Insurance is complicated. It’s underpinned by cumbersome legacy technology, complex paths to market (be it through brokers, private customers or business customers), tight regulations, and a reasonably high customer churn rate.
Although these challenges are present across the industry, some players have been able to tap into the areas that they can control and deliver a service that not only attracts, but retains, customers and key staff. How? By delivering excellent digital customer experiences and empowering engineers who drive these flawless experiences.
I recently co-hosted a roundtable series with FST Media on digital transformations and the digital customer experience within the financial institution sector, and it was fascinating to hear from innovative companies who are challenging the status quo and truly transforming themselves into customer-first organisations through their use of technology.
The following are some of the key takeaways I learned.
1. Covid-19 has forced the sector to adapt its path to the consumer
Covid-19 has caused the disruption of many industries. For insurance, the extra time that customers have in front of their computers has given them the opportunity to shop around for alternatives with ease, resulting in greater customer churn.
Insurers that are putting the tools in the hands of the customer by investing in seamless, self-service digital customer experiences are the ones coming out on top.
A consistent challenge for the industry appears to be the ability to achieve a holistic view of the consumer when considering the different paths to market. Disruption is being caused not because the needs of consumers are changing, but because service delivery needs to change. As a result, businesses who invest in the technology to measure and refine each touchpoint to achieve a holistic view are set to see dividends.
2. Insurers and banks need to stop doing business with themselves
One of the roundtable panellists stated that their path to digital success took off when they ‘stopped doing business with themselves’ and began focusing on the customer. By optimising services to respond to customer queries as quickly as possible, truly focussing on what customers want rather than making blind assumptions and adhering to unnecessary processes, this can be achieved.
This line of thought tends to work against insurance companies as they are typically large, slow-moving enterprises, but as a few of the panellists pointed out, internal processes tend to be given too much value.
To truly get back to the needs of the customers, insurers need to forget how they once did things. They need to streamline processes to make the customer experience as fast and frictionless as possible.
3. Institutions bound to legacy tech can foster innovation through smaller subsidiaries
The concept of creating a small scale subsidiary company isn’t exactly new, but it’s a fantastic way to innovate quickly in large organisations bound to legacy technology. One panellist did just this in an effort to innovate fast without the constraints of the wider business. Their subsidiary company essentially operated as a digital innovation lab, which allowed engineers to experiment, fail fast and create smart solutions. The projects didn’t follow anything that the company was currently working on, and that freedom proved to reap large rewards as many projects born from the lab were later migrated to the core business with great success.
4. Innovation comes from empowered engineers
The reason that subsidiary companies or even digital twins have been so successful is because they empower engineers. They give them the opportunity to innovate, break things, fail fast and recover quickly. While not every business has the luxury of being able to spin up a separate entity, there are other ways that you can empower engineers by giving them freedom to do what they do best: problem solve.
One event attendee stated that their team dedicates one afternoon per week to think about how the business can improve from a tech perspective and create new solutions. This freedom has allowed the team to come up with some really innovative ideas that have greatly benefited the business. Engineers are technologists. They are problem solvers that love to build new solutions.
When engineers take ownership of a project and the tools that they need at their disposal, they feel empowered because they know that their work is having a direct impact.
Admittedly, it can be challenging to convince executives to take a leap of faith in industries such as insurance, which can be so financially risk-averse, but the pay-offs are clearly there.
Sharryn Napier is the Regional Vice President for Australia and New Zealand at New Relic. With over 20 years of experience in the IT industry, she has worked in senior leadership roles at Qlik, Serena Software and CA Technologies.
This article was first published by FSTMedia