How the 'Amazon Effect' is Infiltrating the Insurance World
The rumors continue to swirl about Amazon’s entry into the insurance space. Its first step appears to be developing a UK-focused insurance comparison site, according to Reuters. Given Amazon’s deep capabilities as a marketplace, and its consumer reach, such a move is a reminder that even the insurance sector is not immune to the power of the Amazon effect. Amazon is already in the home with Alexa and top of mind with Prime, so it’s a natural extension of its reach designed to benefit consumers. A few years ago, Google similarly tested an insurance comparison site that failed. Perhaps Amazon will be more successful than Google in the coming months.
Now is the time for insurance companies to bring technology to the forefront of its consumer-facing operations. Amazon has set a new bar for customer experience, providing instant gratification in one-click, with highly integrated experiences across desktop, mobile, home devices, and TV. Today’s consumers have higher expectations than ever before, and insurance companies are no exception. In fact, in a 2018 survey, Medallia asked consumers if they’d consider purchasing insurance from Amazon in a hypothetical scenario. More than half of satisfied customers under the age of 45 said that they would consider buying insurance from Amazon.
Now is the time for insurance companies to bring technology to the forefront of its consumer-facing operations
The race is on, particularly to secure the loyalty and win the confidence of the younger generations. Insurance companies must innovate in order to meet the expectations of these tech-savvy customers who expect insurers to listen, acknowledge the feedback, and take immediate action through effective two-way communication. According to the same 2018 Medallia survey, consumers who strongly agree that their insurer takes action when customer issues arise are 3.5 times more likely to trust the company than those who strongly disagree.
In addition to recognizing the threat of Amazon, today’s insurance companies are also competing with new start-ups that are born of the digital age and unencumbered by legacy systems. Displacing industry incumbents is far from easy, but new players such as Hippo and Lemonade have proven, through significant traction, that the historically high barriers to entry simply no longer exist in insurance. Skill and experience based underwriting is being replaced with machine driven algorithms, big budget marketing campaigns are being substituted with viral social content, and capital burdens are being shifted to reinsurers who have an endless appetite for putting cheap money to work. According to Danielle Cripps, Insurance Analyst at GlobalData, “Alternative providers are highly influential brands, have masses of consumer data and resources, and are known for providing exceptional customer experiences – all of which makes them a significant threat to the insurance industry.”
The solution is simple. In today’s highly competitive landscape, insurance providers must lean into one of their few remaining differentiators, their size, to create a dialogue with consumers, capture insights at scale, and take swift action to make systemic improvements or risk losing customers.
1. Capture the voice of the customer
Customers are providing feedback through a variety of channels, on social media, through solicited surveys, via call center comments, through third party insurance agents, but so often this real-world feedback is lost in a black hole. Most insurers lack the technology required to connect the dots and understand the voice of the customer at scale. Consumers are sharing their feedback more than ever before and insurers need to be paying attention to what they are saying. Without a clear mechanism for capturing the voice of the customer, on the channels that they use most, insurance companies are left to guesswork on their biggest investment decisions, without clear direction from consumers.
2. Cut through the clutter to find the insights that matter most
In order to find the insights that matter most, insurers must cut through the clutter. Customers broadcast valuable feedback through dozens of channels. The problem is, much of this feedback is unstructured, disorganized, and hard to analyze at scale. Insurers need to start harnessing technology to process this massive amount of customer feedback and transform text from billions of surveys, social media reactions, reviews, emails, agent notes, and more into actionable insights widely accessible across an organization.
3. Harness the power of your employees
Every employee’s job is in some way connected to delivering value to an insurance company’s customers, which is why every employee in the company needs a real-time view of customer sentiment. The CEO ought to have a true pulse of customer feedback and not be relying on one-off anecdotes or examples that serve only to support the status quo or support certain agendas within the company. With modern advancements in machine learning and artificial intelligence, it’s standard practice to apply natural language processing on millions of pieces of customer data in order to understand and prioritize customer insights. In addition, these insights must be shared throughout the entire organization from the executive level down through agents, claims adjusters, digital teams, and call center representatives. The more that employees at all levels know about what the customer wants, the better equipped they are to give it to them.
Insurers who are able to successfully incorporate and share customer feedback throughout the entire organization to become more customer-centric achieve profound results. Farmers Insurance is just one example of a company that increased customer retention, improved customer satisfaction, and reduced customer complaints, yielding a positive impact of $500M in annual revenue through their renewed commitment to the customer experience.
The Rise of Banking Biometrics
Banking Compliance, Risk, and Regulatory Requirements: Playbook for the Attacker
By James Seevers, CIO & GM, Toyoda Gosei
By Bill Krivoshik, SVP & CIO, Time Warner Inc.
By Gregory Morrison, SVP & CIO, Cox Enterprises
By Alberto Ruocco, CIO, American Electric Power
By Bruce. D. Smith, SVP & CIO, Information Systems, Advocate...
By Adrian Mebane, VP-Global Ethics & Compliance, The Hershey...
By Graham Welch, Director-Cisco Security, Cisco
By Michael Watkins, Senior Product Director, Global Knowledge
By Bernd Schlotter, President of Services, Unify
By Patrick Hale, CIO, VITAS Healthcare
By Steve Bein, VP-GIS, Michael Baker International
By Jason Alan Snyder, CTO, Momentum Worldwide
By Mike Morris, CIO, Legends
By Louis Carr, Jr., CIO, Clark County
By Bill Dow, SVP and General Manager of Business Solutions,...
By Jim Whitehurst, CEO, Red Hat
By Darren Cockrel, CIO, Coyote Logistics, a UPS Company...
By Nathan Johnson, SVP and CIO, Werner Enterprises [NASDAQ:...
By David Tamayo, CIO, DCS Corporation
By Neil Hampshire, CIO, ModusLink Global Solutions, Inc....