How are life insurers transforming customer experience for the 21st century?
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Life insurers are shaping the future of underwriting by delivering exceptional customer experiences that make the customer journey simpler, easier, and friendlier.
To accomplish this, they are hyper-focused on robust digital, scalable, data-driven customer experiences to grow the business. At the same time, they are prioritizing empathetic, personalized experiences that enable lifetime relationships with customers.
Prioritizing the customer is not just the right thing to do, it is also good for business. According to a McKinsey study, insurers that prioritize customer experience generated 2-4x more growth1 in new business and 30% more profits than firms with an inconsistent customer focus over a five-year period.
Here are 10 customer experience trends we've observed among US life insurers. These are the ones to watch as the future of underwriting unfolds.
1. Empathizing with customers
Life insurers are creating cultures where employees are motivated and inspired to care2 about the customer. Senior leaders are setting the vision for this customer-centric transformation by deepening an enterprise-wide focus on customer empathy. These core values are actively communicated to all employees, usually through training and workshops.
2. Enabling digital experiences
Creating scalable and digitally-enabled customer experiences are now strategic table stakes for life insurers, but still a work in progress. Simpler and easier ways to buy and sell life insurance include providing mobile apps, self-service portals, and automated underwriting and claims processes. Legacy systems make this digital transformation a special challenge for insurers, often requiring them to assemble a new ecosystem of digital partners3 to augment IT services they wish to provide.
3. Optimizing big (customer) data
Life insurers recognize big data optimization as a #1 priority. They know customers' digital footprint, call data, and policy information can provide new insights for customer segmentation, effective marketing, pain-point analysis, up-sell and cross-sell opportunities, and lapse and claims behavior. Life insurers aspire to know far more about their customers than ever before. Their challenge is to harness the power of big data.
4. Nudging customer behavior
Behavioral science is an important new tool for testing how unconscious biases and contextual factors influence or "nudge" customer behavior. Swiss Re's industry-leading Behavioral Research Unit4 has helped life insurers make tangible improvements across various points of the customer journey by making small changes that have a large impact. Some life insurers are beginning to create their own behavioral research units to conduct this kind of work in-house.
5. Removing friction from underwriting
Insurers are developing ways to make underwriting easier, faster, and more convenient for consumers through automation, triage models, risk scores, and the use of alternative data sources5 like electronic health records. Insurers are offering a seamless process with accelerated underwriting programs that provide instant approval for qualified applicants at the point of sale, while also looking for ways to streamline processes for customers who still require full underwriting.
6. Offering omnichannel experiences
The push to go digital does not mean human touchpoints will go away. Call centers, in particular, are learning what tasks to automate and which ones to save for humans. While insurers are experimenting with chat bots and other new AI technologies, they are also concentrating energies on integrating technologies like voice biometrics and sentiment analysis to help humans better serve other humans. The focus is to make it possible for humans to move seamlessly between channels and devices.
7. Innovating new products for new customers
The line between customer experience and innovation is short as life insurers seek to serve customer groups and address customer pain points with new ideas. Insurers are creating in-house innovation centers where design thinking has taken hold. Innovation projects often focus on empathizing with new customer segments like millennials and multiethnic groups using new contextual research methods like ethnography. Prototyping solutions in test-and-learn environments allows for iterative product development and new approaches to underwriting.
8. Engaging with customers on apps
New startups have entered the life insurance space, collaborating with insurers by offering digital customer engagement platforms, primarily in the health and wellness space. These new platforms typically provide a digital app experience that allows the insurer to interact with their customers in a more personalized, consistent way, focusing on the "life" part of life insurance in a data-rich environment. These apps aim to enable cross-sell, up-sell, and new product development and underwriting opportunities.
9. Retooling sales teams
Imagining the sales force of the future is top of mind as life insurers think about the kind of customer experiences they need to provide in the next five to 10 years. This goal involves arming sales teams with digital tools like accelerated underwriting programs. And some are re-envisioning the role of financial advisors as "life coaches" with the goal of building lifelong relationships with customers. This requires delivering excellent customer experiences that build brand loyalty.
10. Measuring customer experience (CX)
"You can't manage what you don't measure," as the saying goes. Indeed, life insurers are looking for better ways to measure and benchmark their customer experience against competitors and other industries. "Voice of the Customer" programs are digital platforms that enable life insurers to track NPS scores and other tailored experience metrics by surveying customers at key touchpoints. LIMRA began a CX Benchmarking Study in 2015 focused on life insurers in the US, which will help life insurers to better track their CX progress against competitors, especially as the program continues to grow each year.
Underwriting of the future will require a customer-first mindset. Swiss Re can help you transform your underwriting customer experiences by providing customer-centric underwriting solutions, data and analytics expertise, and Behavioral Economics consulting services. To learn more about how Swiss Re can support you, contact your Swiss Re representative.