Personalising the customer experience important for insurers

Personalising the insurance experience is not a new concept. In fact, insurers’ ability to understand their customers on an individual level has long been considered the panacea for the sector. Evolving technology, more sophisticated data analysis tools, and the emergence of artificial intelligent and robotic process automation are contributing to an enabling environment to fulfil this vital step in the insurance value chain. After all, by having an improved awareness of their customers’ actions and behaviours, insurers can deliver more frequent and high-value engagements.

This is imperative if a satisfactory experience characterised by speed and convenience is to be delivered. Much of the current focus for insurers is on the importance of the customer experience and being able to deliver on their evolving expectations. By combining fast and efficient services with rapid issue resolution, an insurer has the strategic pillars on which a successful business in the digital era can be built. By integrating these components, an insurer can deliver a more bespoke customer experience presenting it for opportunities to gain a much-needed competitive advantage. And for their part, insurers are aware of this potential and looking at ways to do this.

Embracing more channels to get this engagement going is becoming part of the agenda for insurers. But it is not only important to offer a variety of channels to choose from. After all, engagement is about more than just delivering different channels for customers to interact with. It centres on providing personalised recommendations based on an individual’s interest, life stage, and behaviours.

But this level of personalisation is not something that can be considered a long way off. Thanks to how many other service sectors have embraced digitalisation, insurance customers also want a tailored offering. This is more so the case after the hard lockdown conditions of last year which have offered the opportunity to reimagine processes and take significant strides towards being a more digital-centric organisation. Fortunately, the wealth of customer data, analytical tools, and marketing technology empower insurers to run multitudes of personalised campaigns. These, in turn, are used to improve acquisition, cross-selling, and marketing return on investment.

Being different

The secret to success in this regard is clear. If insurers want to roll out something that resonates with consumers then they must do so through a differentiated customer service experience. This requires creating a frictionless experience. For example, claims can be processed in real-time using an app at the scene of an accident greatly reducing the complexity of a general cumbersome process.

Additionally, embracing an omnichannel approach is another critical area of focus. This brings together all the available insurance channels to maintain smooth communications with customers when they move through the different mediums. For instance, a query might start with a call to the contact centre, continue with the app, and be resolved via a bot. This is where self-service becomes important as it can give consumers control of much of the experience as insurers introduce more digitally-enabled customer touch points.

Data sense

Customers are willing to provide personal data to get this done. Evidence shows that a higher proportion of consumers are willing to share data collected on their smart watches and other similar wearables. In turn, insurers have relied on more detailed questions and medical records instead of in-person physical exams.

The shared value model driven by Discovery Group reflects a more engaged wellness ecosystem derived from product design, pricing, and insights on customers. It reflects how much people are willing to give by way of information to have this level of customisation and personalisation added to their insurance portfolio.

Intelligent automation providing fresh opportunities for customer-centricity in insurance

The global intelligent process automation (IA) market is expected to top $14 billion by 2024. However, the insurance industry has, in some instances, been slow in reacting to the opportunities presented by the technology. This is not altogether surprising given insurers’ historic slower pace in adopting new technologies when compared to the banking sector for example.

Unlike robotic process automation (RPA), which can be considered a more mechanical process that frees up staff from repetitive job functions, IA combines RPA and artificial intelligence (AI) technologies to empower the intelligent automation of business processes. For insurers, part of IA sees intelligence injected into those business processes that focus on critical decisioning points such as underwriting and claims. So, while RPA relies on algorithms that can replicate keystrokes and greatly assist businesses with high volumes of transactions, IA includes a specific focus on automating decisioning in business processes.

Fortunately, the lockdown has contributed to a momentum shift with insurers realising they can no longer rely on traditional, paper-based processes. Instead, the focus has been on digitising as much data as possible, a critical step before any form of automation can be implemented.

A matter of IP

And yet, when it comes to the decisioning process, insurers still view it as a fundamental component of their intellectual property. One can understand the thinking behind this given the amount of time spent training individuals to become experts in their fields. After all, the potential exposure when calculating risk and performing underwriting functions can number in the millions of Rands if done incorrectly.

The reluctance to automate human expert decisioning with AI is evident. But this does not have to be the case. AI can be used to model the most highly skilled underwriters and claims experts within the insurer and has the added benefit of being available 24×7 which dramatically speeds up historically slow processes, often subject to tight SLAs. This greatly improves the customer experience as self-service solutions can be introduced where people can manage their policies at a time convenient for them.

Given their nature, insurance companies are risk averse and generally slower to adopt new technologies. They are generally reliant on their ‘human experts’ and are hesitant to replace them with automated solutions. But the need to use these experts’ time more efficiently will gradually see insurers embrace IA, thereby freeing up resources now capable of delivering more strategic functions inside the organisation.


It could very well be the focus on customer-centricity that delivers the final push needed for insurers to fully adopt IA. By improving manual and multiple step processes through automation, employees can be repurposed for other, higher valued tasks.

Real-time decisioning through AI can, for example, reduce the number of fraudulent claims. This, in conjunction with other more efficient administrative processes, will bring about a reduction in product pricing that will lead to happier customers and ultimately an increase in profitability and improved market competitiveness.

