Is Technology Changing How Customers and Insurance Advisers Engage?

The pandemic pushed technology to the forefront. 10 years ago, it would be considered a novelty to discuss topics as complex and important as insurance without meeting. But today, insurance agents and their customers interact a lot through digital media. But has this resulted in more efficient processes? Are people more likely to take up an insurance policy now? Or has it taken out the human element from the whole system?

As an example – some research in China

A McKinsey report from China shows a few interesting developments. The survey shared some basic information that we already know, for example, 83% of respondents wanted an insurance agent who empathized with them and saw problems from their perspective. 73% wanted products and services that were personalized and based on their individual needs. But there were also rather revealing statistics. Virtual interactions post-pandemic had skyrocketed, with instant messages, video calls, phone calls, and email the most popular modes of communication. The most interesting statistic would have to be that 69% of the respondents’ said interactions had become more efficient than before.

Does this mean that online interactions are making it easier for customers and insurance agents to communicate more empathetically and understand each other better? Is technology helping insurance agents offer more personalized products to their customers?

As this study was done in China, let’s look at their landscape. The pandemic increased the popularity of the usage of online platforms such as mutual aid. Using this, customers pay a small fee to become a part of a collective insurance service. Chinese insurers have also started adopting blockchain technology which helps in fast information processing. That helps them process claims faster and make quicker payments through their online payments system. The Chinese insurance sector is subject to tighter government oversight and is technologically quite advanced as a result. In fact, the country’s banking and insurance watchdog has stepped in to increase the scrutiny of the country’s technology platforms to curb improper marketing and pricing practices.

But other countries are still more paper-based and although they’ve increased their level of digital engagement due to the pandemic, that itself has been a rushed process.

What About The US?

Experts say that insurance traditionally has lagged in terms of adopting technology compared to other industries. But since the pandemic and the subsequently increased focus on health, cutting costs, and working from home – the industry has had to adopt technology – and quickly.

Insurance companies are digitizing their processes and trying to focus more than ever on the customer. Luckily, many entities have shown that adopting technology has benefits. In one instance, an insurance company settled a claim in just three seconds!

How Is Technology Changing Customer Engagement?

  • Today’s client expects a certain level of flexibility in terms of timings and location. Using digital platforms allows this, as clients and advisors can interact remotely. This helps advisors communicate with clients no matter where they are. That has helped them prospect new clients, and maintain ongoing client relations with more ease. What a time saver!
  • Technology also helps insurance advisors manage their data better. It helps them review their policy performance easily, lets them make policy changes digitally, and allows them to incorporate data into the financial tools and models they’re using. All these changes can be shared in real-time with their clients irrespective of where they are. That enhances communication and creates an efficient way to share data.
  • Tech also enables advisors to work with a larger demographic of customers. As they’re saving time and energy that would otherwise be spent on traveling, they can reach out to more people. That also helps advisors protect more people from unexpected losses, closes the protection gap between different demographics, and more.

The Future of Tech in Insurance

Technology in insurance may be here to stay. A study shows that insurance companies plan on investing more in technology in the coming year. 96% of the respondents said that they will accelerate their digital transformation initiatives. Companies hope to support their financial and operational stability both using new technology. 70% intend to enhance efficiency with technology, and 68% say they’ll use technology to improve customer experience. 68% of those surveyed plan on increasing their spending on data analytics tools and 66% will allocate more to upgrade their customer relationship management software.

But It’s Not as Good as A Personal Touch

While the numbers are pointing towards a more digitalized future, this can never truly replace a human touch to the entire process. Many times, policyholders are confused about policy details and may not always have the time or knowledge to understand exactly what the cover provides. A human connection is needed to navigate such issues. Handling claims is also a tricky area, frequently one that requires a great deal of sensitivity and support. That kind of connection can only be fostered when people are physically present with each other. After all, around 70% to 93% of communication is nonverbal. It’s tough to pick up on body language through a screen.

Therefore, technological advancements can only enhance the work of agents and advisors. It will help create better human interactions by using data analytics and other functions. So, we can say that yes – technology is changing the way customers and insurance advisors engage with each other. But it’s enhancing communications, as opposed to replacing the old ways of doing business. And at the end of the day, clients want an experienced and empathetic person sitting across them to genuinely understand where they’re coming from.