In the realm of digital retail, where even groceries can be ordered and delivered online, Trader Joe’s stands out as a unique company. There is no online ordering, no shipping, no delivery, and no plans to change like other grocery stores.
Someone who hasn’t visited Trader Joe’s might then wonder, “How can they buck the trend when Walmart, Whole Foods and Target are fully committed to omni-channel ordering and delivery?”
However, Trader Joe’s has an intangible, powerful formula for loyalty. I should know because that’s where I go for very specific things and love their seasonal items—like all their pumpkin stuff this fall! They have many products that you can̵7;t get anywhere else in the friendliest retail environment on earth. They also have some seriously friendly people who all seem to be genuinely interested in every person that enters the store. Somehow the culture has passed almost all 500+ stores. Regardless of which one you enter, your experience is likely to be the same. A person who loves their job will make you feel glad you came in.
Insurers (fortunately or unfortunately) cannot afford to skip the digital experience. They need to meet prospects and customers at the most likely touchpoints. They must pursue multi-channel experiences with every service they can muster.
But even if digitally ready insurance companies can’t act like Trader Joe’s employees, the idea of kindness isn’t so far off. Can next-level insurance processes and technologies put the “friendly” back into customer-friendly? Can they replicate that caring and welcoming feeling by turning their data and frameworks into tools to know customers? Anticipate their needs? Can insurance companies create touchpoints that have always been a hallmark of the traditional agent or agency?
And can the customer experience transformation be designed to improve loyalty, retention, customer lifetime value and Net Promoter Scores®?
To reach customer expectations with consistency
Technology says a lot about a company. Does an insurer want their customers to do the business’s work? Does it want to facilitate all possible customer interactions? Does it want to meet somewhere in the middle on the bridge to provide service – looking accommodating and offering excellent services, but leaving other experiences and products back in the 2010s? This is what has happened recently in non-life insurance, where many insurance companies have made quotes and purchases easier. In many cases, FNOL has been made simpler. But we still have difficulties like digital payments and dealing with complex damage scenarios like cat incidents or other large losses.
The big news is that insurance companies largely know they need to improve their customer-facing systems, no matter what. In a Majesco-sponsored customer experience report developed by SMA, many gaps were highlighted between the desire for customer experience transformation and fully realizing the vision of “Customer 360.”
“SMA research shows that 94% of commercial lines and 100% of personal lines have a strategic initiative to improve the customer experience. Personal lines are further along in the journey, but they are still at an early stage relative to other industries. Small commercial lines has a large amount of new customer-centric business. 72% of operators serving the small commercial market are in the strategy or early activity phases of their customer-focused initiatives, signaling great opportunity for differentiation.”
The imperative wouldn’t be so strong if it weren’t for the pandemic. The pandemic accelerated the need for change. It widened the gap between customers’ needs and expectations and the capacity of insurance companies. Suddenly, insurance companies were faced with a population increasingly loyal to convenience. Changing customer demographics and the temporary avoidance of brick-and-mortar relationships further accelerated the digital mandate. Insurance companies faced double-digit changes in customer service preferences. Research firms, such as Gartner, put numbers to the theories, such as 44% of millennials prefer no human interaction.
The difficulty lay not so much in the acceleration of change but in the inconsistent application of digital. Insurance companies were not prepared to change all aspects of the service at once. The situation seemed (and may still seem) monumental. Insurers must plan for a unified digital experience across all interactions in the value chain. This may require internal transformation. It may require reaching out from the organization to new ecosystems that enable a broader customer experience. The strategy and methods will vary by insurance company, but the end result should be an organization that is infinitely friendlier and much more ready for the future of insurance.
360-degree view of the customer. What obstacles stand in the way?
When does a transaction officially become an amazing experience? It can be the moment when a customer completes a specific transaction like payment, can do another like updating authorized drivers on a policy and then also gets a copy of their insurance card digitally. They realize it was easier than normal, they didn’t have to go to different portals or apps to do each one, because it accomplished what they needed holistically without the hassle. In today’s world, customers want us to make their lives easier and in this way we become customer friendly.
With that thought in mind, insurance companies need to think in terms of a 360-degree view of the customer. A true 360-degree experience allows customers to meet all their needs in one place (across multiple channels). Instead of having different apps, portals or user interfaces for separate functions, such as quote/sales, invoicing, payments, claims and policy services, the customer should be able to access them all, plus value-added services, from a single customer engagement platform.
