From the 1980s through the early 2000s, many advisors and brokers dreamed of having more help with critical yet time-consuming tasks like proof of insurance and minor claims processing. We mused, “If only I had help with those tasks, I could spend more time focusing on high-touch customer service and sales.”
Today, digital innovations are streamlining much of the way carriers and their representatives conduct and generate business. These innovations are precisely the help we wished for.
So why do many in our industry resist digital advances like customer self-service and apps?
Digital enables us to create deeper customer relationships
Digital technology is not going to replace us. The tech advances we have access to today are simply encouraging us to reposition our number-one asset—our people—to do the high-dollar, deeper-dive work with clients that we only dreamed about years ago.
Our industry is gaining exponential efficiency from the digitization of many of its processes and systems. Greater efficiency in other areas enables advisors to spend more time focusing on high-return activities like conducting annual reviews, offering comprehensive financial advice, handling complex service issues, and increasing product sales and density.
Technology enables us to serve our customers more fully. It has created model distribution—an ecosystem of interconnected offerings from a variety of participating providers that makes it easier to fulfill multiple needs for our customers and provide an integrated user experience.
When we leverage this enhanced distribution model, we build deeper customer relationships, which, in turn, lead to increased product density and customer and advisor retention.
Technology is facilitating the evolution of distribution at all levels
The COVID-19 pandemic accelerated many carriers’ tech efforts. Unable to serve customers face to face, they found other ways to reach out to prospects and customers. But there is so much more we can do.
According to a May 2021 report by DAIS, a platform focused on making modern technological advances in the insurance industry, artificial intelligence (AI) is the future of insurance. AI enhances our ability to hyper-personalize the customer experience, drive product innovation, and automate routine tasks.
A 2021 Deloitte study echoes that claim. The study predicts that AI will evolve underwriters into customer portfolio managers and strategic analysts, advisors into specialized customer experts and ecosystem integrators, actuaries into strategic planners and cross-functional collaborators, and claims officers into customer loyalty drivers and customer liability experts.
This is nirvana, isn’t it?
Savvy companies use digital to drive leads and grow faster
A Liberty Mutual/Safeco Insurance study conducted in October 2020 introduced the inaugural Agent for the Future Index—a quantitative assessment of the state of digital transformation in the independent agent channel. Researchers divided the survey respondents into three groups: low, medium, and high digital adopters.
The study revealed that high digital adopters improve the digital tools they have in place and use those tools to drive leads. Their top priorities are educating their customers about new ways of working with them and extending their online presence for marketing.
The study notes 47 percent of high digital adopters invested in digital capabilities in the past year, while only 18 percent of low adopters did so. And high digital adopters had a 60 percent greater increase in revenue growth than their less digitally savvy peers.
During the pandemic, all levels of the distribution chain were tasked with finding innovative ways to connect with their communities online. Leveraging digital technology simply requires expanding those efforts.
Digital enhancements don’t have to be complex
The concept of AI can seem complex and intimidating. Most of us have no idea how to implement machine learning or data cleansing into our systems. That’s OK; plenty of experts out there specialize in AI implementation. We can hire them once we make digital enhancement a priority for our companies.
Making your company easier to find online and easier to do business with doesn’t have to be complicated. During the pandemic, many carriers and agencies increased their outreach and customer engagement simply by enhancing their websites and stepping up their social media activity.
Three strategies to begin leveraging technology
A technology CEO and member of the Forbes Technology Council says that delivering an excellent experience is now a matter of survival. He writes, “From your website and your mobile app to your social media profiles and your email campaigns, insurers must always deliver the best customer experience. To build deeper relationships with customers throughout the entire customer journey from application to cross-selling, insurers must build engaging, personalized journeys at every step of the way. We are entering a new era of innovation and giant technological leaps in the insurance industry. These are the exciting times we are living in.”
So how can carriers and their advisors boost their digital capabilities? Here are three simple strategies to begin implementing immediately.
1. Leverage technology to gain new prospects and retain current customers
For decades, customers have remained loyal to their carriers and their advisors. Today, that loyalty is at risk of being replaced by a thirst for more options, faster access, and better experiences. Customers are in complete control, and that’s the way it should be. The silver lining is that when we differentiate ourselves by providing an exceptional customer experience, we can get prospects to at least consider us. Providing an exceptional experience will also strengthen our current customers’ loyalty.
How do we accomplish that? By changing the distribution model. This means allowing technology—an app, for example—to handle the low-return tasks like making ID cards available and processing transactions such as tow claims.
Don’t fight it; embrace it. Free of doing those routine tasks, your company and your advisors can focus on deepening customer relationships and personalizing solutions. They can discover novel ways to exceed their clients’ expectations and focus more on providing advice and guidance.
2. Make it easy for customers to find you, then engage them in other ways
Today’s consumers are accustomed to exploring their options online. Make your company easy to find and your offerings appealing, and people will seek out more information. For example, we know that auto insurance is the product that will get most customers to consider us. Creating an engaging, easy-to-access auto insurance page on your website will draw customers in. Once they engage with you, then you can differentiate your company and your service.
Although many customers initially approach companies by seeking quotes for their basic protection needs, most also want expert advice on their overall financial health. Make it easy for them to discover that you offer a full array of insurance and financial services solutions.
For example, an advice relationship might begin with guidance about liability coverage. Customers might not realize that $500,000 limit in liability coverage isn’t sufficient if they cause an auto accident that results in several million dollars' worth of injuries to a family. Advisors deliver exceptional value when they educate their customers about critical issues like this.
3. Continually improve your products and delivery mechanisms
As commoditization in our industry continues to be the norm, carriers must continually improve their products and delivery mechanisms. Make sure your offerings provide not just perceived value but real value.
Product pricing is one example of the difference between perceived and real value. Years ago, advisors perceived some carriers as “the cheap companies.” But over time, as those companies attracted and retained more clients, advisors realized that the companies aren’t cheap. They are serving the segment of the population shopping for affordable insurance. These companies offer good-quality products, make it easy to do business, and deliver their products seamlessly.
Avoid focusing only on price, but recognize that some clients are sensitive to pricing on certain types of insurance. Provide options for all price points and levels of service desired.
Build digital innovation into your budget
Remember when the Internet first came on the scene? Many resisted the innovation, thinking it was just a fad. When they realized it was the way of the future, they had to prioritize establishing a presence on the web.
Our customers demand ease of use through digital and online technology. We must prioritize it, budget for it, and implement it. Our survival depends on it, and our customers expect it.
Troy Korsgaden is an international insurance carrier consultant and industry main-platform speaker. He is the author of six books and two workbooks. His most recent book, published in 2020, is titled Inflection Point: Redefining Your Role in the Insurance & Financial Services Industry when the Existing Model No Longer Works.
Korsgaden consults with most major companies in the insurance and financial services industry in some capacity, working with large carriers, both in property and casualty and in financial services. He also serves as a subject-matter expert in technology and how it applies in the backroom for carriers and their distribution. He is considered an expert in distribution strategy, in both personal distribution and other methods. He also provides consulting services to corporate leaders on customer service, change management, and transformational work. He advises leaders at all levels of organizations on global marketing strategies.