Increasing Digital User Engagement in the Insurance Industry
Like other industries, insurance must respond to rising customer expectations for digital interactions. In this post, Tony Jacob, Amazon Web Services’ Worldwide Insurance Business Development Manager, explains how insurers can deepen their relationships with customers by engaging them digitally. Interestingly, he finds that the challenges have less to do with the digital interactions themselves, and more to do with the way the insurers manage their data.
Guest post by Tony Jacob, Worldwide Insurance Business Development Manager, AWS
After years of facing significant headwinds, the insurance market has been improving. As business returns to normal, insurers will once again turn to one of their most pressing day-to-day challenges: meeting customers’ growing expectations for highly personalized services. In order to exceed these expectations, insurers should focus more on digital user engagement.
Digital user engagement refers to the practices that businesses employ to provide better digital experiences to their customers. Those better digital experiences lead to more frequent digital interactions. By generating more frequent interactions, insurers can learn from those interactions to better understand their customers, better anticipate their needs, and support growth initiatives. The insights gained by these interactions allow companies to provide anticipatory and contextual offers and advice to customers.
There are two main challenges insurers face when it comes to providing stronger and more personalized digital experiences for their customers. Interestingly, neither of the challenges are about digital channels.
The first challenge is access to legacy data. Insurance is built on data, and good insurance service levels, underwriting discipline, product offerings, and digital customer experiences are built on the mastery of data. Companies have decades of data on their policyholders, but often that data is locked up on legacy systems. In order to really understand their customers, insurers need to unlock their legacy data, mine that data with new machine learning services, and uncover opportunities to better service those customers.
The second challenge is that many insurers do not have enough signals on their customers. As one insurer put it to me, “We collect data when a customer requests a quote, pays their premium, and files a claim. These three signals are not enough to fully understand what is happening in the lives or businesses of our customers.” Insurers want digital channels that will prompt more digital interactions with their customers. Through those more frequent interactions, insurers can collect data and identify signals that will support better digital experiences. That requires linking their data strategies to their channels and being able to enrich their legacy data with external or unstructured data sources.
AWS provides several services that can help. By combining a call center, mobile application, chatbot, website, and even an Alexa skill, then adding data analytics and machine learning capabilities, insurers can provide better service to their customers and gain important insights into their customers’ needs.
Picture this: When a policyholder calls into the cloud-based contact center, conversations are automatically transcribed into text and captured in a data lake. AWS artificial intelligence and machine learning services, such as sentiment analysis or text extraction, analyze the call records. Based on sentiment or specific words used during the call, workflow is kicked off to suggest the best next action in real time. Finally, information from the call center interactions is merged into existing customer data files, enriching the data files with ongoing customer insights.
In this example, an insurer will know what’s happening in the policyholder’s life or business, and with that knowledge can offer better coverage or the most appropriate new product when it’s needed. The customer intimacy, and the velocity of the action, makes the policyholder feel that their insurers know them and anticipate their needs.
Life insurance companies in particular are looking to improve the experience on their customer-facing websites. While the vast majority of life insurance products are still sold through an agent, broker, or advisor, today’s customers want to conduct research through effective websites long before they call an agent. With digital user engagement, life insurers place recommendation or personalization engines behind their websites to aggregate and mine data on website visitors and use the signals they uncover to recommend the appropriate product or suggest the best customer journey. That recommendation is delivered through a proactive chatbot window, a next-best action prompt to a call center representative, or an automated customer communication.
While this might not lead to a direct sales of a life insurance product, it will help improve conversion rates from the website, with more visitors feeling compelled to book an appointment with their agents or advisors based on the quality of their recommendations. Use of the recommendation engine behind the direct website can also help boost net promoter scores and lower the cost of customer acquisition.
We’ve seen customers put digital user engagement into action in creative ways and at scale. For example, Liberty Mutual uses Amazon Lex and Amazon Polly for a chatbot that helps its employees quickly address frequently asked questions from customers and provide better service. HDFC Standard Life Insurance runs a life insurance recommendation engine behind its website, supporting an enormous volume of visitors. The recommendation engine suggests the appropriate product or customer journey and, through integration with the customer communications management system, sends the website visitor an email or SMS text with a link to where they can pick up their search where they left off.
Many insurers want to rebrand themselves from being a provider of insurance to being a provider of protection, where the value of insurance lies in the appropriateness and quality of the coverage, backed by the quality of the service. That requires customer intimacy that can’t be derived from the customer data file alone, even if that customer data file is accessible. Focusing on digital user engagement creates more effective and more frequent digital interactions. Those more frequent interactions, in turn, can be mined for a wealth of insights that can be used to enrich the understanding of the customer and improve digital customer experiences. When done right, digital user engagement helps attract the policyholders who value customer intimacy and helps provide them with agile, responsive offers, services, and advice. What might an approach like that mean for an insurer looking to improve customer retention, claims experiences, underwriting performance, or premium growth? I believe we’re going to find that out from quite a few insurers in the days to come.