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Customers’ Changing Expectations in the Digital Insurance Age | Episode 9
In today’s digital insurance market, customers’ changing expectations, especially when it comes to buying goods and customer service, are often driven by demographics. Digital-native millennials may have once expected their questions to be answered via a carrier’s website, but are now eager to use chatbots for more immediate responses. And while most baby boomers generally turned to customer service representatives, others now look to personal reviews from friends and family. But all agree that purchasing and customer care must be easy and fast. Listen to our latest episode as host Tony Novielli, Senior Vice President of Sales, North America, chats with Jennifer Smith, Vice President of Life Product Strategy, North America, on customers’ changing expectations in the digital insurance age.
Tony Novielli: Hello, welcome to the Sapiens Insurance 360 podcast. I’m your host, Tony Novielli, Senior Vice President of Sales. And I’m so excited that you’re out there listening. This is where we discuss the latest news, trends, insights, and issues from across the insurance solutions and technology spectrum. Today, we have a very special guest, Jennifer Smith, head of our Sapiens Product Strategy for Life & Annuity Products in North America. Jen has 25+ years of experience implementing front and back office solutions for life insurance providers and transforming the way they do business. The topic we’re going to be talking about today is customers’ changing expectations in the digital insurance age. Welcome to the program, Jen.
Jennifer Smith: Thanks very much, Tony. It’s great to be here.
Tony Novielli: We’ve seen a lot of changes in the world over the last few years, but even more so, post-COVID. One thing that has usually really stood out is that customers now have higher expectations of how they interact with goods and service companies, including insurance carriers. As you know, Jen, life insurance companies are historically late to the game as it relates to change.
Jennifer Smith: Oh, boy, absolutely, Tony. You know, life carriers are, by nature, risk averse. It is the business that they’re in and any kind of new change introduces a pricing change as well to their pricing models. And the issues really are that there are different demographics that have different expectations about how they want to buy products and how they want to be serviced. Believe it or not, it’s not actually digital for everyone and there isn’t a “one size fits all” solution. But there is one thing in common: buying goods and being serviced needs to be easy and it needs to be immediate.
Tony Novielli: Jen, you know, your comment on the “one size fits all” makes so much sense. If you look at our demographics out there today, you’ve got the Silent Gens, you’ve got the baby boomers – by the way I’m in that category — that makes up a substantial portion of the world’s population, especially in the developed nations. And then you’ve got the Gen X and the 30- and 40-year-olds. And then my most favorite, the Gen Ys, the 20-year-olds, which I think now they all call themselves the digital natives, all have different expectations and experience around technology, buying decisions, online shopping, online research. Let’s elaborate on this a little further, Jen.
Jennifer Smith: Yeah, absolutely. You know, we really need to be paying a lot of attention to those Gen Y’s and those Gen X’ers, particularly in the life insurance space, because those are the target groups really that we have. The earlier we educate and get those younger generations into an insurance policy, the better. They’re healthier, they start paying their premiums sooner, and it really makes a lot of sense. And they’re the ones that have that real high expectation of how to do business with these types of companies. You know, they make their buying decisions based on relationships and based on simplicity. They want to make sure that they are serviced, they don’t like being called or having to deal with call centers. They like that self-service enablement and their online shopping experiences that they’ve come to have as a norm, you know, is a little bit different. They shop online for everything just about I mean, really everything. And that’s going to include insurance. They also do a lot of research. And I mean, we can talk about this all day, but there’s just the whole way that they do business is different. And really, those are a target demographic for a lot of life insurance carriers today.
Tony Novielli: You know, Jen, I’m thinking about even the Gen Y’s. How many Gen Y’s like to speak to someone in a contact center? Let me tell you, zero. No one. They rather prefer and feel more comfortable talking to a bot than they would a real live person.
Jennifer Smith: Absolutely. And they’re good at it. They know how to use keywords, so they know how to use online tools like those chatbots. They definitely don’t like talking to people.
Tony Novielli: You know, consumer product companies in particular companies like Amazon and Wayfair, they’ve really set the bar high in terms of customer service. How have these expectations impacted life insurance carriers around how they sell and service other insurance products?
Jennifer Smith: Yeah, absolutely. Great question, Tony, because again, the impact to life insurance carriers really does depend on that demographic of customer. You know, regardless of the demographic, in general, all of those groups that we were earlier talking about expect instant gratification, especially those millennials. They want answers immediately, whether that’s online and through those chatbots we talked about for those younger customers, or by phone for traditionally older customers who still don’t mind talking to those contact centers.
