting along with the changes to stay sane. Similarly, businesses need to rise above disruptions and adopt creative approaches to maintain stability and profitability.
All of us are faced with an invisible disruptor in our lives that saps energy, spoils plan, triggers fears, and instills uncertainty. During times like this, we all need to be understood and maintain our peace. Consequently, companies that empathize with the customers’ needs and continue fostering and nurturing great customer experiences through innovation and agile transformation are on the road to winning the race.
At VERMEG, our approach is to help our customers put themselves in the shoes of end-users to learn from the first-hand experience and analyze their customers’ experience to meet the arising needs. To find out more, please contact firstname.lastname@example.org
|Vishwanath MEGANATHA, |
Regional Sales Director, Insurance, APAC & Middle East
Vishu has over two decades of experience in insurance management in Asia and the Middle East. He has a demonstrated history of working in IT services and insurance management. He has played a key role in helping insurers implement Digital Transformation projects and enterprise systems, including core systems and systems of engagement.
The future of insurance lies in giving control back to customers, Consumer News & Top Stories – The Straits Times
 Satisfaction with Insurance Claims Settlements not Enough to Keep Customers Loyal, According to Accenture’s Global Insurance Customer Survey | Accenture
 Pivoting to Digital: How the insurance sector is moving with tech | Insurance Asia
 Pilot platform to speed up insurance claims in Singapore calls for proposals, Banking & Finance – THE BUSINESS TIMES
 The Insurer’s Guide to Digital Value Investing | Accenture
 VERMEG – Top 10 Digital Transformation Company LR.pdf
 Swedish Micro insurer BIMA expands in Cambodia – Scandasia
 Bite-size insurance: Is it really worth it? (livemint.com)
 How insurance players can scale agile | McKinsey