InsurTech leaders speaking at the InsureTech Connect Conference in October had a message for traditional insurers they have probably heard before: The language that insurance agents and carriers use is creating a gulf between insurers and customers who struggle with an already complicated topic.
Put bluntly, entrepreneur Guy Goldstein, CEO of small commercial insurance provider Next Insurance, thinks customers don’t understand what the industry is talking about much of the time. Next is personalizing the experience so that small businesses get insurance that not only covers their specific risks but also comes in the language of their business. He maintains businesses understand insurance for restaurants and insurance for yoga instructors and insurance for dentists but do not relate to insurance for inland marine or directors and officers or employer liability.
Ayan Sarkar, vice president, Digital at insurance technology firm Guidewire, agreed that it’s time to pivot to speaking about classes of business. He added that this takes a lot of technology but the industry is moving in that direction.
Another entrepreneur, Rusty Sproat, founder of Figo Pet Insurance, thinks the less said about insurance the better. “If you can sell insurance and not talk about insurance, it’s a win-win,” Sproat said. So his consumer site for pet owners spends more space and effort giving members tips on how to manage their pets and only has the minimum insurance documents and language.
Want Fries With That Policy?
In some cases, customers may want or come to expect complementary products, even non-insurance products. AIG Personal Insurance CEO Gaurav Garg has experience with adding value in risk management, for example, wine or art restoration for high-end clients. “Focus on how to keep the customer safe,” he said.
Jamie Hale, CEO of digital life insurer Ladder, said that what is value-added may be different for different customers.
Mariel Devesa, Farmers Insurance head of Corporate Development and Innovation, can see how payroll services and benefits may be what some customers want. But what is really important is adding personalized value and creating more touchpoints, she said.
Telisa Yancy, chief marketing officer, American Family, highlighted what could be the ultimate in creating consumer touchpoints: her company’s arrangement with home security system Ring.com. She said this hi-tech home protection, crime prevention service is “unlike a lot of InsurTech that comes with a ‘set-it-and-forget-it’ attitude, which doesn’t help you with brand building, nor does it help you with being an indispensable part of the customer’s life.”
Dustin Yoder, CEO of Sureify, the developer of a digital customer engagement technology platform for life insurers, offered a caution: Not all add-on products are cost-effective to add.
They all agreed that if an insurer outsources any parts of its operation, it is important to seek out “best-in-class” third parties for those services and pay attention to security issues. Ladder’s Hale was more cautious about outsourcing, contending that creating a “seamless brand experience” is difficult with legacy systems and that some external parts can’t be easily assimilated or strung together.
Next to What?
Goldstein didn’t just talk about language problems. He is really down on the entire current experience of small commercial insurance buyers.
“It’s bad from the customer experience. Insurance customer service isn’t very good,” he said, adding that he doesn’t think the industry knows how really bad it is.
Goldstein said the experience his company gives customers is “very different” from what they are accustomed to from the insurance industry.
But when Next and others say the insurance buying experience is bad, what are they comparing it to? Next to dealing with a cable or Internet provider? Next to dealing with a building contractor? a software vendor? a supplier, lawyer, accountant, lender or banker? Or is it all about comparing every buying experience to Amazon?
Next caters to its targeted segment for whom the ideal experience appears to emphasize self-service. A recent J.D. Power survey found that while overall customer satisfaction in the small commercial insurance market has increased to an all-time high, the group least satisfied is smaller businesses (five-10 employees), and the smallest businesses (fewer than five employees).
Overall small businesses are split evenly between preferring agent in-person/phone (61 percent) contact and website (57 percent). Perhaps more interesting is that their preference for self-service has grown by 28 percent since 2015 (61 percent in 2017 vs. 48 percent in 2015), and continues to outpace actual usage of self-service (43 percent) by a significant margin.
Micro businesses have the greatest disparity between preference and usage; their preference for self-service is nearly twice the rate of their actual usage (60 percent vs. 36 percent, respectively).
Next not only tries to speak the language of its small business customers and tailor coverages to their businesses, but also gives them self-service tools to make simple changes including cancelling a policy instantly with no penalty fees, adding an additional insured with the click of a button, and immediately generating proof of insurance. A satisfied customer is a self-service customer.