Policyholders turn to digital channels to make informed insurance purchase decisions

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It has never been more critical for insurers to engage and drive meaningful connections with customers – particularly now as individuals seek to understand their coverage better, free up money, and address risks. “Digitally educate, convert and retain” seems to be the mantra for success these days.

The way consumers shop for insurance has evolved, and over the past few months has begun to change even more swiftly. The new generation of policyholders has a already demonstrated a distinct preference for “anywhere”, “anytime” convenience. With the recent COVID-19 shelter-at-home mandates, others are being forced to adopt digital channels for their policy servicing needs around coverage changes and payments. Further, when it comes to buying or renewal related comparison shopping, more and more customers give credence to product reviews and recommendations accessed via their social media networks.

What does it all mean? Simply stated, it has never been more critical for insurers to engage and drive meaningful connections with customers – particularly now as individuals seek to understand their coverage better, free up money, and address risks. “Digitally educate, convert and retain” seems to be the mantra for success these days.

Increasingly, customers turn to digital channels to both shop for and research products and services. More than two-thirds of US shoppers have purchased an item online, according to a 2018 poll, and a 2019 survey found that more than 70% of internet users in the European Union are online shoppers.

Online shopping is not merely limited to e-retailers, such as Amazon, Alibaba, or Walmart. For millennials and Gen Z, Instagram and Snapchat are the most preferred shopping channels, while 34% of Gen X and 25% of baby boomers shop on Facebook.

Therefore, it is only natural that consumers apply their online shopping and browsing habits to insurance.

Who doesn’t like convenience and flexibility?

The popularity of digital channels for shopping did not happen overnight. Busy consumers appreciate the convenience and flexibility of the virtual marketplace, as well as 24/7 access to a broad set of options and alternatives. Tech giants have raised the expectations bar and earned consumer trust by making convenience, experience, and personalization a top priority. So it is not surprising that today’s policyholders seek frictionless experiences that display seamlessly across devices and don’t miss a beat when it comes to remembering each previous activity.

Experience-led shopping emphasizes the importance of social media and peer reviews – the online version of a phone-a-friend lifeline for consumers. Therefore, as shoppers actively study reviews and recommendations from their network before making a buying decision, the use of peer-to-peer platforms that allow integrated and seamless information sharing (think Instagram, Facebook, TripAdvisor, and Yelp) is at an all-time high.

It’s time for insurer realignment

Policyholders’ digital and review-seeking behavior is a compelling catalyst for insurers to rethink and better align their channels to reach out to and make customer experience a primary focus.

One way is to empower traditional agent/brokers channels with digital tools that allow them to offer relevant advice and meaningful connection that address customers’ review-seeking mindset. Strategic firms work to meet policyholders at every touchpoint. This is especially critical considering the new-normal environment created by the COVID-19 pandemic.

India-based Bajaj Allianz Life Insurance extended digital touchpoints so that customers can access or manage policies, pay premiums, or request support. The firm has retrained its sales staff to use virtual tools to connect with customers and offer advice.

The best digital interactions provide a guided experience and simplify the user journey. Technologies such as artificial intelligence (AI) and natural language processing (NLP) can help insurers personalize interactions and include elements of emotional connection.

A US-based provider of automotive, business, homeowner’s, and farm & ranch insurance, State Auto collaborated with Flyreel, a Colorado InsurTech, to offer an AI-guided self-service option that allows policyholders to use a mobile phone app to quickly document property data, features, contents, and policy-worthy details. The technology enables State Auto to personalize self-inspections at scale and to capture real-time data intelligence and comprehensive baseline property records.

Customers active on social media are often not shy about sharing experiences, so insurers must become socially savvy to maintain and enhance their online reputation. Managing the claims experience as the “moment-of-truth” is even more important now in the “tweet” economy. Engaging with customers on social media and using it as a social listening tool will enable insurers to gain more insights as well as shape their brand.

And as the pandemic crisis eases, insurers have a real opportunity to re-imagine products to address coverage gaps and accelerate digital transformation to have the platform, technology, and skills for facing future crises effectively.

Launching May 14, the World Insurance Report 2020 takes a close-up look at consumers’ general and insurance-specific shopping behavior. It is a must-read for firms seeking to create experience-led customer engagement. Register in advance for your copy at www.worldinsurancereport.com.

Don’t hesitate to connect with me on social media to discuss details about experience-led policyholder engagement and future-proofing in a post-pandemic world.

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