How insurance companies can raise the bar for customer experience in 2022 & beyond

Manoj Chitgopeker

The world of insurance has changed in a big way. Customers are now used to excellent digital experiences and expect the same level of experience in the insurance sector too. The insurance sector in India too is adapting quickly to meet the needs of customers, which was evident during the COVID-19 pandemic, when insurance service providers succeeded in providing uninterrupted services.

As India slowly tries to limp back to normalcy, there are some time-tested techniques and technologies, which every insurer should try adopting to raise the bar for customer experience in 2022.

Setting the context

Insurers in general expect more rapid growth, although non-pandemic challenges around regulation, talent, sustainability, and evolving consumer preferences may present speed bumps. To overcome these challenges and to adapt to the pandemic’s aftermath, insurers are focusing on its employees and investing in emerging technologies. In addition, they are also strengthening their reach and capability by collaborating and acquiring insurtechs, along with leveraging their cross-industry partnerships.

Some of the key market drivers include:

  • Easy access to policy and claims info through mobile and online websites.
  • Rise of insurance aggregators or price comparison websites (PCWs).
  • Growth of the gig economy as a new customer segment.
  • Growth of ecosystem or cross-industry partnerships is driving revenue growth.
  • Higher risk awareness led to the growth of travel, medical, and supply chain insurance.

Some of the key market challenges include:

  • Rising insurance claims owing to: COVID and natural disasters, supply chain disruption, growth in inflation, and significant growth in cybercrime.
  • The above factors have been impacting the industry’s profitability and insurance rates, questioning the long-term economic viability of insurance business model.
  • In addition, recruitment challenges and increased levels of regulations continue to pose a threat to insurers’ financial health.

How automation can make a difference

By 2024, 50 per cent of all policies of non-life and life insurers will be sold through a fully automated personalised insurance engine and client-guided customer journeys, creating stronger brand loyalty. Through the year 2023, insurers that exhibit high automation maturity traits will be three times more likely to exceed their growth metrics compared to their peers.

AI will be increasingly used to build end-to-end claims automation. By 2024, 40 per cent of insurers worldwide will leverage AI to build end-to-end claims automation — with at least 30 per cent of AI investments dedicated to virtual damage assessments and preventive measures. By 2025, 85 per cent of insurers worldwide will invest in AI-powered fraud detection technologies in claims management functions.

Today, no customer wants to wait to talk to an agent for getting answers to basic queries. Wherever possible, insurance firms must use chatbots to automate the answering of queries. This has been used in a significant manner by most insurance service providers. Chatbots powered by AI have also been used by many insurance firms for the settlement of claims. Today, chatbots can pull up customer policy information from their respective systems and initiate the claims filing process. Chatbots can also be used for automating premium payment collection. In some cases, chatbots are also being used by insurance service providers to make relevant product suggestions, which helps in cross-selling and up-selling. These chatbots help insurance service providers provide a standardised and consistent customer experience. During periods of high volume, chatbots can provide seamless service without impacting customer service timelines.

With every digital activity, more and more data is being generated. With more data now available, many insurance firms are looking at automating every possible process. Let us consider the process of accident insurance. In the traditional process, a surveyor comes and examines the vehicle for damages.

Today, in the case of many insurance service providers, this is now AI-enabled. The owner takes a few photographs of the vehicle, and uploads them using the insurance company’s app. An AI-enabled application estimates the damage and conveys the amount that can be claimed within a few minutes. If the customer approves, the money is instantly transferred to the customer’s bank account. This leads to true customer delight as the customer does not have to wait for the insurance firm to contact it, appoint a surveyor, arrange for a site visit and then examine the claim. The same possibility exists for health-related insurance claims, where an AI solution can ingest the information available in the hospital reports and authorise the optimum claim amount that can be sanctioned based on the policy sum insured and other parameters.

Use IoT to delight customers

Through 2025, IoT-driven insurance propositions will generate USD 350bn in insurance revenue. It is all going to be enabled using connected insurance. Insurance companies leverage IoT-enabled devices to generate copious amounts of data. That data can then be analysed to give insurers insight into the activities of their customers, allowing them to not only better understand their customers and design products around them, but also predict and potentially avert incidents that lead to claims before they occur.

Also Read: Artificial Intelligence: The Science Behind The Good Customer Experience

Similarly, in the world of connected systems, IoT can also be used for improving customer service and delighting customers. For example, using telematics, drivers who have good driving practices can enjoy lower premiums, than drivers who drive vehicles in a rash manner. This is called usage-based insurance and can be used effectively to encourage good driving. The same concept can be extended using wearables, where insurance firms can lower the premiums for customers who follow a healthy lifestyle. The wearables can be used to monitor the health of specific individuals who have agreed to opt-in for health monitoring and share health-related data.

Insurtechs are already harnessing IoT endpoints by:

> Enabling telematics business models for personal auto and expanding into commercial auto, homeowners, and commercial property.

> Providing greater insight into public liability risk in connected buildings.

> Automating call/put triggers on parametric products to remove payout friction — particularly for climate risk transfer.

> Increasing risk transparency and reducing transaction friction between brokers, insurers, and reinsurers for specific lines of business (LOBs) such as marine.

In summary, a superior customer experience can be an extremely competitive advantage for insurance companies. By using data to create personalised experiences and leveraging AI to automate and improve every possible process, insurance firms can raise the bar for customer experience significantly. The new digital era requires a new approach, and the few insurance firms that can effectively leverage emerging technologies to fulfill changing customer expectations will eventually lead and shape the future of the insurance sector.

Views expressed by: Manoj Chitgopeker, Vice President, Strategy & Business Development, NTT Ltd.

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