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Are You (Digitally) Experienced?

Ok. Boomers, the title of this post is a not-too-subtle nod to Jimi Hendrix, and I will drag him in later.  Before I do, we’ve got to talk about the Digital Customer Experience.  At the end, I do want your thoughts on this.

Can insurance be a digital ‘experience’?

According to my reading of the Capgemini World Insurance Report 2014, the answer is a qualified “yes.” But we might want to be careful what we wish for.

Capgemini  collected data from 15,000 insurance customers, and interviewed 100 insurance executives in insurance markets around the word representing 94% of the global life and non-life insurance market.  The consulting firm developed a Customer Experience Index (CEI) to standardize customer experience.

The survey found that the CEI correlated highly with customer behaviour that leads to higher profitability, such as retention, recommendations to friends, etc.

The news for Canada is good, except ….

Canada came in 5th on a list of 30 countries with 41% of respondents indicating positive customer experience, and only 4% reporting negative experience. Good news.

However, Capgemini raised warning flags over the 55% who had a neutral response, noting that in North America, “twice as many non-life customers with a neutral experience may switch compared to those with positive experiences.”

This warning is underscored by data which show that “a far higher percentage of younger customers (42%) cited the internet-mobile channel as important compared to older customers (23%).”  Capgemini projects that within 3 years, one-third of insurance transactions will occur digitally.

Can changing the process break the neutrality?

There seem to be two approaches to help move consumers away from the mushy middle of neutrality:  Change the process or change the product.  In terms of process, the front end of policy acquisition – quotation –  seems to be a good place to start.

Over the past few years, the Insurance-Canada.ca Technology Awards Jury has seen several approaches to engage the customer in the process.  For example, Cooperators received a finalist award by simplifying their on-line quoting, enabling them to deliver a quote in as little as 30 seconds.  The quote can be saved and additional information can be added to further refine the quote.

What about the product?

For over 30 years working in the industry, I have heard from practitioners that insurance, by it’s nature, is just not interesting to the average consumer.  There are companies taking that to task.

For example, the Mobiliz product from Industrial Alliance and the ingenie product in the UK (recently expanded into Ontario) are telematics enabled products, focused at younger drivers, which use gamificaton to encourage safer driving behaviour.

What about process and product?

A new travel product from Berkshire Hathaway is an example of a new product that comes with a digital process. Berkshire Hathaway Travel Protection covers risks that might have been the liability of airlines, but are now gaps in coverage.  Moreover,  claims are handled in a completely new way.

If you are traveling, and you are stuck on the tarmac for 2 hours or more, a fixed amount of money is automatically deposited to your account.  If you miss a connection, a larger sum is deposited.  This is all without you making a claim, as the insurer follows all of the flights with technology.  Other covereages are available, with highly simplified underwriting and claims processes.

All of this is mobile enabled.  And of course you can download the App for this from Apple Store and Google Play

So, what does this have to do with Jimi Hendrix?

The video for Berkshire Hathaway Travel Protection shows a broken guitar, with a folk rocker (who looks a lot like the writer/victim of “United Breaks Guitars“) capturing the damage with a cell phone picture.

I’m guessing that some of the damage that Hendrix to his guitars would not be covered, but when it comes to defining engagement and innovation, his live music did set a new standard for ‘experience’.  Think about what he could do with mobile?

So what do you think?

What do you think about the digital shift and the ability to create a digital experience around insurance?  Possible, or not likely?  Critical, interesting, or not that important?

What are you doing to digitally engage?

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