Could The Insurance Industry Be Any Stodgier?

Last year, I wrote about the non-tech barriers that the insurance industry faces with adoption. This year we are back to the tech in the industry and its promises to change this industry to make it more customer centric.

This industry has always been characterised by complex processes, extensive paperwork, and intermediary dependent transactions. My first time filling an insurance form was more of an exam than anything. The vast amount of data required to be provided the complex terms on the form that require further explanation. It is a tiring process. However, technology has slowly been trying to change this nightmare of a process. Change is slow and painful for this sector, but it is at least in motion.

Self-service options for policyholders and a broader customer-centric transformation are vital for the industry to be more connected and closer to its customer base and its potential customer base. The industry has thrived (for lack of a better word) on its reliance on intermediaries, such as brokers and agents, to manage customer relationships and facilitate transactions.

While the above has been somewhat effective and in specific context, it has often led to inefficiencies, higher costs, and a disconnect between insurers and policyholders. This lack of interaction and transparency created a perception of the industry as opaque and cumbersome. We have far too often heard statements such as “my bank,” “my mech,” “my tailor,” “my hospital,” and more. I have no recollection of a moment where the words “my insurer” were used in a conversation.

While we have a few insurance companies embracing technology to allow for some level of self-service engagement, most have fallen short by taking long physical forms with complex information requirements and terms not understood to most attempting to fill the forms. For an effective self service platform, the best approach for the industry is to apply design by subtraction.

Design by subtraction is the process of removing imperfections and extraneous parts to strengthen the core elements. The term was invented by Japanese video game designer Fumito Ueda during the development of his game Ico. This principle would allow for these portals to be easier to use and understand. By embedding this principle into self-services such as policy management, claims filing, and customer support the tedious nature of the interactions are removed. Self service platforms also reduce the administrative burden on insurers, lowering operational costs and freeing up resources for more complex tasks.

Customer centric has been a common term that has been used for over a decade. It is compromised with initiatives such as personalisation, omnichannel engagement, proactive communication and feedback integration.

Unfortunately, most of the focus has been on trying to crack personalisation. The attempts to hack personalisation meets its end now that the industry realises personalisation for every individual is too expensive and the result is building platforms and services that speak to a targeted audience. While this approach is also used in other industries, there is one industry that is capable of personalisation and can teach others how to handle personalisation.

Video games offer some interesting approaches to personalisation that are worth studying to understand. In video games, dynamic difficulty is used to set a balance between fun and challenging for a player. This is achieved by analysing the player’s activities and adjusting constantly. This principle can be applied across a similar wide base of individuals who are customers of the insurance industry to allow for an algorithm to successfully adjust offers, services, interface and more based on the customer’s interactions with service providers.

Omnichannel experience has been comically achieved when you look at some platforms that simply took the traditional manual processes and transferred them onto a screen. The experience after all becomes the same. However, we need to go beyond this joke and push towards seamless experiences on all platforms that are not like learning how to ride the bicycle.

Communication should go beyond offers and statements, find a way to really communicate with the customers of insurance products that is not just marketing and sales. Create awareness in communication, encourage communication to be triggered from either side not just from the industry but from the customers as well.

Feedback on a digital platform should not be confused with the annual survey link shared out. Devices and behaviours on platforms provide a lot of data which is feedback, been able to understand that users visit your service and get stuck on step 3 of 10 is feedback that there is something wrong with step three. Using feedback loops designed in gaming industry allows the industry players to embed feedback loops into the direct use of the application making into an invisible part of the user experience. Each time a platform is used, feedback is received and shared back through positive feedback loops or negative feedback loops.

The insurance industry might just need to use its technology with the aim of making it fun for existing customers and potential new customers. After all, you can learn more in an hour of play than a year of conversation. Maybe this will save industry.