There is a much dreaded word in our household, ‘life admin’. Whenever it is uttered it is met with dread. I dislike ‘life admin’. It is complex, time-consuming and generally very tedious.
That is why it is fantastic to see that the insurance industry is rising to the challenge of reducing time spent on ‘life admin’. Indeed, these leading firms are recognising the potential that technology and data has to improve the quality of interactions that customers have with their insurers. Whether this is by requiring no seemingly bureaucratic form to be filled or where a claim can be appraised quickly through a photo – the potential is huge.
However, these advances alone are not enough to engender customer loyalty. They are a necessity to set future interactions up for success but cannot create this success on their own. So, as well as minimising time spent on ‘life admin’, insurers must also focus on improving the frequency and quality of the interactions with their customers. Indeed, the industry is starting to wake up to the fact that the lack of customer touch-points are of their own making. The ‘fire and forget’ business model has no future.
We are already seeing that new start-ups and well-focused incumbents are creating new touch-points throughout the customer lifecycle by recognising that connected technology provides a new medium to engage. They also recognise that the customer universe expands beyond insurance and are finding new ways to be part of the customers’ daily life and routine – e.g. free coffees and subsidised gym memberships.
One insurer has reaped the benefit of improving the frequency and quality of customer interactions, experiencing:
81% higher premium size
63% lower lapse rates
60% higher ancillary product sales.
For more insight, please see here.
So, whilst it is great news that insurance firms are looking to simplify existing processes, the next challenge for them will be to drive positive experiences from this capability (rather than simply removing negative experiences) to really add value and drive loyalty. Indeed, connected technology and big data affords insurers the opportunity to engage with customers more frequently and in positively reinforcing ways e.g. through reward programmes tailored to the individual client’s behaviour.
Aviva chief executive Mark Wilson is piloting a new idea that has the potential to shake up the insurance industry. The insurance giant’s “Ask It Never” concept will enable customers to buy policies without filling out endless forms and answering numerous questions.