An evolving retail insurance market

The disruption caused by the COVID-19 pandemic has resulted in a reimagining of the retail insurance sector. With an international survey finding that 40% of insurers expecting to increase investment in direct online sales and the related pressure of enabling a remote sales force, the industry is on the precipice of a fundamental change in business operations.

The hard lockdown conditions in many countries around the world last year meant that it was difficult to continue with the traditional broker-led insurance sales model. What was once a channel driven by face-to-face engagement suddenly had to find a different way of reaching out to prospects. Even managing existing customers became challenging as brokers had to use email, mobile, and instant messaging environments as the primary means of keeping in touch.

Going direct

From a client perspective, this more digital-led way of doing business has been welcomed as end users have been embracing digital solutions over the past several years. There is now an expectation that their service providers must deliver self-service options as well as be available on the platforms that customers use in their personal lives. Even though lockdown restrictions have eased, the increasing variety of touchpoints now mean insurers must think differently about their sales strategies.

Insurtechs have long gone a digital-only route. And while the incumbents will never be expected to completely forego broker models, they need to integrate more sophisticated options into processes to remain relevant and competitive. Using digital steps throughout the customer journey from the start of the sales process right through to its maintenance and management phase become a critical enabler to success. It is especially younger customers that are most comfortable to switch to a more direct form while the older generation will continue to be reliant on a broker-based approach.

Insurers can consider three approaches to address this multi-access customer environment. First, they can digitise the existing agent channel that includes focusing on providing advice for customers and generating leads for agents. Secondly, they can integrate agent and direct channels. This brings a new collaborative environment to play and creates uniformity of the customer experience regardless of whether they are going direct or through a broker. Finally, the insurer must consider enhancing the direct channel with human components that better explain complex products with personal advice.

A remote world

Of course, direct sales are just one part of the new environment. Remote work is quickly becoming the status quo requiring insurers to ensure employees have secure, reliable access to systems, data, and the means to effectively engage with customers.

The new normal of remote work means insurers must re-examine their own risk portfolio as well as that of their customers. If people spend less time driving and more time at home, their risk profile will change. And then there is the potential of COVID-19 related claims. From loss of income to health issues, there is a variety of claims that must now be considered many of which have not been covered by existing policies.

How insurers adapt to this new environment will become critically important to chart their path for a more digitally-driven landscape and help meet (and improve) on customer expectations and experiences.

Strategic alliances between insurers and technology companies key to modernisation and digitalisation

There is no disputing the importance of technology for an insurer. But while delivering to changing customer and channel expectations takes priority, they must accelerate modernisation and digitalisation initiatives at a pace which often surpasses what their own internal efforts can deliver. Given that technology innovation is not their core focus, insurers will increasingly partner with specialists in the field to bring value at the speed required.

Most established insurers are faced with disruptive new entrants who have designed their business for more digital-centric client requirements. Most of those new entrants are as much technology companies as they are insurers. Because the in-house technology teams of the insurance incumbents have significant legacy systems, data, and processes to worry about, they cannot compete with these types of insurtech companies on an equal footing.

Insurers are therefore turning their attention to forming alliances with technology companies capable of augmenting their own capabilities. Consumers are the main drivers behind this as they are looking for more digital engagement options and experiences especially during the initial phases of the insurance journey.

The competencies of an insurer lie in developing products, understanding actuarial models, risk and pricing, and the needs of customers. In addition, their access to customer bases and distribution channels are their true strength and what they need to continue to drive to stay ahead. In a way it comes down to leveraging this legacy as a competitive advantage. Insurtechs simply do not have the history and scale that customers often look for in an insurer. This gives larger, more established players an advantage. But this alone is not enough. It needs to be accessible in a more modern way. Partnering with a skilled technology company unlocks this potential.

Overcoming obstacles

This approach only works if the insurer identifies the technology competencies they are lacking or looking to build. An insurer needs a partner that brings this value to the business and shares similar values and understanding. While a technology company might have a strong understanding of IT and use it to develop their own offering, they might not fully understand the requirements of an insurance business.

This brings with it a risk of misalignment between the insurer and the technology partner. It is therefore critical to find a company that can bridge that gap. Furthermore, the internal team at the insurer might feel threatened by the partnership as this could potentially circumvent them. The insurer needs to integrate this partnership into their way of working and not just deal with it as a typical supplier type engagement.

Delivering agility

These partnerships empower insurers to become more digital and address more sophisticated demands of consumers, at a more rapid pace. And yet, despite this potential, many financial services companies tend to be secretive and not collaborate. Many believe that they can deliver to these requirements on their own, which may be the case, but it is all about the speed at which it can be done, and how quickly one can adapt as the world continues to change.

Events of 2020 and the pressure to digitalise have opened more insurers up to the potential of alliances. This will also assist in accelerating the digitalisation journey that includes further innovation such as intelligent automation and robotic processing. The incumbents must now equip themselves to embrace technology more readily through such partnerships so they can compete in 2021 and beyond.