Digital insurance is gaining traction with insurers and distributors alike. However, the efficacy of digital continues to be an open question. Is this a problem with the technology or is something else in play? We’ll supply some examples and put forward a few thoughts. We’d be interested in your approaches.
We’ve seen this before …
Back in the mid 1990s, we encountered a similar conundrum with the explosion of the commercial Internet. The interconnection of usable technologies clearly made a difference within organizations in improving turnaround and lowering communication costs. However, realizing success in engaging customers and improving profitability was tenuous at best.
We came up with a slogan that helped us focus: “Technology enables; content rules.” This put the onus on all managers to measure results, not activities. Unfortunately, a number of immediate priorities emerged in the last few years of the last century (remember the Y2K Bug?) which put many large-scale Internet projects on hold.
However, we see similar approaches emerging with digital insurance. Here are a few examples.
Pole-Vaulting the 10-Metre Referral Wall
Back when I started in insurance, seeking referrals from satisfied clients was a mandatory part of the sales function. However, some place along the way, the will of the producer weakened and now it seems to be a shiny artifact of the past.
In a recent article in Canadian Underwriter, it seems that Tom Reikman, Chief Distribution Officer at Economical Insurance, has kept the playbook open on his desk.
Reikman is straightforward: “Brokers seeking new business shouldn’t be shy about asking clients for referrals”.
And he offers a social media variation on the process. If the client is conversant with Facebook, the broker could ask for posting to 30 of the client’s friends and neighbours.
But this comes with a caveat: Reichman emphasizes that the broker helps the client stay within proper social guidelines:
“…if you are going to play in that space, you also have to be resourced to play that space. You can’t respond three days later to somebody when they fire out a Twitter comment or ask something on Facebook. You want people to know you got right back to them.”
Test Test Test
Want to get a little more formal? As my old stats prof would say, “I gotta chi-square, you gotta get a chi-square!”
To improve customer experience and maximize the money spend on customer acquisition, Andrew Lo, President and CEO of Kanetix Ltd., has been leading his organization to implement a highly sophisticated conversion rate optimization program.
Tests are run weekly on most of the customer base. The results were a lift of 37% in conversion from completed quoted to connected leads. Kanetix continues to tweak results to get finer results.
Broker reality …
Most brokers aren’t at the place to bring statisticians in, but measuring results and refining prospecting is definitely a direction. So we need to start somewhere.
Early in March, Neil Huzinga posted in this space with the title “How Failure Generates Success.”
Huzinga was at an insurance conference and was a bit surprised that attendees on stage who were very successful, “referred to the numerous occasions on which they had failed, and the high ratio of failure to success when venturing something new.”
Huzinga came to a realization that encompasses what’s necessary for brokers:
“You don’t have to be radical, but why don’t you try something new? Give your customers something they’ve never experienced from brokers before. That could be as simple as reaching out to them at a time other than when you’re asking them for money.”
Back to the future…
We are definitely on an upswing with new technologies, and with the tools to measure and optimize results. However, the genesis for new ideas will continue to come from carbon-based life forms.
If you have embarked on disciplined prospecting utilizing statistics, we’d be interested in your results. Push the ‘Leave content’ link just below.
Editor’s Note: If you are interested in a deeper dive into statistical technology in action, you might find AI: The Foundation of Next-Gen Insurance, to be of interest. This half day session, being held in Toronto on 30 May 2018, will focus on the use of artificial intelligence to improve insights into the customer base.