Insurers are charged with treating customers fairly and driving up conversion rates. These goals are not incompatible and advances in technology offer ways to succeed with both agendas, says Stuart Hayman
It is now time for the protection industry to make more use of technology’s tools if we are to become more efficient and offer a better service to our customers.
How can organisations gain customer trust so that they are comfortable enough to divulge their personal data? The key is to be transparent in explaining why the information is being collected, what it will be used for and the benefit it will bring the customer while at the same time creating an engaging customer experience. Organisations need to demonstrate that the customer will benefit through closer collaboration by offering special deals or more targeted marketing and promotional offers. Customers will quickly lose confidence if their information is misused, intentionally or by accident.
Furthermore, this data-centric approach has significant appeal but it is not without its challenges. Firstly, there are the obvious technical questions – can we deploy the appropriate infrastructure, are our people skilled to use this information and what underlying technologies are needed to capture and then deliver the analysis? Typically, businesses focus time and resources around these critical infrastructure hurdles and build solid, reliable IT platforms. But to leap to a technology-led solution without first considering the wider customer engagement requirements would be to overlook one of the most fundamental pieces of the jigsaw – the end beneficiary.
If you can truly answer yes when asked: “Will this benefit my company?” and “will this benefit my customer?” – then jump on board, and make the most of the technology out there.
Outdated methods
Traditional pen and paper insurance application forms are fast becoming outdated. Driven by the customer, websites are richer than ever, offering friendly, more effective information and sophisticated levels of interaction. Customers can now work out affordability of protection without even filling in a form, by using sophisticated insurance calculators, while click-to-call and click-to-chat allows the customer direct access to help via the website at any point during the application process.
This transition has provided the customer with a faster more engaging and easily accessible way of buying a product, and this has quickly overtaken the more labour intensive paper trail, even replicating a more personal interaction.
Historically, paper applications had a high percentage of returns due to errors or omissions. Now, sophisticated validation software even ensures answers are appropriate, and reduces the rate of return. For example, word recognition software can identify if you spell the name of a disease incorrectly, and offer the correct spelling.
Smart application forms follow a sequence which is determined by the individual customer profile. This interactive method allows real-time calculation of the customer’s risk and eligibility, and means that a decision can be made and conveyed to the applicant immediately. Using the inherent flexibility of expert underwriting systems customers who are uninsurable for the proposed risk is being advised early in the application process saving them the time and inconvenience of waiting to complete the whole application to hear the same message.
Enhancing the customer journey
Electronically driven bespoke application questioning allows for the insurer to collect only that information ‘relevant’ to the risk being proposed meaning applicants are not being asked to answer irrelevant questions – enhancing the customer journey.
Customer feedback is invaluable for any company looking to improve the usability of services, products and processes and make the customer experience as effortless as possible. Talking to customers and finding out how they view your service and what they would change to make it better, can give you valuable information on how to structure and manage this valuable interaction.
Perhaps the simplest and most accurate method is through e-monitoring. This is where a customer’s online activity on a company’s website is monitored, giving the company information about where a customer enters a site, what they look at, where they hesitate or get stuck, and at what point they leave the site. The company can then analyse this data to find trends and patterns. By modifying even small elements of their customer-facing site, providers can assess their impact on the end user, perhaps by directing a sample group to a ‘mirror site’ leaving most customers unaffected.
Another simple but effective way to gather customer feedback is by using electronic feedback forms at the end of a process. This has become commonplace online but has only been adopted by a few companies in the insurance industry. Most people will happily respond to a request for feedback, but some are put off when this is an obligatory part of the process. As long as you offer an opt-out option, the customer can feel that their opinion is valuable, and might help to shape a business for a better customer experience in the future.
At Vertex, we use customer feedback to look at our processes with a critical eye. The insight we get from our customers is invaluable in enabling us to improve our online and telephone services for all our customers.
Typically, a company needs to communicate different messages in a number of different media to different customer groups. Understanding preferred communication methods, whether online, over the telephone, a text message or a combination of each, is vital. The more accurate and relevant information a company has about its customers the better, as it allows each customer to be categorised, and communication becomes more effective.
Data analysis allows organisations to develop marketing strategies based on customer segmentation. This is key to offering added value and generating new business, as well as retaining customers. We’re all familiar with our personal recommendations on our amazon.com accounts – our past purchases are cleverly analysed to determine what else we’d like to buy.
And it works – this kind of approach has been shown to reduce a marketing budget by 35% and has a 40% better conversion rate than traditional marketing techniques.
For example, if an insurance provider knows that a customer has both household and car insurance with them, they are better placed to price the risk of insuring a second car. It is also easier to intervene around renewal dates, lock in loyalty and potentially sell other products and services.
A simple telephone call can be an excellent opportunity to source data from a customer. Smart call recording can create greater levels of insight and understanding of a customer, and ultimately help to create a trusting relationship. It also ensures protection for any later disputes.
Again, from a providers pint of view, empathy matching software can direct the customer’s call to the most appropriate available call centre agent by looking at age, gender and psychometric variables. Furthermore, apart from the traditional question and answer process, speech analytics can be employed to uncover more information about the caller. By analysing specific words and patterns, further information is revealed which can then be used to enhance the customer service.
The opportunity to speak to a person rather than filling in an online form will always have a place in the insurance business. Where online and telephone services are combined, the user experience can be improved and the customer will, if engaged correctly, benefit. An operator can help the caller fill in an application more accurately – so that instead of guessing or ignoring a complicated question, the customer can be guided through the form to completion, meaning a higher quality of disclosure and fewer rates of dropped applications. This process can be automated so that the outbound calls can support applicants who are seen to ‘struggle’ with an online application.
Wet signatures
Finally, we must ask here if the use of a wet signature is still necessary? Many companies are now dispensing with the need to return a form completed with a customer signature – is there still a need when the application process has been recorded? It serves merely to slow down the process, resulting sometimes in dropped policies, and frustrates the customer while losing business for the company. Isn’t it time now to eliminate this antiquated process? The solution is to put in place a secure method for ensuring that the applicant checks and verifies every answer on the form.
Technology clearly plays an integral part nowadays in the way the financial services industry interacts with its customers. As the quality and visibility of data improves, organisations can begin to build a single view of the customer. Then, with all the information about each customer in one place, they can start to offer more of a joined-up service and tailor offers that improve the experience to customers and the capability for the business. Customer data is one of the most strategic levers a company has, and used correctly it can help a company understand, anticipate and respond to customer needs and provide a real competitive advantage.
Stuart Hayman is a business consultant at Vertex
