Customer Connections

Fourth Annual Executive Forum

 

Some young insurance buyers are not sure what coverages may be relevant to them, suggested a speaker at the Executive Forum in Toronto on August 30, while a former Manulife official emphasized that getting a solution up and running now is more important than a slick front-end.

COVERAGE OPTIONS

Consumers, especially young people buying homes for the first time, are struggling to understand industry jargon, particularly terms and conditions of policies, suggested Daniel Shum, Deloitte’s national insurance sector leader, at the recent Executive Forum.

Last year, Deloitte conducted a study in which people between the ages of 25 and 40 were interviewed, Shum told attendees at the fourth annual Executive Forum, held August 30 at the Sheraton Centre in Toronto.

First-time home buyers “are under a great deal of pressure and they are faced with this jargon that they didn’t understand as first-time home buyers, first-time buyers of insurance,” he reported. “So they are looking for someone to interpret that jargon or to speak in plain English to them.”

Shum, a partner in Deloitte’s financial services practice, showed videos of some of those interviews during the forum, produced by Insurance-Canada.ca Inc.

Deloitte asked survey participants “three broad questions,” he said. “What are your thoughts on insurance? How would you like your insurer to engage with you? What would you like from your insurer?”

Some respondents were “unsure of what products and services may be relevant to them,” Shum said, noting that several questions came to respondents’ minds. “‘What makes sense to me? What coverage makes sense to have?’ They weren’t sure of that. They weren’t able to easily find and compare different coverage options.”

But amid these concerns, Shum suggested there is some good news.

“Many insurers are now addressing these [issues] and there are some emerging offerings in the marketplace that are very recent that really address a lot of these issues,” he reported.

In its survey, Deloitte found some respondents were taken aback at some of the underwriting questions asked during the process of applying for insurance.

“When it came to the buy process, what we heard was, ‘Why do you have to ask me all these questions?'” Shum said. “As industry professionals, we all know why we have to ask those questions. It is important to them because it allows us to provide coverage, but they don’t understand why those questions have to be asked.”

New technologies are “disrupting the industry,” Shum noted during his presentation.

“We are seeing what we are calling a perfect storm,” he added. “Market forces that are shaping the industry over the next decade. Some of these forces will include consumers that are becoming more knowledgeable and more demanding, largely due to the availability of information at their fingertips.”

CUSTOMER DATA

Some insurers have less data pertaining to risk – on their own insureds – than other organizations, suggested Mike Key, vice president of business development, global core insurance for software vendor SAP SE.

Historically, insurance companies have been operating in silos, with walls between “the life or the health or the property and casualty or the commercial institutions,” Key said during his presentation, Preparing Insurers for the Digital Century.

“We’re talking about slivers, we’re talking about services and product capabilities in a very agile fashion,” Key said of the future. “We’re talking about partnerships with multiple channels that have information about our insureds.”

He delivered his presentation August 30 at the fourth annual Executive Forum.

The overall theme of the event – produced by Insurance-Canada.ca Inc. and held at the Sheraton Centre – was Turning Insurance Outside-In.

“We have car companies that have more information about our insureds, we have commercial entities that have more information about our commercial coverages than we do,” warned Key. “We have health care companies that have more information about our insureds than some of our health insurers.”

Furthermore, the insurance companies themselves, “because of social third-party and available Internet of Things information, have that information about those insureds as well, to be able to drive our particular operations,” he reported.

“We really believe there’s going to be more change in the next 10 years than there have been in the last 30 years or even in the last 300 years,” added Key.

An industry that was centered on compensating someone for financial loss is dramatically changing, he suggested to forum attendees.

“We see the fundamental change in insurance moving from compensation for a final loss to having the information and the technology to be able to reduce the severity of that loss or to be able to prevent the loss itself,” Key reported.

Three reasons driving the change are that more information is available than ever before, more technology is available and “there are competitors that have greater access to that information than sometimes insurance companies.”

In addition, insurance providers, “because of social third-party and available Internet of Things information, have that information about those insureds as well, to be able to drive our particular operations,” he said.

“Collaboration, cross-industry collaboration, we think is absolutely key,” he emphasized to attendees. “We see having information, working with the car companies, working with the commercial entities, working with the health side of the business in order to be able to get that information is very, very key and vital to that digital environment of the future,” Key emphasized.

“What customers can have today and what you can have today as an insurance industry is that customer-centric environment,” he pointed out. “We think the customer is the centre of all future interactions, not the product. We think that services should be made available for the product capabilities,” he added.

“When you’ve got the information and technology to be able to shape that, to be able to underwrite it, to be able to find products, to be able to rate the risk associated with that loss in real time or that insurable entity in real time, that dramatically changes things,” Key said.

SPEED TRUMPS SHINY FRONT-END

Insurance providers who want to use technology to connect with customers need to move quickly, a speaker suggested at the recent Executive Forum.

“We are trying to create a digital experience, a digital dialogue, a digital relationship with our customers, and the key to it is the pace at which you do that, and how fast you can do it and the level of quality at which you do it,” noted Joseph Cooper, a global technology executive and former executive vice president, global services and chief information officer at Manulife Financial.

Cooper delivered his presentation –Defining and Operationalizing an Effective Digital Strategy – August 30 at the Sheraton Centre in Toronto.

