Insurance is slow. We’re all too familiar with this phrase. It’s rooted in an industry that is often seen as a customer experience laggard. Are we too rooted in old ways to adjust?  Have we become too complacent to innovate?

 

Until recently, insurance surely could have felt that way. Then COVID-19 arrived, and lockdowns hit.

Almost overnight, insurers leaped ahead, deploying digital tools and self-service options in every aspect of their business. For some, these were efforts we had already started, and for others, we started them in earnest to ensure we could still do business and support our insureds when they needed us.

We deployed tools that allow insureds to capture video and images of their property (pre- or post-loss) to analyze with computer vision and AI to make conclusions about the situation quickly and accurately. There are new ways to use third-party data and advanced models to change underwriting decision-making that had traditionally required in-person work such as inspection or medical evaluations, and to compress cycle times dramatically.

As an industry, we changed many aspects of the customer experience (CX). We accelerated processes and removed many friction points.

 

Is it all for nothing?

Despite this progress, many in the industry still feel behind. After all the effort put in since 2020, the bar for optimal CX remains an elusive target. Yet, other industries we are compared with seem to be closer to reaching the CX ideal. Tech darlings such as Amazon, Apple and Tesla are the perennial favorites to set a CX benchmark that we never seem to be able to catch up with, let alone surpass. So, it’s a fair question to ask: Have we made progress in creating better CXs at all?

Of course we have. Remember that CX isn’t a destination but a journey. Keep removing the dust from old ways of doing business and continue the push forward. As long as there is progress, we should be proud of yesterday’s achievements and look forward to tomorrow’s innovations. The insurance industry may not be perceived as an innovation leader today, but we’re not the last-place finisher that we’re often seen as either. There has been tremendous progress that we’ve built on top of rather than stepped back from — and it’s an opportunity to change how we’re being perceived.

 

A different perspective

While it is necessary to chase CX leaders and eventually join them, insurers must also remember how far ahead of others we are.

I recently wanted to refinance my home through my current lender, a top-three bank, only to learn how much more advanced insurers are today and how innovation-resistant other industries may be.

While my bank had instituted many innovative solutions to keep their mortgage business going during lockdowns, such as having homeowners submit video or photos for inspections, using e-notaries, and more, they went back to their old operating models as soon as things started opening up again. This raises the question, why would you revert to sending a notary to witness document signing when a cheaper, faster, easier solution exists that you already implemented? Why would you incur the cost and customer inconvenience of in-person appraisals when you’ve already implemented better options, like the ones we use to remotely adjust property claims (a much harder, detail-oriented process than home appraisal)?

I was asked to provide copies of my mortgage and bank account details, both of which were already with that bank. Still, they insisted that I needed to provide them again and even asked me to upload both into more than one part of their application. The fact that they rejected one of their own documents for not having sufficient information in it for that type of document was the icing on the cake. Imagine if an insurer asked a client to upload their auto policy after an accident — a document they obviously have – and then told them they don’t think their current auto insurer did a good enough job with the declarations page.

After a series of additional, painful interactions, the final straw came when they requested my 2021 tax return before the year was even over. I said I obviously didn’t have it yet, but they insisted I provide it anyway.
I told them to close my application.

 

What does this mean for insurance?

Don’t get me wrong; I am not pointing fingers. The mortgage space has many innovators and start-ups providing challenge and pressure on incumbents to change. It has also seen massive investment in systems, people, and processes. The way the industry works was dramatically impacted by the pandemic. Just like insurance.
And yet, while lenders clearly changed for the better, some major players rushed to undo those changes as soon as they could.

Insurers didn’t.

This is a nice reminder that insurance is not the slowest, hardest-to-work-with industry. It hasn’t lost the CX race. It is not out of the hunt.

Insurers have made tremendous progress and are choosing to continue to build upon the progress made rather than returning to old ways of working just because the pandemic-imposed constraints we had to innovate through may have relaxed.

Think about the new approaches we implemented. There are CX tools, such as text messaging for customers who don’t want to play phone tag or sit on hold, digital payment solutions for premium collection and claims payments, and much more robust self-service offerings in policy administration (like self-generated certificates) and claims (like remote adjusting tools and proactive status updates). Insurance companies have made great strides while creating the framework to do more, through the adoption of cloud-based, API-centric approaches to the tools we use.

Equally important, insurers don’t back down from a fight to make things better. That’s the essence of our entire industry — when things get tough for people, we stand up and help put their lives back together. When the situation is especially grave or difficult, we persevere. That’s why cities get rebuilt after natural disasters, people have homes to sleep in after a fire and businesses can continue to operate and grow even after being hit by a cyberattack.

So, are we too rooted in old ways to adjust? Have we become too complacent to innovate?

This does not have to translate to a lack of ability or speed. Perceived complacency isn’t equal to lack of innovation. Rather, we display pride, determination, and grit when it counts. We have the experience and capability to let innovation shine.

This is an important moment for the insurance industry to continue the work we’ve been doing to enhance CX, empower our people with better tools and keep closing the gap between us and the digital leaders in industries like tech and retail while we leave others behind us.
The question is, how are you going to build on the progress we’ve made and stay ahead rather than waiting for the next pandemic-like event to force us to move forward?

Bryan Falchuk is Founder & Managing Partner of Insurance Evolution Partners. Connect with him on LinkedIn or follow him on Twitter @bryanfalchuk.