Delivering Fair Value in a Digital Insurance Market

The FCA wants insurers and brokers to focus on the needs of their customers and provide fair value. The loyalty penalty is going to vanish next year too which will end price walking. What does the future hold when it comes to customer outcomes, expectations and an increasing variety of on-demand digital insurance products? Tim Hood from Hyland takes a look.

Time runs out to put the customer first

Autumn’s first major storm is about to hit general insurers who have yet to heed the Financial Conduct Authority’s (FCA) call to “adequately and consistently focus on the needs of their customers”. The FCA has signalled its readiness to take action ahead of next month’s introduction of the enhanced product governance rules for general insurers, and the spotlight is set to turn on providers that are still falling short of the regulator’s requirements and expectations.

At the heart of the FCA’s premise is the view that “customers should be able to expect fair value from the financial services products they buy”. However, the FCA’s report last month confirmed that there is “… still a lack of evidence of customer centricity in many firms …”.

Moving beyond one-size-fits all

The issue goes much deeper than mere technical compliance, to what is now arguably the greatest market differentiator — customer experience (CX) — something that two-thirds of UK consumers now say influences their purchasing decisions and more so than price or product specification.

This means ensuring that customers receive not a one-size-fits all service but one tailored to their individual requirements, placing an ever-greater obligation on insurers to put buyers in the driving seat.

Online retailers have already shown the way with their slick, seamless service delivery. This is the template that consumers now expect everyone to follow, but don’t always find. And such is the competitive nature of the marketplace, that if an insurer isn’t providing the service or product expected, consumers simply move to one that does. Given customer inertia, this migration may not happen overnight, but before long the drift away will become evident.

Overcoming the IT challenge

Switching to a truly customer-centric process presents challenges — not least the transition from legacy IT to new technology — but there are several options available to create the frictionless experience consumers want. Not to do so means becoming increasingly uncompetitive against new, emergent disruptors and even established rivals.

Procrastination is not an option. So, where to begin reinventing your business?

The good news is that it doesn’t necessarily mean starting all over, from a technology perspective. By developing a strategy that has content services at its core, it’s possible to bring old and new seamlessly together.

The ambition must be to achieve a high degree of digital transformation, as manual processes are often the weak link that slows down workflows, creates bottlenecks and is a potential point of service dissatisfaction.

Therefore, identify areas where tasks and processes can be automated, so they operate faster, more efficiently and accurately. By removing the human factor, with its potential for error and delay, many activities are already benefiting from technologies, such as robotic process automation (RPA).

Effective information capture

As in all areas of business and commerce, data gathering and analysis will become an increasing priority for insurers. Much of this content will be unstructured, and a mix of information explicitly provided and implicitly gathered. Machine learning-based cognitive capture systems, for instance, can accurately extract and classify data from incoming documents, reducing manual input and data errors that could otherwise delay downstream processes.

Finding ways to capitalise on this wealth of real-time knowledge will be essential for creating a smarter offering that is based not simply on an ‘if this/then that’ approach, but ‘predictive’ personalisation that anticipates customer needs. With eight out of ten consumers saying they are more likely to buy from those providing a personalised experience, this is the way to win hearts.

Information flow

Once gathered, information must be able to flow through the business so that it’s accessible when it’s needed. Silos must come down, preventing employees having to search multiple systems or swap between screens to access databases.

So, having a system in place that gives you a complete, centralised view of customers is essential for creating personalised CX. Choose an open architecture system and you can integrate with 3rd party artificial intelligence and machine learning to create enhanced solutions.

It can also improve efficiency for workforces that have become more dispersed since the pandemic. With 85 per cent of UK workers expecting the ‘new normal’ to involve hybrid working according to ONS data, employers must revise their systems accordingly.

Show you care

Of course, your business will never be able to create a truly integrated end-to-end journey if you don’t understand your customers, the products and services they expect, and how they want to consume them. At a very basic level, this is as simple as ensuring you are ‘mobile friendly’, particularly if you are targeting a younger demographic, while developing quality solutions that solve problems and deliver a higher level of service.

Put all of this together and we’re not talking about merely digitising paper. What’s required is an intelligent, integrated technology platform with content service capabilities, process automation and document management.

Showing customers you really care is no longer a ‘nicety’, but also a key factor in safeguarding compliance and building a successful future business.

Tim Hood is Vice President – EMEA and APAC of Hyland. www.hyland.com

 

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About alastair walker 7108 Articles
20 years experience as a journalist and magazine editor. I'm your contact for press releases, events, news and commercial opportunities at Insurance-Edge.Net

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