According to data from the National Association of Insurance Commissioners based on approximately 195,669 annual customer complaints, the biggest bones that customers had to pick with insurance companies were delays, denial of a claim, unsatisfactory settlements, premiums, and lastly – cancellation. Of these, 36% of all complaints were related to accident and health, followed by auto, homeowners, life, and lastly, commercial. The nature and essence of such claims is that they occur when people go through a lot of personal trauma.
This should tell us something about where to focus our attention. And large insurance companies trying to compete on the tech front may be guilty of focusing too much at the wrong place.
Insurtech does have promise, but technology can only be used as a tool in insurance. Tech can help address systematic problems assist in mundane tasks such as record management, help improve market predictions, and provide customers a better search experience in terms of UX and website. That is all good. But I believe there are other areas higher in the value chain for the customer.
And what about the current darling of the headlines, Artificial Intelligence? Yes, AI can and will transform industries but for insurance, the biggest gap today is the lack of validated, production-ready solutions. And even once AI takes root, I suspect the key value will be to drive operational efficiency. The customer-facing functions will be hard to automate. For instance, nothing would frustrate an already traumatized accident victim more than having to share the experience with a chatbot.
Here’s why I think that technology won’t change much for the customers of insurance.
The digital and omnichannel experience:
There has been a lot of talk about how industries must optimize the digital experience and provide omnichannel services. This I agree with to some extent since there are benefits for those customers who are solely interested in research and are browsing their options when it comes to picking a policy. But the utility of this digitized experience must end here. This is especially true for small businesses and those shopping for more complex insurance solutions. Even for customers that are calling with complaints, virtual assistants and chatbots can be incredibly annoying. In these cases, the customer would want to explain their issue to an actual person, rather than an emotionless bot.
The AI buzz:
From taking care of menial tasks to providing insight and data-driven results, AI is a very handy tool in many ways. Healthcare, automobile and even education have seen a massive spike in AI usage, but the same cannot be said for insurance. Yes, on the digital front chatbots and algorithms are used to sift through inquiries and generic FAQs, but AI can never replace the human connection.
Customers of insurance companies are different from customers of any other industry because they usually avail services in times of loss or distress. Whether it’s the loss of property, theft, a calamity caused by natural causes or the loss of a loved one, a customer filing for a claim is usually in distress. This is why instead of splurging on tech, I would much rather impart training to my employees to sensitize them on serious issues. They must be able to do their jobs efficiently, without compromising on reassuring and comforting a customer. I am convinced that this is why customers will come back to avail of your services.
Why robots will NEVER improve customer service:
Unlike industries like manufacturing and automobile, insurance does not rely heavily on production tasks or administrative tasks, the two key areas where robotics is applied. For insurance, robotics and automation are unlikely to do anything for the customer. In fact, I will go further and say that this will not even come close to the customer experience a well-trained, empathetic professional will provide. Machines and robots will not be able to deliver the kind of personalization that insurance calls for – the human connection (again). A customer will trust helpful advice from an agent far more than an algorithm which will crunch a bunch of data and tell them which policy is best for them.
Depersonalizing an already impersonal industry:
Let’s face it, the insurance industry as a whole has not enjoyed a great reputation. Stories abound of traumatized customers at difficult times and rejected claims for seemingly no reason. This is, of course, disappointing since insurance is supposed to be a tool to help people at their worst moments. This is why I feel that instead of gearing up for a tech race, insurance companies must invest in their people to enable them to provide an empowered, knowledgeable, transparent, and empathetic customer experience. I’ve mentioned the human touch on a couple of occasions and that’s key. We must be investing in training and drafting standards that can help customers make better choices and get better outcomes. Isn’t that the point of technology anyway? To enable customers and enhance their experience?
I have no personal feeling against technology, I just feel like insurance companies need to step up their game to build personal relationships, foster empathy, and provide real, flexible solutions which help build long-lasting relationships with their customers. Nobody really wants insurance, but everybody needs it. From my perspective, technologies that could benefit customers and agencies alike would be investments in cybersecurity.
In conclusion, treat the customers well, hear them out, and invest in the safety of their data. Technology may offer tools to help insurance companies, but it is up to the companies to use these tools to help the customer.