The idea of the 360-degree view has been around for many years, but the typical insurance customer experience is still transactional and has not reached its full 360-degree potential. When you look at the structure of the common insurance system, it is easy to see why only the surface has been scratched.
Figure 1: Challenges insurers face for Customer 360
The SMA Customer Experience report identifies six technology-oriented challenges that insurers must overcome before they can deliver on the Customer360 experience:
- Digital transformation
- System integration
- Ecosystem integration
- System design
- Aggregation and Mediation
Technical barriers related to the digital experience
It is easy to provide a list of obstacles, but much more difficult to understand each one in the context of the whole system and its need for transformation. Let’s briefly look at the barriers and touch on its important relationship to providing an excellent customer experience.
Core systems are essential. While they can be supplemented with new, cloud-based core systems or have add-on cloud systems added to the insurance system framework, they need real work and updates to extend their value into the digital realm. Often these systems are so complex that planning around them is a major obstacle.
Customer-oriented data is a major insurance challenge. Insurance companies traditionally have a wealth of data, but the integration into the transactional workflow is not easy. Its ability to be used in real time is a hindrance. The application of analytics to data holds great promise but has not yet reached its full potential. Insurance companies that are well positioned to capture, define, direct, organize and manage data for their customers are well positioned to move towards the customer’s 360-degree vision.
Insurance systems are clutch engines. They must facilitate flow, provide data security, standardize and clean information where appropriate – and they are at their best when easily integrated. Modern system architecture includes features such as APIs, microservices, cloud deployment capabilities, and other methods to ease common integration burdens. Customer service has a major disadvantage when it has to contend with system silos. Transformative integrations can improve everything from back-end to front-end.
The new customer experience represents not only improved transactions but a new set of customers! Ecosystem integration will expand the scope of insurance products to embedded insurance and new channels opened by new partners. How partner-friendly and ecosystem-friendly are yesterday’s insurance frameworks? Tomorrow’s growth will be hampered by a lack of ecosystem readiness. Insurance companies must prepare to provide good service not only to their direct customers but also to their partners’ customers.
Almost any perspective on monolithic systems will give you an understanding of their weaknesses. They are incredibly functional, but their architectures are not built for flexibility or speed. Component-based architectures, including a microservices approach to building and assembling capabilities, result in a more flexible, adaptable system. Modern component designs are better suited to enable faster speed to market for new products, adding partners, adding channels and incorporating today’s advanced technologies.
Aggregation and Mediation
How does it all work together? The consistent customer experience will be tied together in clean, unified approaches to data and communication orchestration. This may be an exercise done to better understand the customer, but in reality all business users will benefit from the effort. It will be easier to report. Product development will be improved. Every area that depends on data will have a renewed ability to see, understand and analyze the business.
Every effort tied to the customer should end with efficiency throughout the company. This is where the promise of insurance culture can pay off. As insurers become excited about the possibilities of customer experience transformation, they will pave the way for their own user experience to improve dramatically. The satisfaction on the inside will show through the experience on the outside.
This customer 360 concept is the foundation of the Majesco Digital Customer360 for P&C solution, an accelerator designed through the lens of the customer to enable simpler and more seamless interactions across service, billing and claims – a deliberate upgrade from the typical transactional experience through separate portals and applications. This new, innovative solution simplifies interactions for customers on a single platform, including policy enquiries, policy changes, payment history, payment updates, FNOL, connection to service providers such as repair networks, claim status, value-added services and integration with core solutions. Majesco Digital Customer360 for P&C provides a next-generation customer experience comparable to today’s leading digital companies in other industries.
In part two of our discussion on customer experience (more on that below), we’ll look at the details. What needs to happen to improve customer capacity in insurance systems and what do the first steps look like? How do we ensure that all the important details are addressed, such as support for advanced data, artificial intelligence and API libraries? Is there a right way and a wrong way to deliver a consistently excellent customer experience?
Until then, take advantage of Majesco’s media opportunities, such as our Thought-Leadership reports (read Core Modernization in the Digital Era) or sign up for one of Majesco’s industry webinars and hear from today’s most sought-after insurance industry analysts.[part two will be…]
Digital Customer Experience: The New Tools of Engagement