“Speed, I can tell you, is the Number 1 item,” he said of technology services. “If you have great quality [but] you are there third, fourth or fifth, you are not going to be as effective at competing in the industry. If you are there first and you have a high-quality experience for your customers, that’s where the winning formula is.”

Cooper told attendees that 50% of Internet traffic is “driven” from mobile devices, while two-thirds of Canadians own smartphones.

“You think your data management capabilities are important today? They are going to be absolutely critical in how you manage the data flow in and around your business in the future because of the vast volumes you are going to be having,” Cooper added at Executive Forum.

“To create a solid customer experience, it’s not about having a shiny front-end,” Cooper contended.

“Surveys will show you that your best promoting customers will be the ones who experience your organization digitally in a very fluid and seamless manner. That puts pressure on having not only a very neat front-end, but a very robust and flexible back-end, and we all know being in this industry that has been the panacea for many years, but it is an absolute requirement,” he added.

FUNDAMENTAL CHANGE

Workers of the future will expect the information technology systems at work to be up to the same standard as their consumer devices, a speaker at the recent Executive Forum suggested.

By 2025, 75% of the workforce is going to be digital natives, some of whom are now in their 30s, said Avi Greenfield, senior manager of product strategy for OpenText Exstream.

“They know from their tablets and their smartphones,” Greenfield said of some workers. “They don’t make the distinction between the technology that they use in their home lives and what they use at work,” he pointed out.

Citing a Foresters survey from last year, Greenfield noted 89% of polled organizations identified digital transformation as a top priority for their companies.

“This isn’t putting up a new website or upgrading a CRM (customer relationship management) system,” he said. “This is a fundamental change in the way that carriers do business. This is a fundamental change in business models and the way that organizations need to interact with and really engage the new style of consumers and these new technologies.”

Many of his company’s customers are evolving to more of a cross-channel method – where multiple communications come from a single source of content that’s channel-agnostic and presented appropriately for the channel engagement, he said. Ultimately, the goal is to provide an omni-channel experience.

“You want to enable consumers to pick up a transaction – start it in one channel and seamlessly pick it up in another channel as appropriate,” he said.

A key area, Greenfield suggested to the attendees, is content management.

“Having shared content between those channels is really essential in terms of providing a consistent experience, but it also takes your rethinking of that content into a context that is much more customer-aware,” Greenfield said.

It really means rewriting content so it is in plain language and more easily understood, he noted. “That has a real impact on customer experience.”

As well, Greenfield added, having options for multiple delivery methods that are preferred by customers will further contribute to “having a very impactful customer experience.”

RELEVANCE OF GEEKS

Traditional insurance companies are “responding more slowly to the changing customer expectations and we are encumbered to some extent by legacy technology,” suggested Ben Isotta-Riches, chief information officer of Aviva Canada, at the recent Executive Forum.

In his presentation, Going Digital: Cultural Disruption, Isotta-Riches described the characteristics of firms that he described as “born digital.”

Such companies “are customer experience-centric, they are driving the consumer expectation across all sorts of industries, whether they are operating in insurance or not,” he said. “They are highly agile, they are responsive to change and their technology organizations are leading and evolving. These are organizations where their (chief executive officer) is a software engineer in most cases.”

Executive Forum was held August 30 at the Sheraton Centre in Toronto.

Isotta-Riches told attendees that six of the 12 richest people in the world are “geeks.” Those six are Microsoft Corporation founder Bill Gates; Amazon founder Jeff Bezos; Oracle Corporation founder and executive chairman Larry Ellison; Facebook founder and CEO Mark Zuckerberg; and Google founders Larry Page and Sergey Brin.

“Geeks have suddenly reached a point where they have massive relevance,” Isotta-Riches said. “Being able to produce innovative products is driven by diversity of people, cultures and ideas.”

PERSUASIVE SELLING

Companies selling insurance online to consumers could take a few lessons from Aristotle, a speaker suggested at Executive Forum.

“To get anyone to do anything, we have to capture their attention,” said Brian Cugleman, senior scientist and director at Alterspark. “You have to arrest attention and then you have to get to someone’s mind so that they have a cognitive understanding, and when you sell insurance, it can be a bit tough sometimes to get people to understand abstract things and a good number of us are very concrete in our thinking, and others are very abstract.”

Cugleman made his comments during an Executive Forum presentation, Digital Psychology Evoking Emotion to Sell Insurance.

Cugleman’s co-presenter was Andrew Lo, chief operating officer at Kanetix Ltd. Lo said Kanetix conducted a research project to identify best practices in auto insurance customer acquisition.

“We looked at the content of multiple sites in terms of their auto insurance conversions” he pointed out. “We looked for persuasive design features.”

During his presentation, Lo cited as examples the belairdirect and Progressive auto insurance websites, explaining the psychological impact of their mascots. “The psychology of a speaker who is credible and can persuade someone is similar to a brand that is credible and can persuade someone, which is also similar to a technology or a website that can persuade someone,” Cugleman said.

“If we have people who don’t care about something, your deal is off the table,” he said. “It’s not an option. Decision support is extremely important, so we can have people who are motivated, but along comes analysis paralysis and they can’t make up their mind.”

Aristotle discussed methods of persuading people, Cugleman told attendees, suggesting that Aristotle’s methods “are just as relevant” now “and have been studied in depth.”