Can the Reinsurance sector use digitisation to improve customer experience?

“If you were to go in for heart surgery, buy a new car or say your wedding vows to someone knowing that there was an 84% chance of failure... would you even bother?”

In 2016, Forbes concluded that, regardless of the quality of your technology, your digitisation endeavours had an 84% chance of failing. Fast forward, and the impact of this failure is still lingering - stats by Accenture in 2020 tell us that despite accelerated uptake of digitisation, caused by the Covid-19 pandemic, 30% of companies still lag behind due to remaining apprehensive of the impact on business operations and clients. Thus, it comes as no surprise that many re/insurance companies approach digitisation with caution, leading to a mismatch between the need and reality of an enhanced customer experience (CX).

The difficulty, of course, is that a significant disconnect continues to divide digitisation and CX, complicating operational efficiency and growth. Why is this, we might ask?

One factor that plays into this is a lack of collaborative planning and proper implementation when it comes to digitising CX processes, with many organisations instead opting for a fast and furious-esque roll-out of software and ideas. In turn, this leaves a lot to be desired when it comes to overall cohesion and definitely doesn’t place the client in the centre.

It’s all about communication

So let’s take a step back. According to Walk me, the rise of the internet in the 90s not only produced new opportunities for revenue growth for insurance businesses but also increased customer loyalty and retention. Effectively, the internet helped automate the selling process and the result was that customers had easier access, greater choice and the ability to make informed buying decisions. For the first time, they could exercise some control in the entire process. Incidentally, whilst the immediacy was appealing to customers, leading them to feel more satisfied, at the same time the internet, of course, heralded the start of the more standardised customer experience, and some of the human element became lost.

So what have we learned? In modern terms, the rise of AI, as evidenced by CCR Re, has more recently had a similar impact in the sense that it can automate repetitive and time-consuming tasks, leaving underwriters with more time to tackle challenging tasks like working with cedents to achieve the level of coverage they need for more complex risks. Just like the insurers who delegated some of their day-to-day tasks to the internet, this allows the modern reinsurer to partake in conversations that wouldn’t otherwise have been possible, but only if they choose to have those conversations, of course.

Ultimately, it goes to show that the real value lies in not only investing in technology but also analysing how and where it’s being used in practice to strategically improve the customer/client experience. The aim, as ever, should be to place the client first and support the people and processes within your reinsurance business to deliver an exemplary experience.

The importance of data in CX

In addition to the clear collaborative benefits good automation software can bring to the reinsurance sector, customer experience may also be enhanced by data analytics and insights. If we look at just some of the benefits to re/insurers of data analytics (such as unlocking the ability to make data-driven decisions and gain competitive advantage, according to Tableau) the importance of enhancing our use of data to improve client relations becomes abundantly clear.

But, our use of data in reinsurance has been fairly limited so far, keeping valuable information in legacy systems that aren’t centralised and failing to take advantage of the potential to improve business operations and communications with and between our clients. According to Sapiens, by updating and integrating the systems we use and working closely with employees to enhance processes, we are allowing clients to utilise their reinsurance data and transform the way they manage and buy reinsurance.

That’s not to suggest we should underestimate the importance of a reinsurance contract that has captured the necessary detail, not to mention being kept in a centralised system. If conditions are not captured, or are captured incorrectly, automation is more likely to fail. Hence, we see that communication and knowledge, accurately passed between employees and clients, is crucial if we want to see the digitised systems we implement succeed.

That leaves us with the question of whether there is hope of a future for reinsurance where digitisation properly aids CX. For me, there is only one answer - yes!

Nevertheless, digitisation does not by any means provide solutions on its own. Considering my motto ‘Hands-Heads-Hearts’, I firmly believe that one can often do and achieve so much more than expected when people, process and technology come together.

If you have any questions about the topic of Reinsurance and implementing digitisation to better your business’s CX, feel free to contact me!