In 2020, the life insurance industry is going through a rebirth. When a life event happens that makes someone decide on the need for life insurance, a visit to an agent is no longer necessary. Paramedical exams, in many cases, are becoming a part of history. Faxes and phone calls are being quickly replaced across the industry with e-apps, texts and push notifications.
With online application and issue, digital self-service and fully omnichannel capabilities that put researching, quoting, applying and buying into the hands of customers, there is almost nothing that can’t be done without direct human contact.
There is no question that, in 2020, the shift is toward digital. COVID-19 has made it challenging to schedule in-person business transactions, and the signs of a return to “normalcy” aren’t being seen yet. Based on that reasoning alone, life insurers who are budgeting for digital growth and transformation in 2021 are investing their money wisely.
The twist comes when insurers consider the most critical part of their existence – the customer transaction. From Accenture: “Consumers are as demanding in their own way as their predecessors. Where Boomer and Gen-X customers expected prompt, courteous service delivered in person, Millennials expect its digital equivalent. They measure insurance against their best experiences with digital standouts like Amazon®, Spotify®, and Uber®. They expect interactions personalized to their attributes, behavior, and intent, continuous across every device and platform and every step of their customer journey—as they choose to define it.”
Indeed, the customer experience in 2020 depends on digital enablement. But the question remains: what is the ROI to run, grow and/or transform legacy processes?
We live in a time where we expect to be connected to information, and we expect that connection to be available 100% of the time. Service is not just expected – it’s demanded. But, as an example of the challenges inherent in an entirely digital overhaul — what happens when our cell phones malfunction?
If you don’t have a working phone, you can’t make a call to get information about what to do next. You can’t access your cellular provider’s self-serve portals – including FAQ pages about what to do next. And, without GPS capabilities, it’s incredibly inconvenient to find a store to walk into for help.
You might consider using someone else’s phone to make a call, but most cellular providers make it incredibly difficult to access information about your account from a phone number that is not yours. You are typically identified digitally by the number that you dial from – anything else is essentially throwing a wrench into the works.
And good luck finding a customer service number that will put you in touch with someone who can address your problem. Trustpilot, a review site, gives Verizon Wireless 1.3 stars out of 5. When you start reading the reviews, you realize it’s largely because it’s nearly impossible to get in touch with them.
That kind of pain can really only be addressed by one thing: an actual human.
The almost-exclusively digital cell phone industry, interestingly, makes a strong case for why digital engagement must be an investment that life insurers are willing to make. It’s the highly-prized “human touch” of digitally-enabled engagement that creates the value of digital transformation.
According to Novarica, “Customer engagement remains an area where insurers can invest. It’s among the least mature functional areas for insurers across the industry, with substantial variation in deployment rates for technologies: some capabilities, like web/email and 360° customer views, are fairly widespread, while others are still emerging. Many insurers are piloting chatbots, but data capabilities like behavior and value monitoring could be better explored.”
The true value of digitizing the customer experience will be found in using new tools that interpret, anticipate and understand policyholder needs. Smart insurers should never try to fully replace the ability to talk to an actual living, breathing human being. But new developments are constantly bringing technology closer to making the digital experience indistinguishable from personal contact. Humanizing the customer experience will be as meaningful to the bottom line as speeding up processes, developing appropriate products and updating legacy systems.
There are, of course, other ways to digitally relate that are forthcoming. Wouldn’t it be great, for example, if a shopper could find a policy by saying, “Alexa, find the best life insurance rates with accelerated underwriting available?” And Alexa (or Siri, or Cortana, or whatever voice-enabled assistant is in the home) took age, general health and risk factors into consideration and brought that shopper to you – already qualified?
Of course, this is only one example of what is possible, and how digital tools are able to make the experience of researching, quoting, applying and buying feel personal. LIMRA’s survey “The COVID-19 Effect: High Tech with a Human Touch to Optimize Life Insurance Customer Experience” found that, “if good online information is necessary for a life insurance sale, it isn’t sufficient. Consumers usually also need a back-and- forth exchange with a person to get comfortable with what they’re buying. Our survey makes this clear: in addition to being an often-used source of information when shopping for life insurance, a discussion with a financial professional is still one of the top facilitators for a person acquiring a life insurance policy. And the factors that rank higher than such discussions (understanding cost, understanding policy terms, and finding trustworthy information) in many cases are probably addressed during a human interaction.”
The study goes as far as to recommend that insurers double down on their investment in tech. “We know, from the survey, and also from experience, that many consumers still need help in order to feel comfortable buying life insurance. However, there are many of areas in which interactions with financial professionals — and other aspects of the life insurance experience — can be improved through technology.”
Digitizing key components of the process like client prospecting, needs analysis, digital illustrations, and underwriting can reduce the need for human resources, lower overall costs and lead to the ROI necessary to support new digital initiatives. Enhancing engagement through improved self service capability and wellness incentives can enhance the overall experience. The result will be a win all the way around, with happier employees, agents, customers – and an improved NPS score.
So is digital enablement a good investment?
As you might expect, the answer is “yes” – but the investment should be made with a budgetary focus on keeping the end-to-end experience as human as possible. Digital tools will never be able to fully replace the agent interaction, nor should they try to. (Good people will always be a carrier’s best asset.) The ability to provide a human (or human-like) experience at any time of need, regardless of what device is in front of a customer, will make good carriers better, and could allow life insurers to become leaders in building the ultimate customer journey and experience.