Three Ways Insurers Can Enhance Policyholder Value
May 14, 2020 | Sachin Kulkarni
With the Coronavirus contagion spreading across the globe, insurance companies are facing an unprecedented surge in COVID-19-related claims, and in some cases, potential litigation compelling them to cover business interruption losses. As companies strategize and work towards alleviating those challenges, insurance executives need to think ahead for addressing technological and operational improvements. A holistic, enterprise-wide process re-engineering and digital transformation program can help insurance organizations achieve superior business continuity and seamless policyholder experience during future black swan events.
In this blog, we discuss three key areas insurance CXOs must prioritize to strengthen preparedness in the event of enterprise-scale business disruptions.
Boost Engagement With Personalized Interactions
Driving genuine, one-to-one conversations with policyholders in times of crisis builds excellent brand equity. Through proactive hyper-contextualized communications delivered via the policyholders’ preferred channel, insurers can boost client satisfaction and reduce service and transactional friction. If companies wait for their clients to reach out to them with questions around coverages, benefits, and services (especially during a distressing situation), it is likely to result in agitation and back-and-forth communication. Consequently, the insurers’ agents and underwriters could well have to spend valuable time and effort on attending to queries rather than creating policyholder value. Overall, the result is often operational inefficiencies and increased expense factors, all the while hampering the customer experience.
By deploying modern customer communication tools that leverage customer data to drive meaningful digital conversations, insurers can provide real-time, accurate information to their clients. Advances in intelligent automation such as cognitive technologies, machine learning, and natural language processing, and the proliferation of chatbots and virtual assistants make it possible to achieve positive engagement in an accelerated and cost-effective fashion.
Deliver a Superior Claims Experience
The augmented capability to predict claim amounts accurately can have a significant impact on insurers’ financial planning and decision-making processes. The use of machine learning algorithms that discover patterns in policyholder data can bolster claim models, leading to enhanced predictability and better sales decisions. Moreover, when looked at from the policyholder’s perspective, data-driven decision making helps insurers estimate claims cost accurately and set aside appropriate claims reserves and payouts, which ultimately provides confidence for policyholders in hedging the risk of future loss.
On the other hand, emerging business models such as parametric insurance are facilitating a seamless claims journey for policyholders. Such contracts ensure that claims are paid out automatically upon the occurrence of triggering events. For instance, in the case of travel insurance, a claim may be paid out when a flight is canceled or delayed beyond specific pre-defined timeframes. However, enabling automated payouts would require insurers to assess their as-is claims processes and technology and build a forward-looking roadmap to deploy a smart claims management platform. With a responsive, mobile-friendly, and intuitive FNOL application and a robust auto-adjudication engine integrated with rich, third-party data sources, insurers can adopt a digital-first approach to claims management.
Empower Your Workforce With the Right Tools
If insurers are to harness the true potential of digital technologies to drive immersive and productive customer experiences, they need to retool their workforce. Nearly half the current insurance industry workforce is estimated to retire in the coming decade, and only four percent of millennials are interested in an insurance career. In that light, it’s increasingly crucial for insurance organizations to engage their employees and secure innovative ways to retain that human knowledge and experiential learning. Going forward, insurers may have to do more with fewer people, and that requires significant improvements in legacy business processes and the rapid adoption of intelligent automation and smart enterprise systems.
Consider the previously discussed example of claims management. Claims adjusters can augment their capabilities by using drones and virtual inspection methods for remote claim verification. Similarly, by using mobile applications, customers can initiate the first notice of loss, which is pushed to the claims management system without the involvement of an agent talking to a customer over the phone. Not only does the automation lend itself to cost reductions, but it also accelerates the claims lifecycle, delighting policyholders with better responsiveness and care. At the same time, technology can also be especially useful to onboard a millennial workforce to fill up vacancies. The new-age professional is looking to be productive on-the-go and expects a flexible work environment. And increasingly, insurers will have to deploy digital workplace tools to empower a smart remote workforce that is well-equipped to provide service excellence to policyholders.
‘Policy checking’ is another area insurance organizations can look to improve. The Covid-19 pandemic brought to light the need to verify policy coverages and understand their potential exposure to black swan events. However, going through hundreds of policy documents manually is essentially a sub-optimal use of human resources and increases the chances of human error. Insurers will need to look for solutions or approaches that combine elements of machine learning to decrease manual overhead for reviewing coverages and delivering actionable insights for policyholder management.
Sachin Kulkarni is senior vice president and country leader – North America at Xceedance.