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A superior, user-friendly customer experience is crucial to achieving a competitive advantage. As more of the customer experience has moved to the digital arena, so does the need to digitise parts of your insurance company. Self-service portals and new technology for customer service might help you do just that.

Higher customer expectations, digital natives and new market entrants are driving the insurance industry into the digital landscape. To meet these new customer demands, several insurers and brokers are undergoing a comprehensive digitisation process to acquire new customers, improve customer service and reduce customer churn.

Higher Customer Expectations in the Insurance Industry

Consumers have gone digital, and 24/7 accessibility is crucial. Customer interactions via telephone or in brick-and-mortar locations are things of the past. Today’s consumers both prefer and expect to be able to perform high-value transactions online, whenever they want, wherever they want. 

The same goes for the insurance industry. In fact, 71 percent of consumers use some form of digital research before buying insurance, 47 percent want more online interactions with their insurers, and 81 percent want to manage their investments online.

These numbers should not be surprising. After all, consumers have grown accustomed to easy access to information online as a growing number of businesses has increased their digital presence and provided user-friendly websites, digital customer service and a range of self-service options. Furthermore, a new generation of uncompromising digital natives is bringing even higher demands to the table, as they expect to perform any transaction online and to interact with businesses through numerous different digital channels.

According to Marketforce’s “The Future of General Insurance Report 2016”, one-third of their survey’s respondents name InsurTechs as the most likely initiators of a major disruption in the insurance market. As these firms are deeply immersed in new technological developments, more and more incumbents are scrambling to digitise themselves to meet the demands of a new tech-savvy generation and improve customer service.

Self-Service Portals as a Customer Service Tool

Self-service portals, websites that allow your customers to perform high-value transactions online, have for a long time been valued as a tool to reduce costs. However, in recent times, they have come to be an essential element of the customer experience. In fact, 90 percent of consumers expect an organisation to offer self-service customer support portals.

Self-service portals allow you to offer precisely the type of service and information the majority of your customers prefer. This could be anything from the analysis of insurance objects and risks to damage history analytics and recommendations on how to avoid future damages. In short, a portal that provides customers with a comprehensive overview of their insurance portfolio and enables them to manage their possessions, based on data and information you already have at your disposal within your organisation.

Many insurance companies already offer such self-service portals to their customers. One major problem with these, however, is that they rarely are sufficiently user-friendly or deliver enough value to the end user. The reason behind this might be, as McKinsey points out, that what customers want and want businesses think they want often are two very different things.

In fact, I recently spoke with a firm that had developed a self-service portal that flopped, because they hadn’t properly verified that the portal would provide enough value to their customers. Lesson learned. Everyone should test their ideas before investing in new customer service initiatives, through prototyping or the lean start up methodology. This is crucial to deliver a customer service channel that your customers actually will use. 

And if you are developing a customer self-service portal, let the customers maintain their own data in a user-friendly self-service portal, give them additional value by providing real-time data analysis within the same portal and experiment with new ways to more efficiently interact with your customers. After all, 77 percent of US consumers say “valuing my time” is the most important part of good online customer service, according to a Forrester report.

New Technology, New Customer Service Opportunities

Self-service portals are and will continue to be important tools for customer service. However, as technology evolves further, new customer service opportunities emerge. Let me give you a few pointers as to what possibilities are developing at the moment:

  • Chatbots and AI: Chatbots powered by artificial intelligence (AI) are becoming a viable customer service channel. The American property insurance company Lemonade, for instance, offers their customers the possibility to get insured in as little as 90 seconds through their AI-powered company bot. And as the technology behind AI (and its subset machine learning) develops further, chatbots will soon be able to not only perform rule-based actions based on a word but to understand the meaning of words in different combinations. Still, insurers should carefully consider the complexity, instability, accuracy and costs of automating the customer experience and implementing such technology into their operations.
  • Omni-channel communications and service: As previously mentioned, more and more people use digital research before buying insurance. Consequently, insurers should put effort into understanding the entire customer journey and not only optimise individual contact points. McKinsey, however, points out that digital efforts often end up becoming just another channel, add complexity and provides a suboptimal experience for customers. Instead, they advocate a marriage between traditional and digital channels. 
  • On-demand distribution: Changes in customer behaviour also impact how they purchase products. Insurance buyers increasingly desire new ways of purchasing and managing risk. The UK-based insurance company Trōv accommodate these needs. They offer an alternative solution for the mobile generation by giving them access to an on-demand platform that generates real-time prices for different insurable items.
  • Value-added services based on IoT-data: We live in a hyper-connected world where billions of devices are connected to each other through the Internet. The data these devices (the so-called Internet of Things) generate, enables insurers to provide additional value-added and data-driven services for their customers. Car telematics, for instance, may be used to provide risk management for car drivers. Smart home sensors and monitoring systems may be used to enable the customer to control risks in the household. Wearable technology, such as Fitbit, may be used to allow policyholders to manage and reduce their health risks.

This, however, is just the beginning. As technology evolves even further, new possibilities for improving customer service will become available. If you’d like to read more about what the future holds for the insurance industry and how insurers can welcome an increasingly digitalised environment, you can read on in our e-book “The Insurance Industry 2025: A Digital Transformation Roadmap”, available for download below.

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