One particular thing that online consumer companies have is those dreaded reviews. Younger demographics absolutely rely on online Google reviews and other write-ups when they’re doing business with companies or making a purchase of some kind. Older generations generally use expert personal reviews, you know, like agents, friends, family. But regardless, we’ve come to expect feedback on things that are important to us since we all have choice. It’s expected that people can learn a lot about what they want, whether they’re looking online, you know, looking. They can see upsells that they could be taking advantage of. They can see extended warranties and learning about people’s experiences. We have that learning gene, all of us, and that quest for information. Recommendations and comparisons are always things that we really want to consider. That instant gratification I talked about again for that younger generation is really key. They want answers to their questions immediately and they want to go online to get those answers. And if they can’t get them, they’re not going to be doing business with that insurance carrier. And if the reviews aren’t good, again, it’s another roadblock.
Once consumers feel comfortable in their research, they’ll either go directly to that insurance company or they’ll go to a family member to understand more and look at how they can engage. Or they’ll go to friends and see how they’ve done it and what they’ve done. And that’s how agents come up as well, and they understand the benefit of an agent. So then once you purchase, one common feature of these companies, those consumer companies, you refer to Amazon and Raytheon and some some common food companies and pizza companies, for example, you know, every step of the way, what’s happening with your purchase. You know, when your order is received, if your package or pizza is being prepared, when the shipping label is created, when it is sent for shipping, and then when it arrives, you get that notification that it arrived along with a picture of exactly where it was placed at your home. This concept is something we’ve been working on here at Sapiens that’s so lacking in the insurance industry, and we try and help carriers make sure that their customers know every step of the way, where their application for life insurance is, what’s been ordered.
As far as other types of evidence and information that’s required, when the results from those requirements come in and then ultimately, when that application has been approved and, you know, all the other things that go along with that process. But it’s not just about that purchase. You know, what about during the life of the policy? Life insurance carriers have a long way to go to keep the lines of communication going with their customers and to make sure that it isn’t just about taking their premiums every month or every year as the case may be. They need to make sure that they’re present in the lives of their customers. They need to do things like recommend healthy living tips, provide them with more information about the insurance policy that they buy. So if it’s a term insurance policy, they need to clearly articulate what a term conversion could mean for that person to a permanent product without medical evidence. And those are really key and important concepts for us in the life insurance industry, but also asking about life events again, clearly, and engaging the customer and understanding why it’s important that if they if they bought a house, or if they’ve gotten married, or having a child, that continued engagement and ongoing engagement is really key and it really helps with the lifetime value of that customer to the insurance carrier. So it’s really a win-win.
Tony Novielli: Jen, let’s talk about that customer lifetime value a bit more. What does that really mean? Every carrier, as you know, either in Life, P&C, Workers’ Comp, is all talking about a 360 view of clients. Can you elaborate further on this?
Jennifer Smith: Yeah, sure, Tony. So in general, Life carriers need to really strive for that full 360-degree view of the customer and fully understand them, understand the products that they have from that insurance carrier, who they are, who their family is, and really understand and know what products make sense for them. You know, we get that with Amazon too, recommendations. You know, is there an upsell opportunity for that customer or are they under-insured? Could their policy lapse for a particular reason related to their employment status? You know, have they had changes in their life that could affect their coverage? Having that continuous engagement and truly understanding that full customer 360 will help us make sure that we can serve that customer better.
The case is, though, most carriers, and Tony, you and I have talked about this, are data-rich and information-poor. Disparate systems, legacy technology, lack of integrations, and a lot of other reasons that insurance carriers are dealing with today, really make it hard for them to truly understand who their customer is, that full 360-degree view, and use that customer data in a useful manner that could really improve that customer lifetime value. The data is out there, but it really just isn’t easy to use or their regulations impacting how and what data can be used for furthering the business process. You know, for example, during the life underwriting process, there’s plenty of ways to collect information on individuals applying for life insurance. We get their credit history, we get background check information, and we get medical information. What we use that for is for risk analysis. But as we’re collecting all that information, there’s other nuggets in there that could help us understand more than just the risk of covering that life insured. But we can learn more about them from a whole, again, that that customer 360-degree view that could go into the CRM. So use of CRM systems to really truly know the client has definitely peaked and it really allows carriers, those insurance providers with the ability to know how each customer is related to them and those other pieces of information that’s important to them to do that better service.
