To be truly digital, an insurer must offer a full interactive online service, Underwriters Clinic hears

With the digital revolution moving so quickly, it is often difficult to define exactly what it means to be a digital insurer in the modern world.

But that was the first topic of conversation for delegates at the recent Insurance Times Underwriters Clinic at the City of London Club, and it sparked some lively debate.

QBE underwriting manager Martyn Hall said that to be considered a digital insurer, companies needed to provide a customer journey that was fully online and interactive.

“[The customer journey] should start and finish online,” he said. “Ideally it should be light to no-touch, but that doesn’t mean we wouldn’t
have an underwriter look at certain risks that go through the system.”

Platform struggle

Delegates said that digital had moved on from just being a desktop or laptop solution, and now incorporated other platforms such as mobile and tablet.

But with so many digital options available in the market, it can be challenging to know which one is best suited to the customer. Guidewire product marketing manager Europe, Middle East and Africa Mark Mullin said this was a problem for insurers.

“Insurance is becoming much more granular and customised by how the customer expects to be engaged with by the insurer,” he said.

“For those insurers we have spoken to the struggle is deciding what platforms are needed to provide that model and the struggle to actually do it.

“Older technology platforms and older business process models do not work very well with this new expectation [of increased engagement from the insurer or broker].”

Hiscox senior development underwriter Liam Barry said it was also important to provide different options for consumers so they can use the channel most appropriate for their needs.

“When we look at our offerings, especially if we choose to invest in digital options, the point at which we encourage the customer [to do more digitally], we have to be wary of that,” he said.

“A small IT consultant is going to want to buy a policy on an iPad on the train. A surveyor who has been on my books for 30 years is probably going to want to purchase his insurance quite differently.”

Digital is must-have

But with a growing number of customers demanding so much more from their insurers, a specialised digital offering is now a must-have rather than a differentiator of service.

Guidewire account executive Nick Lester said: “Different segments of customers are all demanding slightly different things.”

As well as providing an improved service for policyholders and potential customers, embracing emerging technology can also help insurers drive down costs.

Ageas programme director Tim Marlow says: “Fifteen years ago, a significant proportion of people telephoning the claims department were asking: ‘What is happening with my claim?’

“If you can put a simple claims status online it removes a great deal of that and therefore drives cost reduction.”

Don’t lose the expertise

Gresham Underwriting chief underwriting officer Tony Collman warned, however, that taking too much of the customer journey online makes it more difficult to comply with regulatory requirements.

“You have to be careful you don’t cut the expertise out of the process,” he said. “The more you become digital and go online, Treating Customers Fairly becomes more of a factor. You have to be aware of who is asking what question and how.”

Online chat was one technology highlighted as having the capability to offer an online journey while still providing a personal touch.

Collman said this enabled insurers to make the most of the digital world while still treating customers as individuals.

“Online chat is like a sales person ringing you as you go through the transaction,” he said. “This means that if you have a question at the back of your mind you are more likely to ask [the online chat function] than call up.

“The chat box can have a name and a picture of the person talking to the customer and that personalises the experience.”

But with so many options out there to choose from, it is often risky to put up the investment needed to implement a digitally led customer experience.

A holistic viewpoint

QBE European Operations property and packages SME underwriter Karneet Chowdhury said a focused investment strategy was the key to a project’s success.

“You can’t just jump half-way down the cliff,” he said. “You invest in it and you look at it as a whole strategic investment and say this is what we want to get out of it.

“We want to reach our customers, get more data out and provide fulfilment and then you take all those things and do it all from a holistic viewpoint rather than a bit here and then next year add another piece.”

Mullin said that to ensure the investment got the best results, insurers and brokers needed to change the whole way they do business, and not just adapt existing technology.

“Add-ons and sticking [new functionality onto an existing system] was how a lot of insurers dealt with this in the early days, but that is no longer sufficient,” he said.

“If you are going to be strategic and do the things that you need to do to engage with the consumers, that just won’t work anymore.

“It is literally taking the business and moving it to a new paradigm. It is not just technology, it is the whole business - it requires a different way of thinking and a different operational model.”

Don’t get left behind

Despite the risks and difficulties involved in introducing new technology, delegates all agreed that brokers who did not have a digital solution would be left behind by their competitors.

“We do deal with the smaller brokers who just want to transact locally and don’t use much e-trading, but they just tick along and maybe shrink a little,” Collman said. “They definitely don’t grow.

“The biggest growth we have had is from a client who has been focused on e-trading and sheer volume.”

So while the challenges of keeping pace will be demanding, the industry must make sure they are in a position to adapt and offer consumers what they are asking for.

Otherwise they run the real risk of being left behind in a constantly evolving digital world where playing catch-up is time-consuming and costly.

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