The Insurance Consumer is Changing - Are You?

Michael Spiar, Broker Relations & Communications Specialist | Ontario Broker

“The last, best experience that anyone has anywhere becomes the minimum expectation for the experience they want everywhere.” - Bridget van Kranlingen, Senior Vice President, IBM Global Industry Platforms

That powerful quote above sums up the opportunity, and challenge, of customer service in today’s insurance world.

For the broker channel, the complexity of data exchange between broker management systems and a universe of different insurance company systems is a fact of life. How can brokers compete with the simplicity of Amazon and Uber offerings?

Will the broker model be upended by new entrants such as Lemonade, an online American platform that offers quote and bind in minutes and can pay a claim in three seconds flat? In short, no.

But there is a lot of work to do. And it begins with understanding today’s consumer.

What Do Consumers Want?

Recent market research shows the following:

  • 90% of consumers want to use messaging (SMS, Facebook, WhatsApp, etc.) to engage with brands. Sixty-six per cent of consumers would prefer to use messaging over any other means.
  • 45% of Canadian consumers want to use electronic proof of auto insurance. Seven per cent already do, even without regulatory approval.
  • Consumer desire for eSignatures is on the rise. Such transactions have increased globally by 53% each year since 2011.
  • Adoption of a mobile device among Canadian consumers has increased from 50% in 2013 to 70% in 2016. Sixty-one per cent of consumers on a mobile device will abandon a non mobile website instantly.

What do these statistics show?

Consumers will almost always do what is easiest, even if they have to pay for it.

Look what happened when Apple had the audacity to launch iTunes in 2001. The online music store sold a product that millions of consumers were downloading for free. Apple reinvented the user experience to make downloading music legally easier, safer and more reliable than doing so illegally. Consumers responded by opening their wallets.

What Is the Ideal Consumer Experience?

Consumers respond emotionally to a sales experience, even when interacting with a website or other piece of technology instead of a human being. Recent Forrester marketing data shows the emotional tone of brand interactions hovers around 60% positive regardless of whether that interaction takes place via self-serve, a live salesperson, an automated phone system or instant chat. The difference is in the execution, or how “robotic” the experience feels.

Consumers often feel most valued, an important emotion in driving loyalty, when the consumer experience is less than 100% automated, Forrester data shows. This fact is apparent when viewing trends in banking transactions. Even though approximately 70% of millennials will use a mobile device for day-to-day banking, over 50% report conducting the same transactions at a branch with a teller as well.

Requiring some form of interaction with a salesperson is an opportunity to ensure that consumer feels valued and understood. What matters is that interacting with a salesperson is easy and convenient, rather than a chore.

Making Sense of It All

Consumers want digital interactions and they value interpersonal ones. They will gravitate towards the easiest, fastest solution. At the same time, they will show loyalty to brands that take the time to understand them during the purchase process. During a recent panel discussion at a 2016 industry convention, one millennial shared her experience of attempting to purchase motorcycle insurance. Among her frustrations:

  • Unfriendly websites
  • Non-mobile websites
  • Quoting engines that wasted her time, forcing her to complete an entire questionnaire before informing her that the broker did not even sell motorcycle insurance
  • Complicated information about seasonal vs. annual coverage and rates
  • Restrictive business hours that made it difficult to contact advisors for advice

This consumer wanted a blend of digital and personal. She wanted to learn about and obtain quotes for insurance on her own, with the flexibility to obtain direct advice when needed. The service she received inspired her to buy an e-bike instead, eliminating the need for coverage in the first place.

The lesson for insurance brokers is not to invest in technology at the expense of a personal interaction, but to innovate and find ways to deliver both in harmony with one another. Always seeking a competitive edge, brokers should strive towards a culture of innovation, unafraid to test new technologies and processes. The opportunity is there. What will our industry do with it?

Next Steps

CSIO provides resources on a variety of consumer-friendly technologies, available to all of our broker members on CSIO.com. Brokers are encouraged to visit the CSIO technology scorecard (www.csio.com/scorecard-tool) to see if they qualify as a “Technology Leader,” joining more than 100 CSIO tech leaders in Canada.