But there’s so much more additional data that we can get access to during the process and during the full, you know, engagement of that life. Obviously, we get a little bit more information in the U.S. than we do in Canada and the Caribbean. But the data is out there, and we need to look at how to use it to benefit that continued engagement with the customer and use more personalization options as well.
Tony Novielli: Personalization and data are also so important. Jen, I know you and I must have talked a lot about this so many times, especially during the claims process. How can carriers view claims differently and change the experience of that claim process based on today’s customer’s expectations?
Jennifer Smith: Oh yeah, for sure. You and I have had this conversation a few times, Tony, so I really don’t think we’ve done enough in this space, for sure. The ability to incorporate those “know your client” principles along with what I call “empathy-based omnichannel experience,” really needs to happen. Some are starting to get there, some insurance carriers, they’re starting to get there. But we have a long way to go. You know, think about it; when someone is filing a life, disability, or critical illness claim, it’s because of a devastating event that’s happened to them or their loved one. Insurance was developed to protect our families and loved ones, in the event that something bad happens and at claim time, it has. We need to make that experience as frictionless as possible out of respect. That is, the whole purpose of life insurance is to be there to protect someone in those bad experiences. Imagine having to find a phone number or paperwork, go to the company website or find out that you have to talk about that loss that you just experienced. You now have to make the call, be told that they’ll email you a form or, God forbid, mail it, and then you need to print it. Who has a printer, Tony, other than you?
Tony Novielli: Great point, Jen, great point!
Jennifer Smith: So they, they then fill that form out, email it back in with signatures, some kind of proof of that claim, whether it’s a death certificate or a doctor, doctor’s information. You know, we have to do better. That digital engagement with intelligent automation that includes language based on logical information being entered can make a huge difference. You know, for example, you know, when you’re filling out that claim, the type of claim can really indicate what that next question from the online digital engagement should be with a comment like, you know, we’re sorry for your loss or, you know, I’m sorry this has happened to you, some kind of engagement that changes the feeling that that user has, or that that person is filing the claim has. And you know what happens when you improve that experience and treat that customer with empathy and respect for what they’re going through? They’ll do more business with you or at least still recommend you to someone else, and they’ll talk about it, how good it made them feel when they went through that unfortunate process that they were going through. And, you know, it also gives the opportunity to retain business from that person as well. In the example of a life insurance claim for, you know, that benefit amount, what would be paid out to that beneficiary could be transferred to another type of product, like an annuity product, so that you can retain that beneficiary business and keep that business in-house. And then you’ve also encouraged that person to talk about that experience to others.
Tony Novielli: Jen, going forward, what are some strategies that insurers can implement for better long-term client relationships?
Jennifer Smith: Well, like I said, it’s all about that digital experience from presale to the acquisition process and then servicing and finally in the claims process. An engaging online presence is absolutely number one, regardless of the demographic. You need to be where all of those different demographics of customer are, whether it’s, you know, having that call center still there for those older customers, but also the younger generation needing to be and see that information online. And don’t forget that agents are customers, too and they span those demographics as well. It’s only common sense that carriers need to do a better job at explaining the need for life insurance to younger, healthier individuals and keep their business. We want to get those younger generations in and protected as soon as we possibly can, so that we can collect that information and keep them protected.
You know, pretty much every life carrier I’ve spoken to in the last year or two, Tony, has asked about how to innovate and disrupt the process of buying life insurance and being serviced. Accelerated underwriting and making that acquisition process as frictionless as possible and as fast as possible by using data to the best of our ability, through things like electronic health records, instead of ordering those very long-awaited APSs that take weeks to receive that can really speed up that turnaround time. And you have fewer withdrawn cases, especially when you’re targeting those younger generations. And that data-driven approach will keep them engaged. That pizza tracker or Amazon order tracker concept we talked about earlier, it can just make a huge difference across all customer demographics, and then add in those other concepts like live chat or chatbot for those that want to engage that way. It really does provide that real and true omnichannel engagement and that continuous engagement, once you get them in the door and you can continue to engage with them in their life events. And I could just talk about that continuous engagement as a whole other separate topic. I can talk about it all day!
Tony Novielli: Thank you, Jen, for providing your thoughts, ideas and insights on this topic that I’m sure we’ll be hearing more about in the months to come. To everyone listening, thank you so much for spending the time with us here today. We love hearing from you. So if you have comments or would like to follow us on social media, please reach out to us on our channels. And don’t forget to subscribe to the podcast and thank you everybody for listening! We got more coming, so be sure to tune in next time on Sapiens Insurance 360. Thank you and have a wonderful day!